Management of inventory for firms’ efficiency – a study on steel manufacturing industry

Abstract

PurposeThe purchase is becoming a more difficult cum tactical decision that affects the cost factor, quality factor, time factor and responsive factor of the buy and maintains them. The purpose of this study is to investigate the effect of inventory management (IM) practices on operational efficiencies (OEs) in Indian steel manufacturing firms.Design/methodology/approachThe study is based on a quantitative research design that has collected information from 321 key officials of Indian steel manufacturing firms. The analyses are carried out with the use of statistical techniques such as confirmatory factor analysis and structural equation modeling (SEM).FindingsThe paper finds that inventory management (IE) has a considerable impact on the OE of steel manufacturing firms in India. The manufacturing industry must highlight the significance of inventory management practice (IMP) for enhancing firm efficiencies in a volatile environment with the help of management teams. Understanding the impact of IE practices on firms’ OE would be helpful for company shareholders and investors.Practical implicationsThe paper suggests the manufacturing industry to emphasize the role of inventory management practices to have better productivity of the firm. This research focuses on the relationship between IMP and OE.Social implicationsEffective and efficient use of inventory will be helpful in reducing the overall cost of production and reduced costs to customers.Originality/valueCompanies require resources to attain a long-term competitive edge. Also, as a consequence, the research is compatible with resource-based view (RBV) theory.