The effectiveness of automatic inventory replenishment in supply chain operations: Antecedents and outcomes

The issue of buyer-seller relationships in supply-chain management research is becoming increasingly critical. Global competition and maturing domestic markets have driven supply-chain members to reassess their distribution techniques to remain competitive in the market. Finns need inventory replenishment systems that enhance customer service whereas at the same time reduce inventory costs. Many retailers are demanding time-phased replenishment. They want delivery made just as they need the stock for sale. High levels of anticipatory inventory are no longer acceptable. Retailers want high-volume, high-rum items delivered on a just-in-time basis. In this study, we investigate the use of automatic replenishment programs (ARPs) and the effectiveness of these ARPs in today's markets. Through a survey of U.S. retailers and manufacturers, we examine the transaction specific, strategic, and organizational antecedents that drive automatic replenishment efforts, as well as the effects of these efforts on the firms' strategic and economic performance.