موجودی آلمان به نسبت فروش 1971-2005 -تجزیه و تحلیل تجربی از تمرین کسب و کار

The purpose of this study is to test empirically for the first time the general hypothesis that inventory to sales ratios have decreased over time in the German economy. Although inventory reduction has been a prevalent topic in the production and operations management literature, there is a lack of empirically confirmed answers to questions. They are as follows: Have inventories in German firms decreased overall during the past decades? What sectors of German industry are leading (lagging behind) inventory reduction? Has inventory reduction developed differently for raw materials, work-in-process, or finished goods? In which periods was marginal inventory reduction greatest? To the best of our knowledge, this empirical study is the first to broadly investigate inventory development from the 1970s until the present for a major European economy, Germany, and will provide the first answers to the research questions stated above using aggregate industry-level data provided by the Deutsche Bundesbank. We show that inventory levels decreased overall in many sectors of German industry. This reduction was mainly marked for raw materials and finished goods, particularly for the second-half of the time frame investigated.

For more than three decades now there has been continuing discussion about how lean a company should be. The starting point can be seen in the early 1980s, when Western managers and scientists began to discover the tremendous success of Japanese firms at that time. Most visitors to Japanese companies were mainly impressed by their drastically reduced inventory levels. Hence, inventory reduction became a prevalent topic. Myriads of articles and case studies have been written about the needs of firms and their efforts to reduce inventories and inventory carrying costs. Furthermore, a new management paradigm was coined. Interpreting inventory as a consequence of underlying waste to be eliminated causing inventories to drop and productivity to rise, a level of “zero inventory” became one of the main goals for managing production processes under this paradigm (Nakane and Hall, 1983, Grünwald and Fortuin, 1992, Zangwill, 1992 and De Haan and Yamamoto, 1999). In the course of time, more and more activities from operations and supply chain management trying to achieve the goal of stockless production were summarized under the “just in time” paradigm in its broadest sense (Hall, 1983), and were conceptualized even more broadly some years later under the “lean production” paradigm (Womack and Jones, 1994). JIT systems have been widely established in business practice during the past decades. However, although these concepts have been known for decades, they are currently enjoying their second heyday (Demeter and Matyusz, 2010). Companies in several industries are still applying such practices or are even starting to implement them to provide more fuel for their race for profits. There are very few papers, which empirically analyze the effects of these paradigms on business performance in general and on inventories in particular. With respect to national economies there is only one country in which inventories are sufficiently studied: the United States (US). Outside the US empirical inventory research is largely unexplored (Chikán et al., 2011). This is all the more surprising as there is a great deal of capital tied up in inventories, costing firms a lot of money (not only in times of recession). At the end of 2005, German businesses held more than 400 billion EUR worth of inventory. Undoubtedly, this is a remarkable sum: roughly estimated over 5000 EUR per head in Germany. But who actually holds inventories? Companies of course; at the end of 2005 there were nearly two million of them holding an average of 200,000 EUR worth of inventory. The motivation behind this article is the lack of empirically confirmed answers to the following research questions: Have inventories in firms actually decreased overall during the past decades? What industry sectors are leading (lagging behind) inventory reduction? Has inventory reduction developed differently for raw materials, work-in-process, or finished goods? Has marginal inventory reduction been greater since the 1990s, when inventory consciousness increased due to the “zero inventory” paradigm? Can we see any effect of modern systems of inventory control on inventories held? How far are German firms away from “zero inventory”? Outside the US economy there is hardly any empirical evidence on inventory performance over the long term. Therefore it seems fruitful to compare existing knowledge with findings from Germany, as a major European economy. German industry is especially concerned with different manufacturing sectors at all stages of the production process, i.e. raw materials, work-in-process, and finished goods. This study is the first to conduct a broad, empirical investigation of inventory development for the German industry from the 1970s until the present and will provide answers to the research questions stated above. Furthermore, this is the first study to use aggregate industry level data provided by the Deutsche Bundesbank over a time frame of four decades and to be based on the most extensive statistical analysis of financial statements in Germany. The paper is organized as follows: In the following section we review the existing body of literature and summarize major findings. In Section 3 we describe our research methodology as well as the data sources used and develop several hypotheses regarding inventory trends in the past decades. The results are presented and discussed in Section 4. We conclude with limitations and further opportunities for research.

The aim of this study is to investigate the rate of change in inventory ratios of German firms between 1971 and 2005, treating multiple stages of the production process separately, i.e. raw materials, work-in-process, and finished goods using aggregate industry-level data based on a broad sample in terms of size, legal form, and industry. The results provide an interesting picture of the state of inventory reduction of German firms. Firstly, we are able to show that German firms broadly reduced inventories in many manufacturing sectors and the wholesale trade and for our sample in general. Secondly, these reductions were particularly marked for raw materials and finished goods. Comparing our results with other studies, we find contrasting evidence that at their “borders” German firms performed better at reducing raw materials and finished goods inventories than work-in-process inventories. However, there might be a major opportunity for production and operations management of German firms to raise further productivity potentials hidden in the work-in-process inventories. This could be one managerial insight of this study and serve as a major advantage for German industry to improve its competitive position in the future. Thirdly, we find a particularly strong improvement in the second-half of our time frame, which does not hold for the German manufacturing industry as a whole. Instead, we observe major improvements in both the wholesale and retail industries since the mid-1990s in regard to reducing inventory to sales ratios. Nevertheless, there are also limitations regarding our empirical findings and conclusions. Some of these limitations raise further research opportunities: Firstly, for a better understanding of different causes of the inventory development seen in the different sectors, a detailed analysis on the firm level would be sensible. This kind of analysis requires disaggregate data (which is hard to obtain) to guard against an “aggregation bias”, i.e. differently performing firms in a sector canceling each other out. Secondly, although the data provided by Deutsche Bundesbank is very representative, sample effects could not be ruled out entirely in certain sectors due to changes in the methods used for data collection during our time frame. Thirdly, the analysis of changes in factor prices as well as concentration tendencies in several industries on inventory performance could also be helpful in order to explain industry-specific developments. Fourthly, because we were using annual data, seasonal effects could have been hidden. Analyzing quarterly or monthly data could offer insights into the variability of inventories in the short term; e.g. to control for business cycle effects or to find the “bullwhip effect” (Cachon et al., 2007). As mentioned above, a good inventory policy necessarily deals with trade-off decisions. Inventory holding always costs money but is not always bad, because inventories do have benefits as well. Hence, the notion “less inventory is better” will not be true in all cases. Therefore, it would be interesting to investigate further the links between higher customer service levels or better quality control and inventory levels, for example, or the impact of postponement strategies on different inventory stages. There are other factors leading to increases in inventory, of course, such as product variety or the implementation of global sourcing strategies, which could serve as a starting point for further research. This also holds for the effects of outsourcing or off-shoring production activities on inventory holding, which have been neglected so far. While we know from the automobile industry that increased sourcing from firms that maintain sites just a stone's throw away from the carmakers’ factory is in line with just-in-time principles, the greater the distance, the harder the quality of these supply links becomes to maintain. Increasing and more variable lead times due to longer transportation naturally result in higher stocks. Finally, it would be of some interest to explore the cause and effect relationship between inventory holdings and financial performance (and vice versa). While it is clear that ceteris paribus lower inventories cause higher return on assets, this relation does not necessarily hold in the real world, which does not offer a ceteris paribus opportunity in most cases. However, for the purposes of this research it seems necessary to use firm-level data, even though the question of causality will be hard to answer.