Abstract
Purpose: There are many kinds of methods to evaluate the inventory management and economic performance of small and medium enterprises, but they still have some distinct shortcomings. In order to achieve a better evaluation result, we put forward a new model based on the evidences from developing country like India. Approach: This survey study, mainly based on the evidences from machine tool SMEs in India uses statistical methods to avoid the drawbacks of qualitative techniques. Findings: Through empirical data, it is established that ‘technology’ is not the only concern, but other factors related to human resource, economic, organizational and behavioral aspects of SMEs are also vital in improving their IM performance. Originality: This study combines the role of factors such as managerial, technological, economical and contingency together for the first time in the context of SMEs.
Highlights
Small and Medium Enterprises (SMEs) occupy a place of strategic importance in developing as well as developed countries owing to its considerable contribution to national income, employment, exports, and entrepreneurship development (Saxena, 2012)
SMEs in inventory intensive manufacturing industries are likely to be aware of the need and importance of Inventory Management (IM) practices
Our study with reference to machine tools SMEs in Bangalore has indicated that these SMEs without exception are aware of the importance of IM practices
Summary
Small and Medium Enterprises (SMEs) occupy a place of strategic importance in developing as well as developed countries owing to its considerable contribution to national income, employment, exports, and entrepreneurship development (Saxena, 2012). Zeng and Hayya (1999) described the major functions of inventory as: (1) to support and provide necessary inputs for manufacturing; and (2) to protect companies against uncertainties that arise from such cases as discrepancy between demand and production, machine deterioration, and human errors, among others They further argue that regardless of the type of a firm, the management effectiveness of inventory decisions centers on three areas: cost, service level, and turnover ratio. The SMEs, specially manufacturing enterprises, which contribute significantly to Indian economy in several ways, use significant amount of materials but are found striving for inventory utilization, inventory efficiency and other aspects like inventory measurement. There is hardly any study found in the literature on IM even in the context of inventory intensive manufacturing Indian SMEs of any particular sector from any region of the country.
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