The case highlights the implementation of Delivery Order (DO) system by Samsung India. The system was developed to surmount the shortcomings of Just-in-Time (JIT) inventory system. One of the benchmarks in the history of Samsung India was the establishment of a refrigerator plant in 2004 which pushed production volume drastically. The DO system not only facilitated the company to handle the augmented production volume but also helped to solve the problems such as shortage of warehousing space, high inventory cost and avoiding stock out situation. There was a three-phased implementation of this system. First, total quality control and inspection was shifted to the vendors end; second, setting up DO for D day and D+2 days; and finally, Samsung Local Procurement System (SLPS) site was linked to Systems Applications and Products (SAP). Thus, DO reinforced the implementation of an efficient inventory system by Samsung India.

Inventory is the stock of any item or resource used in an organization. An inventory system is the set of policies and controls that monitor and maintain the levels of inventory, the stock to be maintained and replenished, and how large the orders should be.

By convention, the manufacturing inventory generally refers to items that contribute to or become part of a firm's product output. Manufacturing inventory is characteristically classified into raw material, finished products, component parts, supplies and work in progress. In services, inventory generally refers to the tangible goods to be sold and the supplies necessary to administer the service.

For maintaining an optimum level of inventory, an effective inventory system is required, which presents the organizational structure with efficient operating policies for maintaining and organizing goods to be stored. The system is accountable for ordering and receipt of goods: Placing the order at the right time, keeping track of the order, quantity of the order, and source of the order. The system also must be able to answer such questions: Has the supplier received the order? Has the order been shipped? Are the dates proper? Are the practices established for reordering or returning undesirable merchandise?

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