SUMMARY LEAN INVENTORY

ImImpact of Inventory Management on Firm’s Efficiency – A Quantitative Research Study on Departmental Stores Operating in Karachi

BY : 1Faraz Khan, 2Dr. Danish Ahmed Siddiqui 1Research Scholar, 2Associate Professor Karachi Social Science and Humanities Journal  University Business School, University of Karachi, Pakistan. VOL-03, ISSUE-04, 2019

This study investigated the effect of various inventory management factors on firm’s efficiency. These factors included Capacity Utilization, Inventory Accuracy, Lean Inventory, and Stock Availability.

Data was collected by the use of liker scale questionnaire from 250 individuals from different departmental stores in Karachi. Data was analyzed using Structural Equation Modeling.

The results showed Inventory Accuracy, Lean Inventory, and Stock Availability has positive and significant impact on efficiency. However, Capacity Utilization doesn’t seem to affect efficiency. Hence, main indicator of inventory control comes out to be inventory accuracy which allows having an effective control of the outputs of the different goods.

Inventory plays a significant role in the survival and growth of any business in the sense that inefficient and ineffective inventory management will imply that the organization loses customers with a decline in sales.

Effective inventory management allows an organization to meet or exceed customer expectations by creating stocks of each product that maximize net income. Corporate policy that promotes efficient inventory management is the first component of successful inventory management

(Graves, & Willems, 2000).

According to the study conducted by Nel, & Badenhorst-Weiss, 2011 :

organization using lean inventory system should manage their supply chain cycle in order to successfully achieve firms’ efficiency. The study used non-probability sampling to collect data from 13 organizations and the selection was done from Sunday Times top brand surveys 2008 & 2009.

The findings of the study shows that it is necessary for the firms to manage their supply chain drivers accord supply chain strategy. Moreover, according to the authors of the study, lean inventory management techniques and principles can be applied successfully in the retail sector as it improves operational flows.

In addition, implementation of lean inventory management encourages manufacturers to produce standard products in accordance with the place (created) orders from retailers in conformance to the consumer demands

The study used a descriptive research design. The reason of selecting a descriptive research design is because of its efficacy as it serves as a valuable tool for the presentation of cause & effect numerical techniques such as correlation and regression analysis and involved a significant amount of numeric data. According to Kothari (2004) this helps in more precise description of objects, processes and activities.

inventory control indicators allow the firm to organize, manage and utilize the best inventory control model in order to improve the flow of inventory. With the results of the investigation it can be concluded that the most used inventory control indicators, is the Lean Inventory system, which handles the most important variables: the cost quantity and rotation. Furthermore, Inventory control indicators can also allow the firm to measure and qualify how the inventory process works, and shows the strengths and weaknesses of the inventory control system currently used in an organization. Managing inventories in a departmental store is key to reducing costs.

The results of this study stipulate that adequate and efficient inventory management enhances firm performances as its settles the bottlenecks in demand supply equation of departmental stores in Karachi.

 erating in Karachi
 

Firm’s Efficiency – A Quantitative Research Study on Departmental Stores Operating in Karachi