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Overview of Existing Studies

The transition from manual to automated inventory control systems in SMEs has led to significant reductions in carrying costs and improved stock accuracy. Traditional inventory management methods have resulted in inefficiencies and inaccuracies, prompting the need for automation to enhance operational efficiency. Recent studies highlight the importance of supply chain modeling and performance measures in achieving competitive advantages in logistics and inventory management.

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3 views3 pages

Overview of Existing Studies

The transition from manual to automated inventory control systems in SMEs has led to significant reductions in carrying costs and improved stock accuracy. Traditional inventory management methods have resulted in inefficiencies and inaccuracies, prompting the need for automation to enhance operational efficiency. Recent studies highlight the importance of supply chain modeling and performance measures in achieving competitive advantages in logistics and inventory management.

Uploaded by

jensonkutty03
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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2.

1 Overview of Existing Studies

The switch from a manual based inventory control system to an automated one is a
dramatic shift in the way SMEs operate. Using empirical evidence, it has been realised that
organizations that have adopted the automated tracking of inventories have greatly reduced the
carrying costs by between 15-20% as well as having enhanced the precision of the stock level
(Pillai, 2010). Technological advancement has made it possible for SMEs to go a step further
in their inventory management from mere tallying of stock to modern approaches that employ
decision making tools such as data analytics or real time data tracking. These innovations have
given rise to ways in which SMEs can enhance their inventory management systems and
consequently cut down their expenses.

2.2 Evolution of Inventory Management in SMEs

Inventory management has significantly evolved and come with it a radical change in
the general flow of business operations. Small and medium-sized enterprises (SMEs) have over
the years used traditional methods to manage inventories, and this has had some repercussions,
which are include inefficiency, high carrying costs, and inaccurate inventory records. The
investigation of manufacturing SMEs showed that traditional ways used in inventory
management make average stock deviation of 25-30%, which in turn affects the enterprise
efficiency and profitability (Muchaendepi et al., 2022). The move towards automated systems
has therefore been deemed most essential especially given the mounting pressure SMEs are
experiencing in their bids to improve operation efficiency and stay relevant in the global
economy. A study shows that EAMRM’s basic automation tools have resulted in inventory
accuracy increase of up to 40% supporting the increase of operational efficiency through
technological integration by SMEs (Akindipe, 2022).

The supply chain with multiple suppliers by investigating a problem where a


manufacturer and multiple buyers for the production of single item are involved was discussed
by Jaber and Goyal (2022). Requirement for manufacture of the product to assemble one unit
of the finished product is work done for multi-items, production and supply, and considering
the number of suppliers equal to the number of items required by one unit. Involving multiple
suppliers, a producer and multiple retailers as members of the chain, a three-layer supply chain
model was considered. The retailer sale the items to the customers which are delivered to the
multiple retailers by producer who produces multiple finished products whose raw materials
were supplied by multiple suppliers. Another deterioration rate for finished items of retailers
and Deterioration rate for raw material with the different rate of deterioration this model was
accomplished. An optimal solution has been reached at and the sensitivity of that solution has
been checked with respect to different system parameters, setup has been explored numerically
as well. The model is not only economically feasible but it also provides stable results were
shown by final result. N. Singh et al. (2024) based on the calculus approach derived a cost
minimization model along with an efficient solution algorithm.

Many firms seeking competitive advantage by issues of cost, customer service, and
quality as significant objective in the development of logistic network strategies. An overview
and evaluation was presented by Beamon (2017) of the performance measures used in supply
chain models. The ability to respond to a changing environment, High level of efficiency, and
high level of customer service are summarized as performance measures where either of these
must coincide with the firm’s strategic goals. For analyzing systems such network flow
problems have been studied extensively. Beginning with Ford & Fulkerson (2022), a great
number of algorithms have been highlighted for various versions of flow problems. Supply
contracts with periodical commitment, in which the order quantities are stationary and fixed,
with limited flexibility to change the order quantity at a cost to the buyer was modeled and
analyzed by Urban (2022). A mixed-integer linear program was formulated as a problem and
as a network flow problem. With consideration given to specific demand distributions the
solution methodology was provided for the general stochastic problem.

Berry & Naim(2016), Li & Brien(2016), are some recent sources of supply chain
modeling and simulation not included in the Beamon (1998) study. By them Main stream of
using cost and some customer responsiveness measure was followed. For Supply chain
Analytical models was provided by Berry and Naim (2018) and Li and O’Brien (2018).
Customer service level, stock and production costs, in a case-based supply chain redesign effort
involving just-in-time manufacturing, logistics integration and interplant planning, vendor
integration, and time based management was used by Berry and Naim. Four performance
criteria; profit, lead-time, delivery promptness, and inventory cost, when proposing a
hierarchical approach to supply chain modeling was used by Li and O’Brien. Bhaskaran and
Petrovic (1998) used subset of these performance indicators when simulating supply chains.
When studying the impact of forecast errors and the use of Kanban versus MRP, in a stamping
pipeline at an autonomous plant Bhakaran used inventory levels as performance indicator.
When simulating a made-up, serial supply chain with infinite capacity Petrovic used total
cost and fill-rate. Rather than relying on a single measure. Beamon advocated the use of a
mix of measures, representing resources, output and flexibility.

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