The Importance of Inventory Management in Small Scale Enterprises
The Importance of Inventory Management in Small Scale Enterprises
Abstract
In today's competitive environment, this article briefly covers some current work on inventory management and its difficulties and dilemmas. The research focuses on small and medium-sized manufacturing firms with very complicated manufacturing processes. The primary aim is to identify the key challenges that small and medium-sized manufacturing firms face as a result of the complexity of their production processes. Several sections of the article examine and discuss certain instances from the Czech business environment as well as findings from the author's prior study. The last section provides a brief case study detailing the adoption of a number of minor changes that should have a beneficial impact on inventory management and result in cost savings for the business.
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Introduction
In order to compete in today's competitive market, many manufacturing firms are constantly growing and changing their product portfolios, which increases the complexity of their production processes. According to Deshpande (2010), systems are highly complicated due to a large number of components (materials, manufacturing resources, end products, and so on). Another problem is variability or uncertainty, which has an impact on any system's high complexity. Customer demand is particularly variable throughout the manufacturing process. All of the aforementioned factors make inventory and production management very challenging. In his research of an Indian industrial sector, Sharif (2012) highlighted the demand-supply imbalance, which leads to a lot of losses and production issues. Rajeev (2010) demonstrated the significance of inventory management for Small and Medium-Sized (SMEs) manufacturing businesses by examining its impact on economic performance. His research focused on India's machine tool industry, which is notorious for its high inventory levels.
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Conclusion
As we saw in the previous section, inventory management has a significant impact on a company's success, and it is much more essential and challenging in complicated manufacturing processes, particularly for SMEs. Given that SMEs are a major source of employment and economic development in all industrialised nations (not just Europe), their performance should be closely monitored. ROI is considered to be the most widely used technique for assessing economic success, and it is affected by a number of tactical goals. These tactical goals, however, may not necessarily push ROI in the correct direction since they often clash with one another. Since a result, businesses must be cautious about the improvements they achieve, as they may not always have a beneficial effect on the company's success. They must discover the best balance of efficiency and adaptability for the system.
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