Inventory management: how inventory technology is changing ...
Transcript of Inventory management: how inventory technology is changing ...
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Inventory management:
how inventory technology
is changing traditional
inventory management
processes
Anagnostou Christina
SCHOOL OF ECONOMICS, BUSINESS ADMINISTRATION & LEGAL STUDIES
A thesis submitted for the degree of
Master of Science (MSc) in Management
December 2020
Thessaloniki – Greece
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I hereby declare that the work submitted is mine and that where I have made use
of another’s work, I have attributed the source(s) according to the Regulations set in the
Student’s Handbook.
December 2020
Thessaloniki - Greece
Student Name: Christina Anagnostou
ID: 1102180021
Supervisor: Korina Katsaliaki
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Abstract
Inventory management is one among the foremost essential business processes
throughout production as a result of it relates to purchases, sales, and supplying
activities. There are many managerial tools in order to control inventories and some of
them are: Enterprise Resource Planning (ERP) systems, Automated Quality Control
(AQC) systems, Supply Chain Planning (SCP) systems and Warehouse Management
(WMS) Systems. This study aims to provide information about inventory management
in real-time by employees in this field and investigate if the latest inventory
management innovations attached to new technology are adopted by Greek firms.
Specifically, if employees are familiar with these inventory management tools, if they
were recently updated, if these tools are cost and time effective and eventually if they
will undermine human presence in warehouses.
To test all the above, an online survey was distributed to employees working in
firms across Greece. Respondents gave mixed results, they are using these tools but not
in a great extent, they don’t strongly agree with the fact that these tools help a company
become more profitable in the future and that the tool that is in need for a large
improvement is the automated quality control system (AQS). Responses were analyzed
and interpreted with appropriate tables. Finally, a correlation analysis is performed, by
using the Pearson’s r parametric linear correlation coefficient in order to determine
whether the four different inventory management systems indeed make a difference in
the customer service level and if employees are undermined by the continuous growth
of IT. These results suggest that there is room for further analysis of these tools
separately in order to scope the power of their presence in the Greek industry.
Anagnostou Christina
December 2020
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Preface
Inventory management is a combination of techniques, instruments, and
technologies that is adopted by a business in order to manage and monitor its inventory.
The approach on how to utilize and apply it, ranges from basic to highly developed. It
depends on the business's necessities, capacity, and practicability.
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Contents
ABSTRACT ................................................................................................................ III
PREFACE ...................................................................................................................IV
CONTENTS .................................................................................................................V
TABLE OF FIGURES AND TABLES ...............................................................................VI
INTRODUCTION .......................................................................................................VII
REVIEW OF THE LITERATURE ..................................................................................... 1
INTRODUCTION ...................................................................................................................... 1
SEARCH DESCRIPTION ............................................................................................................. 1
THEORETICAL FRAMEWORK ...................................................................................................... 3
Enterprise Resource Planning (ERP) systems .................................................................... 3
Evolution of ERP systems .................................................................................................. 4
Automated Quality Control (AQC) systems ....................................................................... 5
Evolution of AQC systems ................................................................................................. 5
Supply Chain Planning systems (SCP)................................................................................ 6
Evolution of SCP systems................................................................................................... 6
Warehouse Management Systems (WMS) ....................................................................... 7
Evolution of WMS systems ................................................................................................ 8
Adoption of inventory management systems in Greece, UK and USA.............................. 9
SURVEY OF RELATED EMPIRICAL STUDIES ..................................................................................11
METHODOLOGY ...................................................................................................... 14
OBJECTIVE AND RESEARCH QUESTIONS ......................................................................................14
RESEARCH TOOL USED IN THE SURVEY .......................................................................................14
VALIDITY AND RELIABILITY ......................................................................................................16
DATA ANALYSIS ....................................................................................................................17
RESULTS............................................................................................................................18
CONCLUSIONS ......................................................................................................... 29
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BIBLIOGRAPHY ........................................................................................................ 33
APPENDIX................................................................................................................ 36
TABLE OF FIGURES AND TABLES
Table 1 : Questionnaire Reliability .................................................................................. 17
Table 2 : Demographics .................................................................................................. 18
Table 3 : Extend of usage of inventory management tools ............................................ 19
Table 4 : Evolution of the four managerial tools ............................................................ 20
Table 5 : Time saving, cost saving and efficiency ........................................................... 21
Table 6 : Lower warehousing cost (material wastage) and better customer service .... 23
Table 7 : Reduced labor cost and reduced humans in the field ..................................... 24
Table 8 : Management systems and company’s performance ....................................... 25
Table 9 : Need for technological improvement in the respondents’ firm ...................... 26
Table 10 : Efficiency of the tools and higher customer service for the four systems .... 27
Table 11 : Reduced labor cost and necessity of humans in the field ............................. 28
Figure 1 : The flow of inventory in an organization (Prachi M, 2019) .............................. 2
Figure 2 : New management systems favor a company’s performance degree in
hierarchical order ............................................................................................................ 25
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Introduction
The first chapter of this dissertation refers to the introduction concerning a crucial
part of today’s management of organizations the inventory management.
Inventory management is one among the foremost essential business processes
throughout production as a result of it relates to purchases, sales, and supplying
activities. Inventory management alludes to all the actions included in developing and
controlling the inventory levels of raw and semi-finished materials along with completed
products. Inventories are fundamental for maintaining the flow of production, the
market movement, and, thus, the supply system (Ziukov, 2015).
Inventory management methods are vital for business operations since their
success and cost decrease requires superior supply chain performance and integration
within the business. These procedures are significant, and knowledge in them is very
alluring; therefore, managers and procurement workforce ought to be able to apply
them for the wealth of the organization(Oluwaseyi, Onifade and Odeyinka, 2017).
This study is likely to present information regarding inventory management in
real-time by employees in this field and investigate the latest inventory management
tools attached to new technology. This research will ultimately test the new
technological processes and how these inventory management techniques improve
organizational performance, optimize production, and maximize profits (Aro-gordon
and Dharmasthala Manjunatheshwara, 2016).
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Review of the Literature
The second chapter of this dissertation refers to the review of the literature
concerning inventory management.
Introduction
“Everyone agrees that effective supply‐chain management can provide a
significant source of competitive advantage. The goal of a supply chain manager must
be to link the end customers, the channels of distribution, the production processes, and
the procurement activity in such a way that customers′ service expectations are
exceeded and yet at a lower total cost than the competition. One of the enabling factors
for achieving this goal is the effective use of information technology (IT)” (Hammant,
1995). “Managers must continuously seek reliable and effective inventory practices and
systems to remain competitive” (Closs, 1989). “Literature suggests that sophisticated
and complex inventory models will drive performance; however, a combination of basic
well‐grounded inventory theory with simple management procedures carried out by
experienced staff leads to better performance” (Stanger et al., 2012). “A multi-
disciplinary approach, combining awareness of the importance of the dynamics of the
whole supply chain with proper skill and experience, leads to new thinking, enabling
staff to make better inventory decisions resulting in better performance and reduced
wastage. Managerial changes and training are critical for excellent inventory
performance” (Stanger et al., 2012).
Search Description
Based on the importance of inventory management and new techniques in the
field, the purpose of this research is to present current technological processes that
optimize traditional inventory management. Specifically, it focuses on examining how
technology improves activities such as inventory levels of raw and semi-finished
materials along with completed products. The major topics to be answered are 1. Which
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is the current technological tools in inventory management? 2. How familiar are Greek
SMEs with these inventory management processes? 3. How these processes improve
inventory management? 4. What are the main advantages that inventory management
tools offer to organizations in terms of profitability and time-saving?(Chapman, Soosay
and Kandampully, 2003).
Initially, it is crucial to specify the control systems examined in this particular
research. The next diagram shows the traditional path that firms use to produce, store,
and distribute their products.
Figure 1 : The flow of inventory in an organization (Prachi M, 2019).
This research focuses on four organizational system control techniques. These are:
enterprise resource planning systems (ERP), automated quality control systems (AQC),
supply chain planning systems (SCP), and warehouse management systems (WMS).
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Theoretical Framework
Enterprise Resource Planning (ERP) systems
The extraordinary development of data and communication advances (ICT)
motivated by microelectronics, computer equipment, and software systems have
impacted every aspect of computing applications over organizations. At the same time,
the business setting is becoming more and more complex through functional units
requiring further inter-functional information flow for decision-making, appropriate and
well-organized obtainment of item parts, inventory management, accounting, human
resources, and allocation of goods and services (Fuchs and Otto, 2014).
In this framework, organizations' management requests capable data systems to
increase competitiveness by cost decrease and better logistics. It is commonly
recognized by large and small-to-medium-size enterprises (SME) that the capability of
giving accurate information at the right moment brings huge rewards to organizations
in a universally competitive world of challenging business practices (Kumar, Maheshwari
and Kumar, 2002). During the late 1980s, new programming systems identified in the
industry as enterprise resource planning (ERP) methods have surfaced in the market,
focusing on mostly sizeable complex business organizations. These complex, high-
priced, strong, exclusive systems are off-the-shelf solutions requiring experts to adapt
and implement them based on their necessities.
In many cases, they drive companies towards re-engineering their business
processes to familiarize the software modules' logic for reformation data flow all over
the organization. Contrasting the old, traditional in-house-designed company-specific
frameworks, these software solutions are incorporated multi-module commercial
packages suitable for including “add-ons” when required (Rashid and Patrick, 2002).
The extraordinary evolution of computing capacity and the Internet brings
additional challenges on behalf of the ERP sellers and the consumers to update ERP
items, break the obstacle of proprietorship and customization, and support the
collaborative business over the intranet, extranet, and the Internet in a faultless way.
The sellers guarantee “add-on” modules, several of which are by now in the market as
an indicator of acceptance. It is a never-ending re-engineering procedure, bringing new
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goods and solutions to the ERP marketplace. ERP sellers and clients have recognized the
need for packages that pursue open architecture, provide similar modules, and permit
simple customization and user interfacing (Rashid and Patrick, 2002).
Evolution of ERP systems
The advancement of ERP frameworks firmly followed the remarkable
improvements in PC equipment and programming frameworks. During the 1960s, most
associations planned, created, and executed brought together processing frameworks,
generally robotizing their stock control frameworks utilizing stock control bundles (IC)
(Aro-gordon and Dharmasthala Manjunatheshwara, 2016).
These were legacy systems dependent on programming dialects, for instance,
COBOL, ALGOL, and FORTRAN. Material prerequisites are organizing Material Resource
Planning (MRP) systems formed in the 1970s, together with effectively organizing the
piece or parts requirements as for every great formation design. Subsequent to this
path, new programming systems called fabricating assets organizing (MRP II) were
displayed in the 1980s, underlining the reformation manufacturing process by
synchronizing the resources through creation requirements. (Olhager, 2013).
ERP systems firstly appeared in the late1980s and the start of the 1990s together
with the strength of big business wide among practical management and combination.
As of the innovative foundations of MRP and MRP II, ERP systems facilitate the business
process, including producing, circulation, bookkeeping, financial, human asset the
board, venture the executives, stock management, administration and support, and
transportation, giving availability, permeability, and steadiness over the company.
Throughout the 1990s, ERP sellers included more modules and capacities as
“additional items” to the center modules bringing forward the “expanded ERPs”. These
ERP extensions include initial arrangement and booking Advanced Planning Systems
(APS), e-business arrangements, for instance, client association the executives'
Customer Relationship Management (CRM), and kindly chain the board supply chain
management (SCM)(Rashid and Patrick, 2002).
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Automated Quality Control (AQC) systems
Quality management is pretty much all aspects of the general management
function that decide the quality approach goals and duties, and execute them by means,
for example, quality arranging, quality control, quality affirmation and quality
improvement inside the quality framework. Reliable with this added feature, quality
management is a managerial way of thinking or a methodology comprised of commonly
strengthening standards, which is upheld by a gathering of practices, devices, and
procedures for enduring viability and productivity concerning the frameworks of its
performance (Gupta and Snyder, 2009).
Evolution of AQC systems
Throughout the 1990s, Total Quality Management (TQM) got crucial in the
strategy of top management. Total Quality Management (TQM) is a moderately new
administration reasoning, which has advanced from the somewhat restricted and
unthinking methodology of Statistical Quality Control (SQC) to a more comprehensive
and human-centered methodology. The idea of TQM is a coherent advancement of the
idea of Total Quality Control (TQC). Likewise, another humanistic-situated quality
standard named the Investors in People (IIP) was propelled in 1991, in light of broadly
acknowledged standards of best preparing and advancement practices to empower
associations to improve their preparation and improve their presentation. Gradually yet
slowly, at this point, there is by all accounts more consideration given to individuals with
the framework (individuals turn), in the advancement of value venture.
In the early advancement of quality management, this phase centered on products
(i.e., how can we guarantee quality in a product?). Afterwards, in the later phase, the
focal point of quality management has moved from product to procedure (i.e., How can
we ensure quality in the process?). Subsequent from there, the focus of quality
management moving to system focus (i.e., How can we ensure quality in the system?).
Little by little but steadily, by the later stage, there appears to be more notice given to
people with the system (people spin) in quality control. Therefore, the focus in this
period was on people in an organization. Nowadays the existing development of quality
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management is centered on people with an extensive view towards networks focus (i.e.,
How can we ensure quality in people in the network environment?) and the most
current is the smart focus (i.e., How can we ensure quality in people in the smart
environment?). In this manner, we would declare that since the focus has changed, the
frameworks, instruments, and procedures as well have changed in the quality control
management ground (Gupta and Snyder, 2009).
Supply Chain Planning systems (SCP)
Inside the effective utilization of information technology (IT) in supply chain
management (SCM), enterprises can build up a competitive advantage. IT can speed up
the information flow, making the supply chain more strong and flexible without
deterioration of its efficiency. Superior Planning Systems (APS) complement Enterprise
Resource Planning (ERP) systems by giving usefulness for components of supply chain
planning (SCP).
Though ERP is already an established concept and as a result well researched, APS
is on a previous phase. Worldwide competition has motivated companies in the
direction of the restrictions of interior operations optimization (such as process
management and inventory management), and therefore, there is a necessity of starting
integrating providers and customers into the general value chain processes. By
empowering the involvement of information with supply chain accomplices, IT can form
a real-time integration of the supply chain (Fuchs and Otto, 2014).
Evolution of SCP systems
The concentration on operations planning and control has advanced over 50 years,
from individual equipment to plants throughout a supply chain. Progressively, firms
became conscious that additional factors are essential to take into reflection to reach
operational superiority, not just for interior operations but also for the supply chain
including providers and customers. Meaningfully, these factors interact with the
product, system design, and new concepts and approaches. Key issues in these zones
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assist to summarize the conversation on the development of operations planning and
control over the last five decades (Olhager, 2013).
The initial change happened around 1980 as companies started to realize that the
fundamental characteristics are progressing, which had been not enough to monitor the
limitation of the operation inside the optimization. Quality enhancements, the flow
direction of the construction processes, setup, and interval decreases helped stabilize
production and made control less complex, through rate-based methods. The second
twist happened around the turn of the century after companies saw the need integrate
providers and customers(Olhager, 2013).
Then again, the last ten years showed that the combination of supply chain
partners is not as clear as integrating “internal supply chains” in an organization. It will
probably take one more decade before supply chains are performing as interior
operations – given that it took the least amount of 20 years to go forward from the work
level to sales and operations planning. Consequently, there are still many angles of
supply chain planning that necessitate further investigation (Olhager, 2013).
Warehouse Management Systems (WMS)
As the warehouse role continues to change with the increasing demand for value-
added services and automated processing, information technology (IT) has become an
integral part of warehousing operations. Such technology includes a warehouse
management system (WMS), which has revolutionized how to schedule, plan, and fulfil
orders, track inventories, and ensure the on-time delivery of the right products. In
general, WMS is referred to as a “real-time” inventory tracking, resource management,
and communication system that links corporate level production, purchasing,
scheduling, and logistics activities through improved supply chain visibility. WMS
updates the inventory level on a real-time basis and fills customer orders in the
distribution environment by enhancing inventory visibility. The key objectives of the
WMS include:
• eliminate order fulfilment errors, by-product identification, and continuous cycle
counting.
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• send and receive critical customer/warehouse information with minimum lead
time through electronic transmission.
• maximize labor productivity by managing and prioritizing tasks.
• maximize space utilization by selecting a proper storage location.
• reduce inventory and handling requirements through a continuous flow of
information (Autry et al., 2005).
Evolution of WMS systems
Initially, WMS was a system to regulate the flow and storage of materials within a
warehouse. WMS's role is developing to including light manufacturing, transportation
management, distribution management, and complete accounting systems. In the
beginning, material requirements planning (MRP) was a system for planning stuff
requirements in an exceedingly manufacturing background. Soon MRP became
manufacturing resource planning (MRPII), which gathered the whole MRP system and
added scheduling and capacity planning philosophy.
Ultimately, MRPII resulted in enterprise resource planning (ERP), combining all the
MRPII functionality with full financial, customer, and vendor management functionality.
What is evident is that the development in functionality between Warehouse
Management Systems, Enterprise Resource Planning, Distribution Requirements
Planning, Transportation Management Systems, Supply Chain Planning, Advanced
Planning, and Scheduling, and Manufacturing Execution Systems will only increase the
extent of confusion among companies searching for software solutions for her
operations (Abuhilal, Rabadi and Sousa-Poza, 2006).
Even though WMS continues to obtain added functionality, the initial core
functionality has not changed. The first purpose of a WMS is to manage the movement
and storage of materials within an operation and process the associated transactions.
However, the fundamental logic will use a mixture of items, location, quantity, and unit
of measure, and order information to detect what sequence to perform these
operations (Miclo et al., 2019).
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Adoption of inventory management systems in Greece, UK and USA
Inventory management issues in developing countries distinct somewhat from
issues within the developed country industrial background. The reliance on imported
raw materials and parts was seen as a serious problem area from an inventory
management point of view. This task is further complicated by the governmental
restriction on imports and therefore the developing country confronts specific
bureaucratic delays. Industrialization policies adopted by developing countries create
monopoly situations and as a result, there are not any major motives to reduce
inventory costs (Goonatilake, 1990).
There were major differences between ERP adoption in Greek companies and
corporations in other countries. The adoption and implementation of new inventory
management systems were disintegrated in Greek companies. This fragmentation
showed that the inner enterprise’s culture, resources availability, skills of employees
and therefore the way ERP systems are treated within the business and the supply chain,
play critical roles in determining the success or failure of these systems adoption (Koh
et al., 2006).
A comparison of ERP adoption between the USA, UK, and Greece, showed that
many enterprises are adopting enterprise resource planning (ERP) systems for
improving information flow and order processing efficiency. Before, ERP was generally
adopted by larger enterprises. Today, small and medium-sized enterprises (SMEs) have
begun to adopt ERP systems. Companies in less well-developed economies have begun
to use ERP systems to resolve variety of their manufacturing management problems.
Greek enterprises showed some unique characteristics. Managers had limited
understanding of the strategic nature of the adoption of ERP systems and this contrasted
with the strategic approach of managers within the USA and UK. Greek managers had a
less well-developed understanding of these systems, their capabilities, and limitations.
Greek enterprises didn't have a scientific approach to adopting ERP. There was little
understanding that ERP could enable better financial and accounting operations,
improve inventory management, improve materials management, and other
production-related functions.
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To adapt the successes of ERP adoptions from the USA and UK to Greece won't be
easy. It will require careful customization of the systems and adjusting the
implementation procedures to the local culture, economic, social, and political
environments during which these enterprises operate (Koh et al., 2006).
The majority of organizations implement a top quality system for several reasons.
First, it is often seen as a method of improving internal processes and inventory or
service quality. Second, it may be driven by the adopting organization as a method to
extend home or abroad market share where quality certification contains a value. Third,
it's going to be driven by a customer request for suppliers to verify their quality
assurance systems to the customers’ internal control.
Concerning U.S. companies, one of the foremost important underlying reasons for
becoming certified was the existence of an advert relationship with European markets.
For small companies, quality certification is just a guarantee that a corporation is
employing a quality management system consistent with an inventory of requisites and
procedures.
Establishing a top quality management system by obtaining certifications in non-
profit small to medium enterprises within the UK showed that through correct
development of quality management systems organizations were ready to generate
fundamental savings and business performance enhancement. The worth of quality
management systems depends on the way they're implemented. The performance of
quality management systems can improve if companies carefully adopt the new
standard instead of incorporate it into the present quality management systems.
The evolution of the logic of audits assumes particular importance within the
context of small and medium-sized enterprises since these companies tend to
implement formal quality systems only if there's significant external pressure to try and
do so, and once they do, their approach to the implementation tends to be minimalist.
Implementations in Greece showed that the most important reason for
certification concerned the internal business environment and no particular difficulties
were observed during the quality implementation. Strong internal motivation or
willingness to enhance a company’s quality helped establish a top quality management
system that led to external benefits like the development of the company’s position
within the market (Kaziliūnas, 2010).
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The integration of supply chain processes can offer a successful revenue by which
expenses might as well be diminished and customer service levels progressed. The
method for integration, though, isn't an easy one. Organizations that intend to become
a part of an extended, an integrated supply network can yet anticipate that this could
need a framework empowering effective information flows and streamlined logistics. A
key element of this framework will be based on robust and flexible collaboration with
exchanging partners. The foremost successful of these networks are those that are able
to recognize the mix of information necessities, physical logistics and collaboration,
giving mutual benefits to a majority of associate organizations (Power, 2005).
Investment in human resources for training, implementation, and similar tasks
doesn't appear to contribute profits in terms of inventory holdings, backorder reduction,
or better customer service. These results are also encouraging to managers considering
WMS solutions, as they may indicate that the systems are easily understood, used, and
implemented, that employees require little additional advice or instruction, and no
additional investment in human capital is required to work and maintain them. The
findings indicate that the hardware/equipment and software which will be implemented
to form firms more fast and accurate not only influence internal warehouse but are also
effective in providing other benefits like heightened customer service via reduced stock-
outs and greater reliability of deliveries (Autry et al., 2005).
Survey of Related Empirical Studies
This study, “Enterprise resource planning systems adoption process: a survey of
Canadian organizations”, investigates critical enterprise resource planning (ERP)
adoption issues such as adoption motivations, justification, risks and criteria for a
selection of product vendor and implementation partners. The innovation process study
approach is taken and data are collected through a questionnaire and by structured
interviews. The study identifies many critical concerns in the organizational innovation
process of ERP adoption (Kumar, Maheshwari and Kumar, 2002).
The second study, “Adopting new technologies for supply chain management”,
develops a model of the key factors influencing the adoption of supply chain technology.
The following set of variables were hypothesized to have a significant impact upon the
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pace of technology adoption: firm size, organizational structure, integration of supply
chain strategy with overall corporate strategy, past financial performance, supply chain
partner pressure, transaction climate and environmental uncertainty. The model
provides a better understanding of the supply chain technology diffusion process. The
paper also includes a survey, which has been developed to test the model (Patterson,
Grimm and Corsi, 2003).
The third study, “Smart solutions for RFID based inventory management systems:
a survey”, is a survey of the latest technologies, algorithms and state of the art
localization techniques that can be used to serve as Internet of Things communication
protocol by automating an RFID system. In this paper, a survey of the state-of-the-art
technologies, algorithms, and techniques used in smart Radio Frequency Identification
systems based inventory systems is presented. First the design challenges for RFID-
based inventory management systems are outlined followed by a comprehensive survey
of various RFID technologies, RFID types, and RFID architectures (Alwadi et al., 2017).
In the fourth study, “Innovation in logistic services and the new business model A
conceptual framework”, through an extensive literature review, the paper examines the
factors that nurture innovation in logistics services, identifies the contributions of the
new “resources” and, using industry examples, examines the application of these
resources to logistics firms as they assume an extended role within the new business
model (Chapman, Soosay and Kandampully, 2003).
The fifth study, “Assessing the effects of operational processes and information
systems on inventory performance”, develops a structural equation model that
evaluates the impact of enterprise-wide information systems, along with four
operational processes, on inventory performance. The results indicate that the use of
operational processes, especially just-in-time (JIT), rather than the use of enterprise-
wide information systems, leads to improved performance as measured by inventory
speculation, lead times, and turnover ratios (Rabinovich, et al., 2002).
The sixth study, “Operations management and advanced manufacturing
technologies in SMEs”, explored the increased requirements for competitiveness,
innovation, quality, flexibility and information processing capability which led a number
of small and medium-sized enterprises (SMEs) to implement advanced manufacturing
technologies (AMT). Using a contingency theory perspective, a survey study of 118
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Canadian manufacturers was made to determine the performance outcomes of the “fit”
or alignment between the critical success factors (CSFs) of operations management in
SMEs and their level of proficiency in the use of AMT (Raymond, 2004).
The last study, “Moving Procurement Systems to the Internet: the Adoption and
Use of E-Procurement Technology Models”, reports the results of a research project
addressing the current state of e-procurement technologies. The results indicate that
the final equilibrium may include several technologies, each one serving a different
segment of the market. This multiplicity of solutions is likely to further delay the
transition of the industry to its growth stage (Davila, Gupta and Palmer, 2003).
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Methodology
The third chapter of this dissertation refers to the methodology adopted in order
to conduct a research concerning the four basic systems of inventory management
mentioned in the previous chapter.
Objective and research questions
Through this research it is attempted to explore the perceptions and opinions of
people working in companies that are using inventory management tools such as ERP,
AQC, SCP and WMS concerning the time saving , the simplicity of some operations using
an appropriate software and the profitability growth of the company (Panayides, 2004).
In particular, the research questions that should be answered through this assignment
are the following: 1. Which is the current technological tools in inventory management?
2. How familiar are Greek SMEs with these inventory management processes? 3. How
these processes improve inventory management? 4. What are the main advantages that
inventory management tools offer to organizations in terms of profitability and time-
saving?
Research tool used in the survey
To obtain the required primary data to be able to provide answers to the above
research questions, a quantitative survey was carried out, which is, in fact, a highly
popular data collection tool within the context of investigating the attitudes and
perceptions held by a social group. The content validity was assessed and the
questionnaire was modified to measure the presence of inventory management in
today’s working environment. The survey included seven sections. A five-point scale
that ranged from “not at all” = 1 to “to a great extend” = 5 to was used to value the
views of people working in the field about these inventory management techniques, to
determine the importance of inventory management tools in a company’s financial
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performance and the fear of advanced technology undermining human presence in the
working environment. The researcher constructed the questionnaire in such a way that
answering the initial research questions is ensured.
In the first section of the questionnaire, an investigation takes place on the
participants' demographic characteristics, like gender, age, educational background,
and occupation. It should be reported that data collection was conducted in step with
the principles of research ethics, which implies that no personal data were requested
from the participants who provide their identification details similarly as that none of
the participants was forced to require part within the survey against their will.
The second part of the questionnaire examines how the four inventory
management tools are used and the extent to which Greek employees use them. In
particular, the first question examines at what extend these four inventory systems are
used in a specific company, while the second one examines in what particular
organizational functions the systems are used. The questions were inspired by the fact
that the focus of operations planning and control for manufacturing firms has expanded.
New principles, techniques, and systems have emerged that have allowed for new
approaches. The perspective for planning and control has expanded from internal
production operations to supply chain operations linking suppliers, manufacturers, and
customers (Olhager, 2013).
The third category of questions examines how these inventory management
systems replaced traditional techniques, how often and which system is more likely to
be updated. More specifically, the two questions are meant to study the evolution of
these managerial tools and how they replaced automated processes over time
(Patterson, Grimm and Corsi, 2003).
The fourth section consists of three questions which examine the influence of
inventory management systems on time-saving, cost savings and overall customer
service performance. It is after all the main reason that companies are willing to pay
tremendous amounts of money in order to buy and implement these tools (Patterson,
Grimm and Corsi, 2003).
The following three questions from the fifth section examine the performance of
a company that has adopted new inventory management techniques and points out the
alteration of some factors that result in an increased profitability (Jones and Riley, 1984).
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Also, there are two questions from section six concerning the beliefs of person working
in these fields concerning their beliefs about the replacement of human by developed
IT systems.
Finally, section seven is consisted of two questions based on bibliography and
investigates the potential use of one of these systems in a frame of one year from now
and in what specific department there is a need for improvement. The first question is
based on the fact that new companies in Greece are now trying to develop these
systems that so far are not so widely used (Kumar, Maheshwari and Kumar, 2002).
As a bit of ultimate information, a pilot study was conducted before the
questionnaires were provided to the final study sample, involving four respondents. The
aim of this pilot study was to secure that questions are well understood. Small changes
in some questions were suggested and adopted. After concluding that the questionnaire
is ready, it was provided to the whole sample. The questionnaire of this study was
completed by 71 respondents using the non-probability sampling.
In this particular sampling method, the samples were selected based purely on the
researcher’s knowledge and credibility. Analytically, the researcher chooses only those
people who are appropriate to participate in the research study. Thus, the respondents
were people who, most of them, are known to work in Greek SMES as well as in
multinational companies in the UK.
Validity and reliability
The questionnaire was pretested on 4 individuals and was revised on the basis of
their feedback. It was then sent via e-mail to the rest of the respondents. A total of 100
questionnaires should be promoted, and 71 of them were actually completed (response
rate 71%).
The attitude data were first tested for reliability using Cronbach’s alpha to assess
data reliability. The results are shown in Table 1. As most research method guides treat
a value higher than 0.7 as acceptable, the values in the table indicate that the data
collected from the survey are reliable and suitable for further analysis.
17
Questionnaire section Number of questions Cronbach a
1. Usage of the 4
managerial tools in the
appropriate functions
(Questions 5,6)
2 0.87
2. Time and cost saving
using inventory
management systems
(Questions 9,10,14)
3 0.95
3. Efficiency and cost
effectiveness
(Questions 11,12,13)
3 0.93
4. Replacement of humans
by IT
(Questions 15,16)
2 0.84
Overall 10 0.97
Table 1 : Questionnaire Reliability
Data analysis
Data were analyzed with the use of the statistical package SPSS. Data were first
collected and registered and then presented in the next chapter with the use descriptive
statistical methods (mean and standard deviation). In addition, inferential statistics
were used in order to compare some of the demographics with the acquired knowledge
from our data. Based on that knowledge, the appropriate statistical method was
applied, the Pearson’s correlation coefficient.
18
Results
The first part of this statistical study helps us to clarify the nature of the basic
demographic characteristics of respondents taking part in it. Thus, as regards
consumers’ demographic profile, the 62% of the study sample consists of men and the
38% of women, while the 9.9% of the respondents are between 18 to 25 years old, 66.2%
are 26 to 33, 16.9% are 34 to 41 and 7% are over 41 years old. As regards their
educational status, 1.4% of the respondents have primary education, 28.2% have a
bachelor degree, 64.8% have a master and 5.6% hold a PhD title. The study sample
consists of 66.2% employees, 25.4% managers, 4.2% CEO, while the 4.2% of the
respondents are students.
Ν %
1.Gender Male 44 62%
Female 27 38%
2.Age
18-25 7 9.9%
26-33 47 66.2%
34-41 12 16.9%
41> 5 7%
3.Level of education
Primary school 1 1.4%
Bachelor 20 28.2%
Master 46 64.8%
PhD 4 5.6%
4.Occupation
Employee 47 66.2%
Manager 18 25.4%
CEO 3 4.2%
Student 3 4.2%
Table 2 : Demographics
Considering the degree that the respondents use the inventory management
tools, this can be characterized as medium, as the mean score of the corresponding
factor is equal to 2.73 (SD = 1.40). These people show a medium level of knowledge of
inventory management and how such tools can be used in the appropriate
organizational functions.
19
Statement
1
(not at
all)
2 3 4
5
(to a
great
extend)
Mean SD
5.The following inventory management systems are used regularly in your working environment
ERP 13
(18.3%)
12
(16.9%)
15
(21.1%)
13
(18.3%)
18
(25.4%) 3.15 1.45
AQC 23
(32.4%)
18
(25.4%)
16
(22.5%)
10
(14.1%)
4
(5.6%) 2.35 1.23
SCP 27 (38%) 13
(18.3%)
10
(14.1%)
12
(16.9%)
9
(12.7%) 2.48 1.46
WMS 27 (38%) 15
(21.1%)
10
(14.1%)
10
(14.1%)
9
(12.7%) 2.42 1.44
6.The following organizational functions are using the appropriate inventory management
systems from the previous list
Warehousing 19
(26.8%) 22 (31%)
9
(12.7%)
10
(14.1%)
11
(15.5%) 2.61 1.42
Manufacturing/operations 16
(22.5%)
10
(14.1%)
16
(22.5%)
20
(28.2%)
9
(12.7%) 2.94 1.36
Accounting 12
(16.9%)
12
(16.9%)
17
(23.9%)
15
(21.1%)
15
(21.1%) 3.13 1.38
Order management 17
(23.9%)
16
(22.5%)
15
(21.1%)
10
(14.1%)
13
(18.3%) 2.80 1.43
Extend of usage of the 4 inventory management tools 2.73 1.40
Table 3 : Extend of usage of inventory management tools
In the third section of questions it is obvious by the results that 38% of the
respondents believe that only a percentage between 31 and 50% there have been a
replacement of the traditional techniques of inventory management with new ones.
Another 29.6%, the second bigger percentage, thinks that a 51 to 70% the traditional
techniques have indeed been replaced by the new managerial tools. As for the second
question of the section the most recent update there is a 36.6% that thinks that the
update has been made in the ERP system and another 26.8% believes that the update is
nowhere mentioned which actually means that no update has been made to these
inventory management tools.
20
Statement N %
7.To what extend inventory management systems been incorporated (replacing manual transactions with
automated processes) within the previous functions
0-30% 14 19.7%
31-50% 27 38%
51-70% 21 29.6%
71-100% 9 12.7%
8.The most recent update in the inventory management hardware/software was in
Enterprise Resource Planning (ERP)system 26 36.6%
Automated Quality Control (AQC)system 8 11.3%
Supply Chain Planning (SCP) system 13 18.3%
Warehouse Management system (WMS) 5 7%
Nowhere mentioned 19 26.8%
Table 4 : Evolution of the four managerial tools
Taking into consideration the belief of the respondents about how these
managerial tools are time and cost effective as well as the efficiency of them, this can
be characterized as quite low, compared to the previous section, as the mean score of
the corresponding factor is equal to 3.09 (SD = 1.39). Most of the correspondents seem
to do not find a certain relationship between time, cost and efficiency that these
inventory management tools offer to firms in general.
21
Statement
1
(not at
all)
2 3 4
5
(to a
great
extend)
Mean SD
9. In these departments, how time-saving is the use of appropriate software?
Warehousing 18
(25.4%)
11
(15.5%)
13
(18.3%)
13
(18.3%)
16
(22.5%) 2.97 1.51
Manufacturing/Operations 14
(19.7%)
12
(16.9%)
15
(21.1%)
21
(29.6%)
9
(12.7%) 2.99 1.34
Accounting 11
(15.5%)
8
(11.2%)
18
(25.4%)
21
(29.6%)
13
(18.3%) 3.24 1.31
Order management 13
(18.4%)
12
(16.9%)
15
(21.1%)
15
(21.1%)
16
(22.5%) 3.13 1.42
10. To what extend the use of inventory management systems resulted in cost savings in each of
the following departments?
Warehousing 16
(22.9%)
17
(24.4%)
10
(14.3%)
11
(15.7%)
16
(22.9%) 2.91 1.50
Manufacturing/operations 14 (20%) 9
(12.9%)
15
(21.4%)
23
(32.8%)
9
(12.9%) 3.06 1.34
Accounting 12
(17.7%)
7
(10.3%)
17
(24.9%)
20
(29.4%)
12
(17.7%) 3.19 1.34
Order management 15
(22.1%)
7
(10.3%)
19
(27.9%)
18
(26.5%)
9
(13.2%) 2.99 1.34
11. Are these inventory management tools providing efficiency and an overall better service level?
ERP 6
(9%)
9
(13.4%)
15
(22.4%)
16
(23.9%)
21
(31.3%) 3.55 1.31
AQC 14
(20.9%)
13
(19.4%)
15
(22.4%)
13
(19.4%)
12
(17.9%) 2.94 1.40
SCP 11
(16.7%)
12
(18.2%)
15
(22.7%)
16
(24.2%)
12
(18.2%) 3.09 1.36
WMS 17
(24.6%)
10
(14.6%)
16
(23.2%)
11
(15.9%)
15
(21.7%) 2.96 1.48
Time saving, cost saving and efficiency 3.09 1.39
Table 5 : Time saving, cost saving and efficiency
Considering the statement that inventory management tools operate in favor of
better management of inventories avoiding material wastage, thus lowering the cost
22
and ultimately helping improving the customer service the responses gave a mean 3.03
while the SD is equal to 1.38. Again these people show a medium level of knowledge of
inventory management and how its functions and tools help firms improve their
inventories.
23
Statement
1
(not at
all)
2 3 4
5
(to a
great
extend)
Mean SD
12. The presence of an inventory management culture is thought to prevent material wastage and
increase cost-effectiveness
ERP 5
(7.1%)
17
(24.3%)
20
(28.6%)
13
(18.6%)
15
(21.4%) 3.23 1.24
AQC 13
(18.8%)
14
(20.3%)
16
(23.2%)
12
(17.4%)
14
(20.3%) 3.00 1.40
SCP 11
(15.9%)
12
(17.4%)
10
(14.4%)
20
(29%)
16
(23.2%) 3.26 1.41
WMS 14
(20%)
13
(18.6%)
11
(15.7%)
11
(15.7%)
21
(30%) 3.17 1.53
13. By using inventory management techniques do you notice a higher customer service?
ERP 7
(10.3%)
11
(16.2%)
15
(22.1%)
17
(25%)
18
(26.5%) 3.41 1.32
AQC 16
(23.6%)
13
(19.1%)
18
(26.5%)
10
(14.7%)
11
(16.2%) 2.81 1.39
SCP 14
(20.3%)
12
(17.4%)
11
(15.9%)
19
(27.5%)
13
(18.8%) 3.07 1.43
WMS 19
(28.4%)
8
(11.9%)
14
(20.9%)
13
(19.4%)
13
(19.4%) 2.90 1.50
14. By using inventory management techniques do you notice lower warehousing cost and
reduced inventories?
ERP 8
(11.8%)
16
(23.5%)
18
(26.5%)
18
(26.5%)
8
(11.8%) 3.03 1.21
AQC 16
(23.9%)
17
(25.4%)
17
(25.4%)
13
(19.4%)
4
(6%) 2.58 1.22
SCP 15
(23.4%)
10
(15.6%)
14
(21.9%)
12
(18.8%)
13
(20.3%) 2.97 1.46
WMS 15
(22.7%)
9
(13.6%)
19
(28.8%)
10
(15.2%)
13
(19.7%) 2.95 1.42
Lower warehousing cost (material wastage) and better customer service 3.03 1.38
Table 6 : Lower warehousing cost (material wastage) and better customer service
24
Most respondents seem to believe that inventory management indeed reduces
labor cost and in the future will reduce the presence of humans in the field. With a mean
of 3.15 and an SD of 1.28 it is assumed that in the years to come IT will undermine the
position of some employees in the warehouses so there is a great need of alteration in
the tasks that an employee performs in a place such as a warehouse were inventories
are stored.
Statement
1
(not at
all)
2 3 4
5
(to a
great
extend)
Mean SD
15. By using inventory management techniques do you notice a reduced labor cost?
ERP 7
(10.3%)
14
(20.6%)
25
(36.8%)
16
(23.5%) 6 (8.8%) 3.00 1.11
AQC 12
(17.7%)
16
(23.5%)
23
(33.8%)
11
(16.2%)
6
(8.8%) 2.75 1.19
SCP 15
(22.4%)
9
(13.4%)
15
(22.4%)
20
(29.9%)
8
(11.9%) 2.96 1.35
WMS 14
(20.9%)
13
(19.4%)
12
(17.9%)
15
(22.4%)
13
(19.4%) 3.00 1.44
16. Do you believe that advanced IT systems for inventory management in the future will reduce
the necessity of humans in the field?
ERP 3
(4.2%)
15
(21.4%)
28
(40%)
8
(11.4%)
16
(22.9%) 3.27 1.17
AQC 10
(14.5%)
8
(11.6%)
24
(34.8%)
9
(13%)
18
(26%) 3.25 1.36
SCP 5
(7.5%)
13
(19.4%)
19
(28.4%)
9
(13.4%)
21
(31.3%) 3.42 1.32
WMS 6
(8.8%)
10
(14.7%)
15
(22%)
16
(23.5%)
21
(30.9%) 3.53 1.31
Reduced labor cost and reduced humans in the field 3.15 1.28
Table 7 : Reduced labor cost and reduced humans in the field
Most of the respondents in the last section of the questionnaire regarding a firm’s
performance when there is a use of inventory management tools have quite
differentiated opinions concerning the particular tools and that can be interpreted as an
overall need of presence of a strong IT department in firms which should improve
25
constantly these managerial tools. The mean is 3.61 and the SD 1.25. As for the last
question the most respondents believe that quality systems (29.4%) need the most an
improvement as well as the ERPs (25%). Definitely quality systems especially in cases of
industry play crucial role in the correct storage and control of inventories. ERPs are vital
for all companies and will be in the future a necessity.
Statement
1
(not at
all)
2 3 4
5
(to a
great
extend)
Mean SD
17. Do you believe that new management systems favor a company's performance?
ERP 4
(5.8%)
5
(7.3%)
20
(29%)
14
(20.3%)
26
(37.7%) 3.77 1.20
AQC 8
(11.6%)
4
(5.8%)
22
(31.9%)
17
(24.6%)
18
(26.1%) 3.48 1.27
SCP 5
(7.4%)
6
(8.8%)
16
(23.5%)
21
(30.9%)
20
(29.4%) 3.66 1.21
WMS 7
(10%)
8
(11.4%)
19
(27.1%)
14
(20%)
22
(31.4%) 3.51 1.32
Management systems and company’s performance 3.61 1.25
Table 8 : Management systems and company’s performance
Figure 2 : New management systems favor a company’s performance degree in
hierarchical order
26
Statement N %
18. Which of the following inventory management systems are in need of technological
improvement in your firm?
ERP 17 25%
AQC 20 29.4%
SCP 8 11.8%
WMS 10 14.7%
Nowhere mentioned 13 19.1%
Table 9 : Need for technological improvement in the respondents’ firm
Subsequently, a correlation analysis is performed, by using the Pearson’s r
parametric linear correlation coefficient. The kind of relationship between two
variables by means of correlation is examined on the basis on the sign (positive or
negative) and if it is weak (correlation coefficient 0-0.3), moderate (correlation
coefficient 0.3 – 0.5) strong (correlation coefficient 0.5 to 0.8) or very strong (correlation
coefficient 0.8 and above). Initially, a positive, strong and statistically significant
correlation between efficiency of the tools and higher customer service for the four
systems ERP (r = 0.674, p < 0.001), AQC (r = 0.778, p < 0.001), SCP (r = 0.644, p < 0.001)
a n d WMS (r = 0.780, p < 0.001) is observed. Thus, the greater the efficiency of the
tools the more improved is the overall customer service. Also, a positive, statistically
significant but moderate correlation relationship between reduced labor cost and
necessity of humans in the field ERP (r = 0.398, p < 0.001), AQC (r = 0.390, p < 0.001),
SCP (r = 0.479, p < 0.001) a n d WMS (r = 0.377, p < 0.001) is observed.
27
CORRELATION
Are these inventory
management tools
providing efficiency
and an overall better
service level? (ERP)
Are these inventory
management tools
providing efficiency
and an overall better
service level? (AQC)
Are these inventory
management tools
providing efficiency
and an overall better
service level? (SCP)
Are these inventory
management tools
providing efficiency
and an overall better
service level? (WMS)
By using inventory
management
techniques do you
notice a higher
customer service?
(ERP)
r=0.674
p=0.000
By using inventory
management
techniques do you
notice a higher
customer service?
(AQC)
r=0.778
p=0.000
By using inventory
management
techniques do you
notice a higher
customer service?
(SCP)
r=0.644
p=0.000
By using inventory
management
techniques do you
notice a higher
customer service?
(WMS)
r=0.780
p=0.000
Table 10 : Efficiency of the tools and higher customer service for the four systems
28
CORRELATION
By using inventory
management
techniques do you
notice a reduced
labor cost? (ERP)
By using inventory
management
techniques do you
notice a reduced
labor cost? (AQC)
By using inventory
management
techniques do you
notice a reduced
labor cost? (SCP)
By using inventory
management
techniques do you
notice a reduced
labor cost? (WMS)
Do you believe that
advanced IT systems
for inventory
management in the
future will reduce the
necessity of humans
in the field? (ERP)
r=0.398
p=0.000
Do you believe that
advanced IT systems
for inventory
management in the
future will reduce the
necessity of humans
in the field? (AQC)
r=0.390
p=0.000
Do you believe that
advanced IT systems
for inventory
management in the
future will reduce the
necessity of humans
in the field? (SCP)
r=0.479
p=0.000
Do you believe that
advanced IT systems
for inventory
management in the
future will reduce the
necessity of humans
in the field? (WMS)
r=0.377
p=0.000
Table 11 : Reduced labor cost and necessity of humans in the field
29
Conclusions
This document was an effort to examine whether four fundamental inventory
management instruments are a key subject of concern in today’s company
management. The results of the study based on associated literature point out that a
suitable inventory control system is closely linked with low storage costs, cost-
reduction, and timely delivery of necessary goods, products, materials, and services to
customers in order to upgrade continued profitability, competitive power, and market
diversification prediction. In the current situation of strong competition and income
pressure, the organization does not have any other alternative than to manage
resources more effectively to survive and to stay economically alive. The adoption of a
suitable combination of some of these approaches can advance service delivery and
minimize the orderly carrying/handling expenses (Aro-gordon and Dharmasthala
Manjunatheshwara, 2016).
After getting some demographic information about the respondents, gender,
age, educational status and occupation the questionnaire was separated in seven
sections. The first section included questions about how often these people use these
four managerial tools in their firms. The results that derived were that not a great deal
of people was familiar with them. This result was quite rational, taking into
consideration that in Greece industries and big companies are few and they are
struggling to survive, as a consequence of higher interest rates which result in costlier
inventory levels, as in 2001 that they could not be absorbed due to the recession of the
Greek economy in that year (Koumanakos, 2008). There is a lack of means, lack of well
trained staff and a big competition with foreign firms which import similar goods.
In the third section of questions respondents had to decide at what percentage
traditional techniques of inventory management have been replaced with new
managerial tools. The results show that 38% of the respondents believe that only a
percentage between 31 and 50% there have been a replacement of the traditional
techniques of inventory management with new ones. The range of the percentage is
below 50% which indeed justifies the statement of the previous paragraph. As for the
second question of the section the most recent update there is a 36.6% that thinks that
30
the update has been made in the ERP system and another 26.8% believes that the
update is nowhere mentioned which actually means that no update has been made to
these inventory management tools. As it is also referred in the literature the ERP system
is the most used inventory management tool in the Greek SME’s (Koh et al., 2006).
The next section was created in order to investigate where these tools are actually
used how they are time and cost effective as well as efficient. Most of the
correspondents seem to do not find a certain relationship between time, cost and
efficiency that these inventory management tools offer to firms in general. If the result
is interpreted, it is obvious that respondents are not familiar with these tools and that
is why they cannot understand completely what difference would make the presence of
inventory management in certain departments of a company. Not only inventory
management is cost and time effective but also it offers a unique way of dealing with
everyday difficulties in the company. All employees follow the same protocols when it
comes to production, storage and customer service (Orobia et al., 2020).
Inventory management includes determining the accurate amounts to order and
to maintain at a given time because of the related expenses. Holding too much inventory
increases tied-up capital which results in deterioration, out of date quality, damage, and
loss of inventory through pilferage and burglary. On the other hand, the lack of inventory
is connected with a pause in sales due to stock-outs, inferior consumer relationships,
and underutilized machinery and equipment. This is merely not possible if the individual
involved possessing the knowledge, skills, and abilities essential in planning, monitoring,
and controlling inventory level. Therefore, when small business managers have the main
knowledge of inventory management procedures, skills, and abilities to apply the
strategies, this will enhance the way they manage their inventory, which, in a twist, will
improve their business sales and prosperity (Orobia et al., 2020).
Considering the statement of the following section that inventory management
tools operate in favor of better inventory management, avoiding material wastage, thus
lowering the cost and ultimately helping improving the customer service, the responses
were characterized as of medium knowledge. Again respondents show a low level of
understanding how inventory management and its functions and tools help firms
improve their inventories.
31
Most respondents seem to believe that inventory management indeed reduces
labor cost and in the future will reduce the presence of humans in the field. It is clearly
assumed that in the years to come IT will undermine the position of some employees in
the warehouses so there is a great need of alteration in the tasks that an employee
performs in a place such as a warehouse were inventories are stored. Humans will be
needed in the future but in a different organizational form. It departments will indeed
be strong but the human brain is crucial when it comes to decisions, inventiveness and
initiatives.
The past 20 years have been stamped by fast technological expansion, such as the
internet, GPS, radio-frequency recognition, smartphones, automation (robots and
drones), big data, and artificial intelligence (AI). Individuals have also experienced
phenomenal levels of collaboration and globalization. While companies have situated or
outsourced their operations to take benefit of cheap and skilled labor, plant capacity,
design, and engineering expertise, and closeness to significant material and
components, supply chains have turned out to be ever more decentralized and reach
out around the world. As a result, further issues and challenges have arisen, and the
research community has reacted with new hypotheses and instruments to comprehend
and direct training.
Abundant and ubiquitous computing power at repeatedly inferior cost has
empowered technological advancements such as the internet, GPS, remote
communication, the IoT, robotics, and additive manufacturing (AM). These headways
have given elevation to new business models that are continuing to essentially change
production processes and supply chain arrangements. Worldwide information
accessibility on the superior performance given by top competitors similar to Amazon is
raising customer desires of ever-faster reply times and more choices if at all possible at
a similar price.
Continuing globalization, in that case, can lead to enlarged competition and cost
pressure. Subsequent to the grow of Brazil, Russia, India, China, and some other
countries in the past years, numerous countries may enter the global markets. At the
same time, individuals on different continents could begin to realize that we must be
careful with our planet and its natural resources, which may be accompanied by bigger
32
attention toward sustainability and greenhouse gas emissions. At last, we look ahead to
the current political instabilities to reoccur in the future so that supply chains will
continue to face risks due to closed borders, changes in trade agreements, and
international labor regulations (Song, van Houtum and Van Mieghem, 2020).
In the last section of the questionnaire regarding a firm’s performance when there
is a use of inventory management tools respondents have quite differentiated opinions
concerning the particular tools and that can be interpreted as an overall need of
presence of a strong IT department in firms which should improve constantly these
managerial tools. Industry all over the world is changing fast and moving forward so
sooner or later the Greek market will have to follow and adjust in order to remain
competitive. As for the last question the most respondents believe that quality systems
(29.4%) need the most an improvement as well as the ERPs (25%). Definitely quality
systems especially in cases of industry play crucial role in the correct storage and control
of inventories. ERPs are vital for all companies and will be in the future a necessity.
To conclude with, it was quite necessary to create a correlation between the
examined factors and especially customer service and reduced necessity of humans in
the field. The correlation was very strong between the four different managerial tools
and this assures the above claims.
Greek companies overall need to reevaluate the full extent of their functions,
systems, and processes in the whole supply chain. They must aim to synchronize
activities among the partners in the network with the aim of gaining and integrating
knowledge. Application of new technologies, particularly in inventories, must be
synchronized across the network to improve management processes and provide
efficiency and productivity across the length of the supply chain. Only then can firms be
successful in taking advantage of their innovative efforts and stay ahead in the turbulent
global economy (Chapman, Soosay and Kandampully, 2003).
33
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36
Appendix
This questionnaire aims to investigate your experience with inventory management
techniques in your company. This survey is purely conducted for academic purposes.
Responses will be kept strictly confidential and you are not requested to display anywhere
your name or other personal information, as this survey is anonymous.
Inventory management questionnaire
New inventory management technology systems
Terms & Definition Enterprise Resource Planning (ERP) systems: ERP offers a centralized system to control information flow through a
manufacturing environment. ERP covers functions such as capacity planning, cost and accounting, order entry,
production management, inventory, and finance. Examples: SAP, Oracle, JD Edwards, PeopleSoft
Automated Quality Control (AQC) systems: AQC Systems help monitor the quality assurance process, inspection
procedures, specifications, and gauge calibration statistics. Examples: Power Way, Pilgrim Software
Supply Chain Planning (SCP) systems: SCP systems, such as supply and forecasting planning, demand planning, and
advance planning and scheduling (APS), are applications that coordinate limited material and capacity resources in
accordance with business dynamic changes. These systems deal with strategic and tactical planning issues that
generally have long time spans. Examples: i2, Manugistics, Logility
Warehouse Management (WMS) Systems: WMS track and control the movement of inventory through the
warehouse, from receiving to shipping. WMS manages the utilization of resources such as space and personnel. It also
offers systematic management of material handling to optimize and shorten fulfillment cycle time reducing cost.
Examples: Catalyst, EXE, Manhattan, Optum
1. What is your gender?
Male
Female
37
2. What is your age?
18-25
26-33
34-41
41>
3. What is your educational status?
Primary education
Bachelor
Master
PhD
4. What is your occupation?
Employee
Manager
CEO
Student
38
5. The following inventory management systems are used regularly in your working
environment
6. The following organizational functions are using the appropriate inventory
management systems from the previous list
39
7. To what extend inventory management systems been incorporated (replacing manual
transactions with automated processes) within the previous functions:
0-30%
31-50%
51-70%
71-100%
8. The most recent update in the inventory management software was in:
Enterprise Resource Planning (ERP) system
Automated Quality Control (AQC) system
Supply Chain Planning (SCP) system
Warehouse Management system (WMS)
Nowhere mentioned
9. In these departments, how time-saving is the use of appropriate software?
40
10. To what extend the use of inventory management systems resulted in cost savings in
each of the following departments?
11. Are these inventory management tools providing efficiency and an overall better
service level?
41
12. The presence of an inventory management culture is thought to prevent material
wastage and increase cost-effectiveness.
13. By using inventory management techniques do you notice a higher customer service?
42
14. By using inventory management techniques do you notice lower warehousing cost
and reduced inventories?
15. By using inventory management techniques do you notice a reduced labor cost?
43
16. Do you believe that advanced IT systems for inventory management in the future will
reduce the necessity of humans in the field?
17. Do you believe that new management systems favor a company's performance?
44
18. Which of the following inventory management systems are in need of technological
improvement in your firm?
Enterprise Resource Planning (ERP) system
Automated Quality Control (AQC) system
Supply Chain Planning (SCP) system
Warehouse Management system (WMS)
Nowhere mentioned