You may not use inventory levels to fill orders if... Evidence from a survey of UK manufacturing plants

The fiercely competitive and dynamic market environment of today calls for innovative strategies by manufacturing organisations in order to survive. Traditionally, most manufacturing organisations have used mechanisms such as inventories, quoted lead-times, and volume flexibility to cope with the effects of uncertainties and fluctuations in customer demand levels. This paper focuses on and compares the use of inventory levels and volume flexibility strategies to fill orders. The empirical evidence of the paper is mainly obtained from a combination of survey and case studies of UK manufacturing plants. This paper suggests that while the two strategies appear to represent alternative ways of coping with fluctuations in demand levels, there are significant differences in the operating contexts in which they can be applied. The paper also reveals that in some cases, their use may actually be complementary.