You are on page 1of 9

The 1st International Conference on Information Technology and Business ICITB2020

Data-Driven Inventory Management Solution for Procurement and


Supply Chain of Utility Company

Abdul Malek Abdul Rahmana, NurAzaliah Abu Bakar b*, Nor Zairah Ab Rahimc, Hasimi
Sallehudind
a,b,c
Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia
d
Universiti Kebangsaan Malaysia, Bangi Selangor, Malaysia

Abstract:
An efficient inventory management solution in procurement and supply chain management (SCM) plays a vital role in ensuring the nominal working
capital and increasing profitability in a large company like National Utility Company (NUC). However, in Malaysian NUC, the SCM process in utility
goods warehouse is still done manually. This caused various materials administration and storage issues such as mismatch demand between supplier and
customers, inefficient resource utilization and project delay. Therefore, this paper aims to review studies in data-driven solution, inventory management
solution and proposes a new data-driven inventory management model based on the business intelligence framework. This study starts with a literature
review analysis of supply chain and inventory management concept with current practice in the big data business solution era. This is followed by the
development of data-driven inventory management model for procurement and supply chain. As a result, this new model corroborates five major insights
for best practice including inventory visibility management, the healthy outlook in material scheduling, inventory classification and segmentation, demand
forecasting and service level planning. This paper concludes that the manual warehouse management can be digitally transformed into data-driven inventory
management by leveraging on the BI platform which able to provide more business insights to a large company similar to the utility company.

Keywords:
inventory management model, data-driven, business intelligence, utility company

store, aggregate and analyze data before transforming them into meaningful
business insight. Hence, no doubt that big data and its analytics can be a
1. Introduction
game-changer in the Supply Chain Management (SCM) transformation.
Supply Chain Management (SCM) is among the business principles
Big data are defined as a method of collecting, managing and analyzing a
that have been extensively applying a large variety of technologies, such as
large amount of data [1]. Majority of the structured and unstructured data
RFID, sensors, barcodes and IoT to integrate and coordinate every linkage
captured today is created from the past years’ compilation and collection
of the chain [2, 7]. SCM solution is widely used in managing inventory and
activities. Meanwhile, big data analytics provide the ability to capture,
warehouse to ensure this long and complex value chain are working in lean
store, and analyze a huge amount of data from multiple sources such as
and optimize manners. Nevertheless, the latest embedded technology in
corporate database, sensor-captured data like RFID, mobile-phone records
SCM enables the company to outshine in the current fast-paced and
and social media to understand the insights [2]. Big data analytics method
continuously changing the market environment. This includes by
includes the application of advanced analytics techniques to extract
leveraging on the powerhouse of big data analytics functionality to improve
valuable knowledge from vast amounts of data, facilitating data-driven
the efficiency of SCM process to enable the company to produce high-
decision-making [3, 4]. For example, Amazon leverage big data to monitor,
quality outputs and increase the value-added content of their products and
record and reserve 1.5 billion items of their inventory that are stored in
services [8]. These recent trends have urged any large company to upgrade
almost 200 fulfilment centres all around the world. Amazon also deploys
their traditional automated SCM to ‘smart SCM solution’ [4, 9]
the predictive analytics to forecast the customer purchasing period of a
Despite the recent process improvement in SCM and advanced
particular product thus ready to pre-ship it to a closer depot with
technology in big data analytics, the integration of these two domains does
anticipation of the customer to purchase it within a certain period.
not always behave as expected in giving out the desired outcomes. As
However, many industry players are struggling to cope with the effort
stated by Kache and Seuring [10], one of the common reasons is due to
to handle the velocity, variety and volume of data especially on how to
excessive demand inconsistency resulting from information distortion or
capture, record, stored, process and transform the data into valuable insights
big noise impairing judgement and business decision. Another pitfall is
to help better business decisions amidst today's competitive landscape,
failing to understand the SCM process complexity, probability and
which is full of volatility, uncertainty, complexity and ambiguity [5, 6]. A
uncertainty that might happen in on the full chain of the process [11]. A
critical success factor for the enterprise will depend on the ability to capture,
recent study by Nowicka [12] proved that ‘smart SCM solution’ has their

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 1

Electronic copy available at: https://ssrn.com/abstract=3582428


The 1st International Conference on Information Technology and Business ICITB2020

limitation as needs to be analyzed as a smart supply chain that works in projected scenarios with different possibilities for management decision
unison based on the digital technology ecosystem driven by customer [16, 17]. A review by Knut, et al. [18] highlight there are many supply
demand. chain analytics opportunities available as shown in Fig. 1.
Also, the cost of deploying a full package of supply chain solution
offered by various solution providers to support a smart SCM solution is
still high for most company. Estimating the return on investment is difficult
because this solution provides more business-related insights rather than
direct links to sales or cost savings. A similar situation is faced by the most
warehouse in Malaysia in materials handling and inventory management,
which has caused a hike in cost as well as high inventory level [13].
Therefore, this paper aims to investigate the current smart SCM solution,
propose a new inventory management model for procurement and supply
chain (P&SC) based on the data-driven concept. This study focuses on
Malaysian National Utility Company (NUC) as a case study as it is the
largest electricity utility warehouse in Malaysia with various type of goods
to manage all over the country. Therefore, the concept of data-driven smart
SCM is very crucial to this selected case study to be realized. Fig.1 Supply Chain Analytics Opportunity [18]

These findings are also in line with the study undertaken by Govindan, et
2. Literature Review
al. [4], which can be concluded that Supply Chain Analytics comprised of
three different strategic function levels namely:
2.1. Digital Transformation in the Energy Sector
1). Descriptive Supply Chain Analytics– explaining current business
scenarios based on historical data. This function includes basic query,
Energy and utility sector especially the NUC is undergoing a major
reporting and visualization of information.
transformation in their digital revolution. Data acquisition and exchange
2). Predictive Supply Chain Analytics– referring to the mining process of
are growing tremendously and offers valuable opportunities to the players
past data to indicate specific patterns of future situations and outcomes.
that are willing to invest in technology. The competition for customers is
3). Prescriptive Supply Chain Analytics–using the results obtained in
shifting to the online channel due to various options of platform available
Predictive Analytics process to recommend actions that capture the best
ranging from IoT power generation up to customer relationship analytics
available options of the predicted scenario.
[14]. For example, the Malaysian NUC itself has launched mobile
Based on the discussion, some of the large company already using the
applications for bill notification, presentment, and payment, as well as for
big data analytics solution to improve the performance of their supply
outage management
chains. However, the lack of capabilities and structured approach to supply
Digital distributed energy sectors either individual sites or entire
chain big data is holding many companies to proceed. For big data and
distribution systems, has just started with lots of promise. Digital
advanced analytical tools to deliver greater benefits for SCM, it needs a
transformation journey taken by the energy and utilities show promising
more systematic approach to their adoption. Next section we will review
outlook with good prospects to improve operations and increase flexibility
on related inventory and warehouse management studies to design a clear
throughout the value chain. Studies show that the digital energy
SCM process for NUC with the integration of big data analytics.
optimization can boost profitability level by 20 to 30 per cent if NUC can
grasp most of these three solutions namely smart meters and the smart grid,
2.3. Review on Recent Trends of Inventory and Warehouse
employees digital productivity and automation of back-office [15].
Management Studies
2.2. Big Data Analytics in Supply Chain Management and
Inventory Control Structure 2.3.1. Data-Driven Supply Chain Model Builder for Extended Enterprise
In a typical traditional approach of model building, the user will
Big data application empowers many corporations to reorganize data and define all steps involved in the process using existing user interface module
obtain deeper insights into their daily activities to improve operational of the simulation model. When the configuration of the model needs to be
efficiency, increase revenue while securing competitive advantages. changed it only can be performed by a simulation builder, which results in
Progressively, more firms that involve with supply chain management are a limitation of the developed simulation model to be modified by a non-
using big data analytics to make well-informed business decisions as it expert user. For a resolution, the idea of data-driven demonstration or
gives more avenues for superior business understanding, anticipate hidden simulation building is adopted [19]. In a data-driven model simulation, it
prospects and even suggest actions that best suit the company based on can be developed by a software program and using the existing company
data. Hence, a user could determine the repercussions of radical changes to

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 2

Electronic copy available at: https://ssrn.com/abstract=3582428


The 1st International Conference on Information Technology and Business ICITB2020

a created model, despite having little information and know-how of the company’s production and logistic channel. Hence, these studies suggest
simulation software selected. that SOP is vital for monitoring company process, as it will assist
A data-driven supply chain simulation principally can be described management to manage risks and attain the company strategic objectives.
as a bill of materials (BOM) database where the supplier information is The focus company has five sets of working SOPs including 1)
being cross-examined. Then, a simulation model is developed, run and the receive finished goods from supplier, 2) deliver finished goods to the
results will be exported and analyzed. Fig 2 shows the concept of data- customer or the third-party warehouse, 3) deliver finished goods to the
driven modelling and simulation architecture for supply chain modelling customer or outbound, 4) receive finished goods or inbound and finally 5)
proposed by Cao, et al. [20]. receive finished goods or imported as the inventory control system.
However, these SOPs used likely focuses only on the supply and delivery
of finished goods meanwhile and the standards applied are too general and
absence of specialization [22].
Along the same line, the company is required to improve their
awareness of inventory management fraud. Each company must create full
awareness and coach among the employees on fraud, along with applying
a good ethical culture to avoid any fraud incidents within the company such
as inventory theft, suspicious inventory adjustment without any supporting
documents and approval plus the conspiracy with other parties and others
[22]. At the same time, SOP on stock count can be established, so that this
practice can be executed without any form of errors and producing
consistent results.
Meanwhile, Sari, et al. [21] recommend that the customization
through warehouse management system is required along with the change
Fig. 2 Supply Chain Data-Driven Model Builder [20]
of business processes that related to system requirements. By doing this it
will eradicate the manual process thus can provide consistent information
The Supply Chain Management Model Builder generate the data
about the location of inventory stored and retrieved, create a trackable
model of the designated supply chain by choosing the subset of data,
inventory and provide real-time information related to inventory in the
importing the data, key-in and finally validate it. This means that the supply
warehouse. The suggested warehouse management will be integrated with
chain data model is originally generated by the users itself. Therefore, the
robot machine and the application will store into one single application
data-driven simulation can be a useful tool for miscellaneous supply chain
server as shown in Fig 3.
tasks but still have a similar process.

2.3.2. Inventory and Warehouse Management System based on COSO


Framework
The COSO Framework highlighted in this study refers to the special
body called Committee of Sponsoring Organisations of the Tread Way
Commission “Internal Control-Integrated Framework,” which is newly
revised in 2013 after it first released in 1992. The COSO framework
consists of five integrated components of internal control including 1)
control environment, 2) risk assessment, 3) control activities, 4)
information and communication, and 5) monitoring activities. This aim of
the framework is to guide the management in planning, executing and
evaluating the effectiveness of its internal control in the organisation. It
gives full support in establishing a comprehensive and robust internal
Fig. 3 Warehouse Management System based on COSO Framework
control to ensure the organisation is subjected to errors-prone and not being
[21]
exposed to fraud and malpractices incidents [21].
In the studies conducted by Karim, et al. [22] and Sari, et al. [21],
This warehouse management aims to optimize the server for storage,
COSO framework is used to observe the standard operating procedure
data process and retrieving database. Plus, it has an additional interface
(SOP) of inventory management practices and identifying the weakness and
process integration as connecting between warehouse management systems
evaluate the impact on the performance of the company. In general,
and robot machine systems which all data from the systems will save into
inventories could be in raw materials, packaging materials, work in process
a single database.
and finished goods that exist in numerous checkpoints throughout the

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 3

Electronic copy available at: https://ssrn.com/abstract=3582428


The 1st International Conference on Information Technology and Business ICITB2020

2.3.3. SAM Model for Data-Driven Supply Chain


Big data analytics has the potential to transform the company Supply
Chain Management. Based on the study conducted by Sanders [8], it was
found that successful companies with these traits have three common
features. First, employees at all levels are driven to support the company’s
strategy rather than casual and random efforts of just reflection. Next, these
company practice analytics and data-driven applications along with all
supply chain components in a coordinated manner instead of optimizing the
application on special occasion and instance. Lastly, these companies
measure performance through carefully selected metrics and tools while
working towards continuous improvement. The selected frameworks that
they normally adopt and apply is called SAM or Segment, Align and
Measure Framework.
1) A segment is a primary stage in the framework where company use
analytic functions to create optimal supply chain sectors with clear Fig. 4 SAM Framework for Implementation [8]
elements. The company work smart to compete in each segment and helps
establish the required focus. Firms have been segmenting their customers The developed framework is prescriptive. It provides the
since ages by functions like attributes, demographics, purchase patterns, necessary elements that the company should follow in execution. Big data
shopping attitudes including any specific determining activities. These analytics are just tools used in achieving a competitive advantage enabling
fragments have different products and customers service requirements better performance. The framework should be routinely refined and
while they are being served via the different platform and as well as supply realigned to support the decision at each step
chain sections. Each segment is focusing on a different agenda. The main
objective, in general, is to establish a segment that can elevate customer
2.3.4. Supply Chain Integration and Management using Cloud Services
needs and supply chain requirements in serving all segment.
Yan, et al. [23] in their study introduced an intelligent supply chain
2) Align is the next stage of the framework required to bring into line
integration and management system based on the Cloud of Things (CoT)
organisational functions so that their process support each segment
concept to assist the current demand of supply chain and to resolve the real-
characteristics and competing priorities. This can be achieved by
time information performance issue. What the CoT accomplish is
integrating all the relevant processes across the supply chain spectrum. As
monitoring the implementation of the complete supply chain integration
a result, each supply chain function applies its analytics measures to support
and management within the corporation, in particular for the management
the stated competitive priority rather than engaging in random experimental
platform. The platform is established to manage the whole supply chain
efforts. Alignment process integrates the company and its supply chain
using the information collected by the process condition perception
.through the sharing of intelligence across the boards involving different
modules. The functional modules of the introduced platform are divided
supply chain partners.
into four parts, which are supplier management, warehouse management,
3) Measure stage is the final step in the SAM framework where the
logistics management, and client management. Fig 5 depicts the proposed
company assesses its performance. It is suggested that the company should
CoT system for supply chain integration and management.
design their strategic key performance indicators (KPI) to quantify the
From this study, it can be concluded that the complexity of supply
segment attributes. Therefore, the analytics initiatives play a vital role in
chain integration and management in term of information sharing,
measuring the targeted KPIs periodically. These KPIs shall be the right
collaboration and operation agility heavily dependent on the distributed
metrics for the exceptional achievements that the companies need to
location of warehouses and assorted resources that resides in each link of
heighten and it can be obtained using strategically aligned KPIs agreed
supply chains. Therefore, having a CoT-based intelligent integrated supply
upon by all stakeholders. The chosen analytics metrics should also be able
chain integration and management system will be a great advantage to
to measure the alignment, integration and cross-enterprise collaboration.
tackle this challenge in the aspects of real-time performance, robustness and
Continuous process improvement should exist between metrics for KPIs
system security.
monitoring purposes with specific competitiveness and priorities like a
closed-loop system. Fig 4 illustrates the components of the framework.

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 4

Electronic copy available at: https://ssrn.com/abstract=3582428


The 1st International Conference on Information Technology and Business ICITB2020

existing IT resources and realign their supply chain process to produce


meaningful data thus forming value for their businesses.
From recent studies, we can postulate that firms able to gain
superiority in their operational performance by emphasizing the data-driven
supply chain solution. This new model can streamline the processes in any
direction from upstream to downstream, resulting in an excellent
performance. Ultimately, the main challenge for the company is not on
how to obtain the data, but most importantly on how they could integrate
data into daily operations and activities whereby data have become a vital
resource in supply chains environment.

3. Methodology

This study adopted the Design Science Research Methodology (DSRM) by


Peffers, et al. [26] in developing the new data-driven inventory
Fig. 5 CoT system for supply chain integration and management [23] management model for P&SC of NUC. There are four possible research
entry points suggested by DSRM which are, 1) Problem-centered initiation,
2) Objective-centered solution, 3) Design and development-centred
2.3.5. Flexible IT Resources Method for Data-Driven Supply Chain initiation, 4) Client/context initiated. For this study, we opted for design
Integration and development-centred initiation since the nature of the problem
A study by Irfan and Wang [24] analyzes the impacts of data-driven discussed in this study is to resolve the inventory management issues by
competencies on the firms’ supply chain capability and their comparative designing a new data-driven model to the real case of inventory
advantage in the food and beverages industry in Pakistan. The study found management system in NUC. This study follows six steps defined in
that firms could realize excellent performance by spearheading the data- DSRM as shown in Appendix A.
driven supply chain operations. Cloud-based data sharing, on the other Firstly step is to identify the problem and motive, which is in this case,
hand, can increase the operational performance value of the supply chain is complexity, and a mixture of the automated and manual process in the
members while reducing their overall expenditure. In real operation, food inventory management process in P&SC division of NUC. Secondly is
outlets mostly obtain the benefit of shared resources from the suppliers in define objectives of a solution, whereby we shall injecting the big data
managing orders, payments, inventory and customer services. Fig 6 shows analytics approach in the existing inventory management process defined
the conventional supply chain management IT architecture that becomes to create a data-driven system. The second step includes performing the
the basis for the study. content analysis of the related research as discussed in Section 2. Also, data
were collected from the SCM and inventory management process of the
case study.
This is followed by the third step, which is to design and develop,
which is currently being discussed in this paper. The fourth step is the
demonstration, which means the proposed solution needs to be deployed in
a suitable context as in this case in the P&SC division of NUC. The fifth
step is evaluation, with the purpose to observe how effective and efficient
is the proposed solution, and final step is communication, whereby the
complete solution shall be presented as the scholarly publication as well as
to the industry which is in this context is the NUC. The fourth, fifth and
sixth steps will be the future works of the study.
Fig. 6 Traditional IT architecture for supply chain [24]
3.1. Background of the case
Another similar study by Yu, et al. [25] reveals that to take advantage
of big data trends, any firm should have agile IT resources to incorporate The case study selected in this paper is the Procurement and Supply Chain
their relationships with both internal and external parties in the supply chain (P&SC) division of NUC. This division is responsible for all procurement
ecosystem. These are referring to the mobile and agile IT-related related affairs including sourcing and purchasing activities of all other than
infrastructure or resources that a corporation obtains, adopts and shares to fuel materials used by NUC and its subsidiaries. Inventory management
increase its operational capabilities. Alternatively, firms can also exploit and storage facilities are part of SCM components managed by P&SC.

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 5

Electronic copy available at: https://ssrn.com/abstract=3582428


The 1st International Conference on Information Technology and Business ICITB2020

There is a total of 43 warehouses (Transmission & Distribution) and storage integration within the system can be extended to include external parties
facilities all around Peninsular Malaysia at various strategic locations such as suppliers (both local and international), contractors and service
managed by P&SC for NUC. The warehousing operations are generally providers. Any changes on requirements or specification from any parties
aided by the warehouse management system (WMS). will be communicated and transpired within this ecosystem to maintain
visibility and to avoid any miscommunication while maintaining speed and
4. Results and Discussions accuracy of decision-making.
Among the proposed functions in this new data-driven inventory
4.1. The Existing NUC P&SC Inventory Management Process management model are the data mining, data models and visualizations
tools aim to support the intelligent business decision-making for NUC. The
The NUC P&SC Inventory Management process starts with the purchase inventory management system designed for P&SC and ultimately for the
request, purchase order and finally well-received to be stored in the National Utility Company need to be capable to create an efficient working
warehouse. The requirement of all materials used for the projects and environment with better control and recording of the updated information.
engineering works, such as loose equipment, tools, spare parts, logistics, There are 5 components of PDC which are 1) Inventory Visibility
uniforms and supplies are requested by each division by both online and Management, 2) Visibility in Material Scheduling, 3) Inventory
manual application. The requested need to submit the purchase request Classification and Segmentation, 4) Demand Forecasting and 5) Service
form with the details specifications of the materials and proceed with Level Planning. Fig 7 provides an overview of the proposed model.
purchase order form issued by P&SC. P&SC Procurement Policy (PPP) is
the main reference and guideline used to perform the sourcing activities. IT Proviso Link Suppliers / Contractors of Supply Cain
Finally, all those items and materials secured and purchased will be Circle

Integration

Supplier /
Layer for
transferred and stored at all warehouses and storage facilities owned by
NUC Data Flow

4.2. Proposed New Data-Driven Inventory Management Model for


NUC P&SC
Application Layer / Digital

IT for process IT for advanced


The proposed concept of a data-driven inventory management model Improvement / Tender information
Transformation

and Contracts capabilities and


for P&SC of NUC will give special attention on the five elements identified management support
earlier in Section 2 as the model core components based on the impact that
each activity will contribute to the entire supply chain. The ultimate goal Data Flow CORE COMPONENTS
of the model is to have a better-controlled system via enhanced visibility
across the value chain of NUC while providing resolution to the ongoing Inventory visibility
issues including but not limited to extremely high inventory level, poor Management

coordination among all stakeholders on the exact requirement and Transmission


Division
acquisitions, slow-moving items, unnecessary purchase, attrition, missing
Visibility in material
or unrecorded items and change of specification at any instance. scheduling
This study identified three distinct layers of data handling and treatment
Data Layer (Centralize ERMS System)

along the process namely 1) The Data Layer, 2) The Application Layer or
Demand Forecasting
Digital Transformation and 3) The Integration Layer for supplier and Distribution Division
contractor support. All these layers form an integral open and flexible IT
ecosystem that thrives on the application of big data analytics approach Inventory
from a constructed data warehouse. Each business unit in the NUC classification and
segmentation
including Generation Division, Transmission Division and Distribution
Division will be communicating with P&SC division continuously on the
Generation Division
provided IT platform known as Procurement Digital Center (PDC). Service level planning
The application of the model and expectation is to remove any
ambiguity and uncertainty about the status of the materials consumed,
required and available within the system. With correct data on the figure
PDC
consumed and available stock of specific materials, the appropriate analytic
model or simulation can be applied in the application layer with targeted
digital transformation with big data application. The supply chain
Fig 7 Proposed Data-Driven Inventory Management Model for P&SC

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 6

Electronic copy available at: https://ssrn.com/abstract=3582428


The 1st International Conference on Information Technology and Business ICITB2020

4.2.1. Inventory Visibility Management of the final working model and how efficient the proposed model towards
Inventory visibility management concept refers to better visibility of operational excellence and problem-solving capacity.
inventory across the supply chain of NUC that can help decrease the overall For P&SC of National Utility Company, the proposed model serves its
inventory significantly. Each stakeholder should be able to refer and be purpose by playing pivotal roles to integrate the system and promoting
guided with a common system that can show a real-time figure of each common platform that is proficient enough to remove any duplication and
material at any time. allows free flow of data for complete business intelligence and analytic
functions. Aggressive global market competition is forcing the company
4.2.2. Material Scheduling Visibility for the integration of intelligence technology for the supply chain
Better visibility in material scheduling refers to the excellent visibility management. The case study selected in this paper is the Procurement and
of material scheduling that permits the managers to make informed Supply Chain (P&SC) division of NUC. This division is responsible for all
decisions and better manage the interaction between risk factors involved procurement related affairs including sourcing and purchasing activities of
and material inventory. The right communications should take place all other than fuel materials used.
between all relevant parties’ seamless operation.

4.2.3. Inventory Classification and Segmentation Acknowledgements


Inventory classification and segmentation promotes a more accurate
understanding of inventories by segments, applications and associated Highest appreciation to the P&SC Division on Malaysian NUC personnel
projects that allows for better planning so that managers can confidently that involve in this research. The authors also thanks following reviewers
trim the inventories accordingly. Any new purchase of similar items could to review this article. The research is financially supported by Universiti
only be justified once the similar items could not be located within the Teknologi Malaysia (UTM) Transdisciplinary Research (TDR) Grant
system. Q.K130000.3556.06G26.

4.2.4. Demand Forecasting REFERENCES


Demand forecasting refers to a process of proper selection of
forecasting models together with market intelligence instrument with
[1] K. Vassakis, E. Petrakis, and I. Kopanakis, "Big data analytics:
various demand patterns to improve the forecast accuracy as much as 25
applications, prospects and challenges," in Mobile Big Data:
per cent. Advanced forecasting model can be used to handle parts that have
Springer, 2018, pp. 3-20.
dynamic or intermittent demand patterns that play a key role in reducing
forecasting errors hence, affecting inventory level requirements. [2] S. Biswas and J. Sen, "A proposed architecture for big data driven
supply chain analytics," Journal of Supply Chain Management, vol.
XIII, no. 3, pp. 7 - 34, 2017.
4.2.5. Service Level Planning
Service level planning can be defined as customized replenishment and [3] S. S. Kamble and A. Gunasekaran, "Big data-driven supply chain
service level policies along with a periodic review of supplier lead-times performance measurement system: a review and framework for
that can improve service level and supply chain management in general. A implementation," International Journal of Production Research, vol.
company should aim for a holistic approach that can reduce total inventory- 58, no. 1, pp. 65-86, 2020.
relevant costs including carrying cost, stock-out and ordering costs while [4] K. Govindan, T. Cheng, N. Mishra, and N. Shukla, "Big data
setting service level. Instead of using single replenishment policies for all analytics and application for logistics and supply chain
products, firms should go for a hybrid approach to customize stocks management," Transportation Research Part E: Logistics and
replenishment policies. Transportation Review, vol. 114, no. June 2018, pp. 343-349, 2018.

[5] D. Arunachalam, N. Kumar, and J. P. Kawalek, "Understanding big


5. Conclusion and Future Work data analytics capabilities in supply chain management:
Unravelling the issues, challenges and implications for practice,"
Up to this stage, the proposed data-driven inventory management model for Transportation Research Part E: Logistics and Transportation
the P&SC of NUC is successfully designed based on reviews of existing Review, vol. 114, pp. 416-436, 2018.
studies in the supply chain, inventory management and big data analytics [6] B. T. Hazen, J. B. Skipper, C. A. Boone, and R. R. Hill, "Back in
domain. For the next stage, we shall conduct the evaluation session with business: Operations research in support of big data analytics for
the personnel of the P&SC Division and SCM experts to gain their feedback operations and supply chain management," Annals of Operations
on this proposed model. The input and feedback collected from these Research, vol. 270, no. 1-2, pp. 201-211, 2018.
subjects will determine the acceptance of the proposed model, the features
[7] Deloitte, "Tech Trends 2019: Beyond the digital frontier,"

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 7

Electronic copy available at: https://ssrn.com/abstract=3582428


The 1st International Conference on Information Technology and Business ICITB2020

Deloitte2019, Available: pp. 1-5: IEEE.


https://www2.deloitte.com/content/dam/Deloitte/br/Documents/tec
[22] N. A. Karim, A. Nawawi, and A. S. A. P. Salin, "Inventory
hnology/DI_TechTrends2019.pdf.
management effectiveness of a manufacturing company–Malaysian
[8] N. R. Sanders, "How to use big data to drive your supply chain," evidence," International Journal of Law and Management, 2018.
California Management Review, vol. 58, no. 3, pp. 26-48, 2016.
[23] J. Yan et al., "Intelligent supply chain integration and management
[9] G. J. Hahn, "Industry 4.0: a supply chain innovation perspective," based on cloud of things," International Journal of Distributed
International Journal of Production Research, vol. 58, no. 5, pp. Sensor Networks, vol. 10, no. 3, p. 624839, 2014.
1425-1441, 2020.
[24] M. Irfan and M. Wang, "Data-driven capabilities, supply chain
[10] F. Kache and S. Seuring, "Challenges and opportunities of digital integration and competitive performance," British Food Journal,
information at the intersection of Big Data Analytics and supply 2019.
chain management," International Journal of Operations &
[25] W. Yu, R. Chavez, M. A. Jacobs, and M. Feng, "Data-driven
Production Management, 2017.
supply chain capabilities and performance: A resource-based
[11] A. S. Chilton and G. A. Sarfaty, "The limitations of supply chain view," Transportation Research Part E: Logistics and
disclosure regimes," Stan. J. Int'l L., vol. 53, p. 1, 2017. Transportation Review, vol. 114, pp. 371-385, 2018.

[12] K. Nowicka, "Smart Industry—The Digital Gap in the Process of [26] K. Peffers, T. Tuunanen, M. Rothenberger, and S. Chatterjee, "A
the Smart Supply Chain Competitive Advantage?," in Sustainable Design Science Research Methodology for Information Systems
Logistics and Production in Industry 4.0: Springer, 2020, pp. 51-63. Research," J. Manage. Inf. Syst., vol. 24, no. 3, pp. 45-77, 2007.

[13] M. Y. A. Majid, G. S. Seang, and L. L. Lee, "Warehousing


Services in Malaysia," Reducing Unnecessary Regulatory Burdens
in ASEAN, p. 176, 2018.

[14] J. Hustoft and B. Weber, "The impact of digital transformation on


the electric power industry: an explorative study of the largest
Norwegian distribution system operators," 2019.

[15] B. Adrian, M. Niko, and P. Peter. (2016). The digital utility: New
opportunities and challenges.

[16] T. Nguyen, Z. Li, V. Spiegler, P. Ieromonachou, and Y. Lin, "Big


data analytics in supply chain management: A state-of-the-art
literature review," Computers & Operations Research, vol. 98, pp.
254-264, 2018.

[17] G. Wang, A. Gunasekaran, E. W. Ngai, and T. Papadopoulos, "Big


data analytics in logistics and supply chain management: Certain
investigations for research and applications," International Journal
of Production Economics, vol. 176, pp. 98-110, 2016.

[18] A. Knut, G. Christoph, H. Kai, and K. Per-Magnus. (2016). Big


data and the supply chain: The big supply chain analytics
landscape. Available: https://www.mckinsey.com/business-
functions/operations/our-insights/big-data-and-the-supply-chain-
the-big-supply-chain-analytics-landscape-part-1

[19] S. Zillner et al., "Big data-driven innovation in industrial sectors,"


in New Horizons for a Data-Driven Economy: Springer, Cham,
2016, pp. 169-178.

[20] B. Cao, R. Farr, M. Byrne, and J. Tannock, "Data-driven simulation


of the extended enterprise," 2004: Citeseer.

[21] R. Sari, R. Kosala, B. Ranti, and S. H. Supangkat, "COSO


Framework for Warehouse Management Internal Control
Evaluation: Enabling Smart Warehouse Systems," in 2018
International Conference on ICT for Smart Society (ICISS), 2018,

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 8

Electronic copy available at: https://ssrn.com/abstract=3582428


The 1st International Conference on Information Technology and Business ICITB2020

Appendix A.

The methodology used in this study.

A. M. A. Rahman, N. A. A. Bakar, N. Z. A. Rahim, and H. Sallehudin 9

Electronic copy available at: https://ssrn.com/abstract=3582428

You might also like