The effectiveness of the stock management system in a chain of grocery stores : a case study

Abstract

Purpose: The main purpose of this study is to evaluate and analyse the case company’s inventory management system, identify their strengths and weaknesses and understand which areas are least effective. The study then puts forward recommendations on how these shortcomings may be addressed by the Company in order to improve overall operations. Design: A qualitative case study approach was adopted to be able to effectively reach the research objectives set. Both primary and secondary data sources were used to obtain the required information. Primary data was obtained through a number of interviews within the case company employees, all of which were semi-structured. Secondary data was collected from various sources such as books and journals. Findings: The findings of this study showed that the case company does have relatively adequate systems in place to manage its inventory efficiently and effectively. However, there is substantial room for improvement as variances are still material. The company is having difficulties with theft issues and effectively managing perishable items. The findings revealed that one of the biggest issues is the element of human error in the stock management process and inefficiencies in the IT system. Conclusion: The overall performance of the company has been negatively affected by the process of managing stock, however, the system is improving and internal controls are being implemented to tackle weaknesses. Hence, the company is in fact in the process of improving the overall stock level accuracy. Recommendation have been made as to how the Company can go about improving its systems further. Value: Despite being a case study focusing only on the inventory management of the specific case company, having an effective inventory management system is the key to success for all companies operating within the retail industry. Thus, the findings of this study are useful not only for the case company, but for other similar companies looking to improve on their current daily operations relating to inventory management.