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A Study of Inventory Control Systems by Jamaican SMEs in Retail and Manufacturing/Distribution Industries

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  • Fashaya Johnson
  • Thanasak Ruankaew

Abstract

It is widely accepted that firms can achieve effective inventory management with the right strategies. This study analyzed the inventory control strategies of small to medium-sized enterprises (SMEs) in Jamaica. The objectives of the study were to identify whether these companies used the “best practices” in inventory control, the effects of their strategies on business performance, and the factors that affected the development of their strategies. The study employed a methods triangulation approach that included case studies, interviews, questionnaires, and observation with a focus on twelve inventory-intensive SMEs in retail and manufacturing/distribution industries. The SMEs were found to use common inventory control strategies such as stock counts, Enterprise Resource Planning (ERP) systems, forecasting, and inventory classification.The findings of this study support institutional theory and isomorphism because it was discovered that due to external influences, firms studied within the same industry adopted similar strategies, and even in different industries, the ‘best practices’ in inventory control were the same. The drivers of this isomorphic organizational behavior were found to be costs, government regulations, and imitation of successful strategies in other companies. The SMEs surveyed were classified as semi-automated due to limited automation and confirmed success in their inventory management. The study validates the existence of institutionalism among SMEs in the retail as well as manufacturing/distribution industries in Jamaica. A broader scope examining larger firms and other industries would further identify isomorphic organizational behavior across the Jamaican business landscape. For future research, an investigation of financial performance and changes and adoption of new inventory control strategies of Jamaican SMEs is recommended to achieve a broad view of inventory management on the financial performance of Jamaican SMEs.

Suggested Citation

  • Fashaya Johnson & Thanasak Ruankaew, 2017. "A Study of Inventory Control Systems by Jamaican SMEs in Retail and Manufacturing/Distribution Industries," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(8), pages 1-1, July.
    • Handle: RePEc:ibn:ijbmjn:v:12:y:2017:i:8:p:1
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    References listed on IDEAS

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    1. Renate E. Meyer & Markus A. Höllerer, 2014. "Does Institutional Theory Need Redirecting?," Journal of Management Studies, Wiley Blackwell, vol. 51(7), pages 1221-1233, November.
    2. Xin Chen & Zhan Pang & Limeng Pan, 2014. "Coordinating Inventory Control and Pricing Strategies for Perishable Products," Operations Research, INFORMS, vol. 62(2), pages 284-300, April.
    3. Nicole DeHoratius & Ananth Raman, 2008. "Inventory Record Inaccuracy: An Empirical Analysis," Management Science, INFORMS, vol. 54(4), pages 627-641, April.
    4. Parveen Farooquie & M. Nasir Khan, 2010. "RETURNING TO ROOTS FOR REDUCING INVENTORY COSTS IN SMEs: A CASE OF INDIAN LOCK INDUSTRY," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 18(03), pages 315-330.
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    Cited by:

    1. Dumisani Mawonde & Casper Demberere, 2022. "The Effect of Inventory Control Systems on Organisational Performance in the Mining Sector of Zimbabwe," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(1), pages 273-279, January.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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