Poor inventory management in supermarkets
Contents
1. Introduction
Most of the organizations in the sector of retails have invested a huge amount of money in inventories. Inventory management is considered very important for supermarkets due to the fact that it allows the replacement of a great variety of products at the right time and with low costs. As a consequence, organizations are focusing on controlling the capital in the activities involved in inventory management. Additionally, this field presents many important opportunities for potential improvements in the sector retails. To achieve this, supermarkets are using different methodologies and techniques for inventory management which include inventory control systems, complex decision models and decision rules. Axsater (2006, p. 1) pointed out that ‘the objective of inventory control is often to balance conflicting goals. One goal is, of course, to keep stock levels down to make cash available for other purposes’.
Despite advances in technology and new and modern techniques in inventory management, Agrawal and Smith (2009) indicated that there are several cases of archaic systems and planning processes used by companies in the sector of retails. This is due to inadequate personnel and controls, low technology infrastructure and insufficient budget for maintaining a continual improvement and hence generating a poor inventory management.
This essay aims to show two crucial steps for inventory management in the sector of retails, focusing on supermarket: (1) The symptoms of the poor inventory management and (2) the methods and techniques for improving. Firstly, chapter 3 describes some of the most frequent symptoms of the poor inventory management. Then, chapter 4 shows the methods and techniques used for improving inventory management, evaluating critically their applications, benefits and problems in supermarkets.
2. Definitions
Inventory: It is any material which is used to satisfy customer
1. Introduction
Most of the organizations in the sector of retails have invested a huge amount of money in inventories. Inventory management is considered very important for supermarkets due to the fact that it allows the replacement of a great variety of products at the right time and with low costs. As a consequence, organizations are focusing on controlling the capital in the activities involved in inventory management. Additionally, this field presents many important opportunities for potential improvements in the sector retails. To achieve this, supermarkets are using different methodologies and techniques for inventory management which include inventory control systems, complex decision models and decision rules. Axsater (2006, p. 1) pointed out that ‘the objective of inventory control is often to balance conflicting goals. One goal is, of course, to keep stock levels down to make cash available for other purposes’.
Despite advances in technology and new and modern techniques in inventory management, Agrawal and Smith (2009) indicated that there are several cases of archaic systems and planning processes used by companies in the sector of retails. This is due to inadequate personnel and controls, low technology infrastructure and insufficient budget for maintaining a continual improvement and hence generating a poor inventory management.
This essay aims to show two crucial steps for inventory management in the sector of retails, focusing on supermarket: (1) The symptoms of the poor inventory management and (2) the methods and techniques for improving. Firstly, chapter 3 describes some of the most frequent symptoms of the poor inventory management. Then, chapter 4 shows the methods and techniques used for improving inventory management, evaluating critically their applications, benefits and problems in supermarkets.
2. Definitions
Inventory: It is any material which is used to satisfy customer
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