Inventory Management Essay Example

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Inventory management is the ability to effectively and efficiently run an organization. The process is significant to the demands of a business in areas such as customer service, manufacturing, supply chain management, market competition and so on. A superior operations management is meant to analyze and improve business practices by enhancing productivity and delivering high quality standards (Bagchi et al, 2007). In business today operations managers are important because they acquire the necessary skills and technology to aid the organization in production and services.

Inventory management is the focus of most of the changes that affect businesses. The managers must find solutions that are long-term and that affect businesses globally. Therefore, the changes must be beneficial to the society and the environment. Companies are continuously trying to enhance productivity and minimize inventory through technological advancements and other process development projects. Inventory management is an area that has substantial attention from the corporate world as the most successful tool for cost reduction. The use of information technology in inventory management has enhanced communication between members of the supply chain and reduced wastage of time and other resources in a company (Kithinji, 2015). The use of ICT is essential in meeting the diverse needs of the business and consumers, as well as enhancing the skills of the employees in the organization.

Production operations and inventory management are beneficial to the economy. Thus, most managers recommend that for smooth operations, large tasks should be subdivided into sub-tasks so that workers can specialize in their areas of operations. Operations management has gone through various changes in strategy over the years. Some skills included specialization of labour in production, division of labour, operations research and so on. As the years progressed, technology started being applied n production. Digital computers ensured that it was possible to do large-scale computations and integration of operations. Therefore, in today’s world, operations management is not concerned with merely production and operations managements but rather the skills and technologies applied during the whole process.

Technology and inventory management

The last decade has been revolutionalized by technology in all sectors and this has changed the way organizations run their business. There is significant changes in operations management since companies started using technology. Some positive transformations include an increase in productivity, enhanced products designs, and improvements in operating systems. The use of technology is meant to make sure that the organization reduces cost, enhance the delivery methods, and improve quality control and to ensure that the customers get value for their money (Kithinji, 2015). Therefore, advancements in technology have lead to focus, improvements and improved customer experiences.

Businesses need to manage inventory at all times. Technology has replaced the limited and tiring manual entry system of inventory transactions. Most companies have adopted the use of bar codes to capture inventory data. Thus, improving efficiency and aiding in the maintenance of accurate inventory levels in all levels of the supply chain. Therefore, bar code is one of the technological developments that is used in inventory management to ensure that all the relevant data is recorded and mistakes are avoided. Some advantages of bar coding include an easy work process, real-time data, and serial number tracking.

Radio-frequency identification (RFID) is another technological application that can be used to track anything, including goods and services. The RFID is an upgraded paradigm of the bar code and it is more superior because it reduces time and cost in the inventory cycle. RFID leads to swift transmission of data so it helps a business avoid having shortages or excessiveness of inventories at a reduced cost (Bagchi et al, 2007).

Inventory management system is an arrangement that covers all areas of managing a company’s inventories such as purchasing, receiving, shipping, tracking, storage and turnover among other aspects. Companies that have used technology to integrate all these aspects with logistics and supply chain has an edge. The integrations puts the inventory management into a just-in-time system which essentially links the demand- supply system to a real-time electronic point of sale also known as EPOS. The advantage of this technology is that it records demands from the customers and tracks orders. Thus, the technology significantly reduces hold-ups in retailer inventory and the amount of capital held-up in the supply chain.

Developments in inventory management also include the use of E-business and E-commerce. Electronic information technology is supposed to help the business operate successfully and efficiently. E-business allows people in to communicate effectively in the supply chain. E-commerce is a term used to describe different approaches that a business can take to conduct its activities in a paperless setting. The main advantage of E-commerce is that it cares for the environment and ensures the fulfillment of social responsibility of the company to the society. Some approaches used in E-commerce include electronic fund transfers, bar coding, RFID, internet and so on. Both processes are substantial to inventory management because they create new opportunities, reduce cost, and improve productivity.

Evolving of current skills

The use of technology in inventory management is a significant way of providing the business with comprehensive customer data. Therefore, employees must use this information to better customer services and design products that suit the needs of the consumers. The facilitated communication throughout the supply chain enhances performance and helps employees manage their vision. ICT is important in fostering collaborative relationships because of the increased information processing capabilities (Kumar, Mishra, & George, 2013). Therefore, all members of the supply chain will be forced to reduce human interactions with each other and create a more cooperative structure using the available technology.

Members of the supply chain must learn how to compromise between the accuracy of data and the cost of data collection to ensure accountability. The lack of transparency is a challenge to most organizations and the incorporation of ICT will help many employees make decisions that affect inventory with a positive attitude so as to optimize the objectives of the organizations. To increase the success of the implemented technologies, members of the supply chain must provide solutions that generate more benefits to the company (Jung, Chen, & Jeong, 2007). Additionally, employees must enhance their skills through training which is necessary to understand the organizational behaviours and provide reasonable solutions.

In brief, technological advancements over the years have altered main aspects of operations. The new tools and technologies have been included into the design and inventory management systems. A supply chain encompasses all the activities related to the transformation of products from the extraction of raw materials to satisfying consumer demands. Therefore, there should be no inaccuracies in the supply chain to avoid problems in inventory management. The innovations of ICT provide solutions that can be applied in different levels to influence inventory management in an organization. There are different technologies that can be used to enhance inventory management and each one is important in improving the skills of the members of the supply chain.


Bagchi, U., Guiffrida, A., O’Neill, L., Zeng, A., & Hayya, J. (2007). The effect of RFID on inventory Management And Control. Trends In Supply Chain Design And Management, 71-92.

Jung, H., Chen, F. F., & Jeong, B. (2007). Trends in Supply Chain Design and Management: Technologies and Methodologies. London: Springer-Verlag London Ltd.

Kithinji, F. M. (2015). Impact of information technology on inventory management in supermarkets in Nairobi city county (Doctoral dissertation, Doctoral dissertation, University of Nairobi). Abernathy, FH, Dunlop, JT, Hammond, JH, & Weil, D.(2000). Retailing and supply chains in the Information age. Technology in Society, 22 (1), 5-31).

Kumar, N., Mishra, A., & George, S. A. (2013). Gaps between inventory management theory and practice: a critical examination of emerging trends from the FMCG industry. International Journal of Logistics Economics and Globalisation5(1), 1-14.