Inventory Management

Inventory Management

The Role of Inventory Management in the Retailing Industry (A case of Walmart Retail Introduction)

The modern society has been characterized by the advancement of technology that has changed the normal procedures of doing the tasks. Companies applying modern technology are considered to have a more competitive advantage than the ones which do not apply. In inventory management, information technology covers the hardware and software dimensions that help the companies in collecting, organizing, and analyzing the data hence facilitating the achievement of the goals and the objectives. Information technology employees help in computer networking, management of data, ensuring the companies’ security, development of the business software, and helping in updating the computer technology. Inventory management simply means the supervision of the assets, which are non-capitalized and the other stock items. It is a component of the supply chain management that helps in the supervision of the flow of goods from the manufacturers to the stores or warehouses and to their points of sale (Rahim et al., 2018). Like any other area of business management, inventory management has been influenced by information technology. Most of the inventory management processes use information technology techniques such as storing the soft data, designing reliable inventory control systems, analyzing the inventory processes, and also networking the inventory services. This paper carries out the research about inventory management in the retailing industry basing the information from the Walmart retailing company.

Background Information

Inventory management is the monitoring of records or unsold properties or resources and store items. Inventory management controls the flow of services and goods from the production to warehouses as well as from these services to the point of selling. The critical role of inventory management involves maintaining and keeping well-organized records for all new products that are returned when they leave or enter the point of sales or warehouse. Small and large organizations can use inventory management in managing and controlling the flow of goods. Inventory management involves several techniques, and the use of the correct method can result in the provision of exact products to the right place, time, and amount. The quality of Materials Company uses for manufacturing or production measures its success. Organizations have operative inventory management will make quality products acknowledged, accountability, and excellent handling of stock.

Walmart retail record management comprises different roles and types of inventory that support the organization’s financial performance. The model helps suppliers’ access information from Walmart’s information systems, for example, information present in record levels and degree at which goods are being sold. Through this inventory management model, the company benefits in reducing delays for inventory moving across the supply chain management (Chan, Tasmin, Aziati, Rasi, Ismail, & Yaw, 2017). Also, it helps to minimize costs used for inventory management activities. Walmart Retail Company is using different types of inventory management techniques. For example, finished goods inventory is essential and significant to the retail business. Walmart has been one of the best retail firms in the United States since it incorporates both traditional and modern technology.

Research Methods

The paper used various strategies to come up with the findings. First, the paper used the secondary sources, which included the journals, magazines, reviewed articles, and the relevant websites which were relevant about the topic. Since the information was all about the inventory management in the retail industry, the paper was very keen about the inventory management processes. The paper also used the primary sources to collect information. The paper was more specific on the Walmart retail firm. This means that most of the samples used were from Walmart. There was the application of the questionnaires, surveying, and face to face interviews. The questionnaires were administered to the employees working on the inventory department and how they view the management. The general working area of inventory management was also observed and taken into account to be used when drawing the conclusion. The primary data was very relevant to give the firsthand information that would help in drawing the relevant information as long as the inventory management was concerned.

Sample Questionnaire

1. How often does the technology updated in the Walmart Retail Company? Thrice per year
2. What is the main role of inventory management? To keep an eye of the goods
3. Do you consider inventory management as a crucial department in the company? Yes
4. Who are the key stakeholders to inventory management? Customers and the shareholders
5. What is the general contribution of inventory management to the general profit of the company? Positive
6. How often do you change the strategies as long as the inventory management is concerned? Once per year
7. How do you deal with the competition? Applying modern technology
8. Can you work without the inventory management department? No
9. Is inventory management reliable? Yes
10. How do you deal with the changing technology? Employing qualified information technology employees

Tables, Charts, and Graphs

Walmart Supply Chain Flow Chart

The flow chart begins from the manufacturer to the distribution centre, to the retail stores, and to the clients. The supply chain uses the technology of barcoding, radio calls, electronic devices, and websites to distribute its goods. The distribution channels are regularly updated to ensure that the firm copes up with the advancing technology. This has been one of the secrets that make Walmart keep on moving and having large market shares in the retailing industry. The inventory management team takes it as their responsibility to ensure that the goods produced are of high quality, and they are distributed to the final destination while safe. This makes it a key component in the supply chain management hence being termed as the backbone in the supply chain management.

The Flow Time Analysis

The flow time analysis is a key factor in Walmart retailers. This starts when the customer makes an order about any purchase. From this point, the system is designed in a way that captures the data in real-time. After that, the data is transmitted to the warehouses for inventory management. The orders are then generated from the sales of the previous day whereby the merchandise is loaded to onto the trucks using the cross-docking and then delivered to the store. All these processes are managed and generated by the inventory management team with the help of information technology specialists.

Walmart retailers have been recording the increase in its revenue because of their increased investment in the information technology industry. The company has been very keen on designing strategies which are very competitive. When compared to the giant industries like Amazon, Walmart has been very relevant in modern society, and that is why everything is working towards the right side as you can see from the graph. After interviewing some employees from the Walmart Company, it was confirmed that the inventory management should always get updated to cope up with the changing technology, and that is why it is easily entering the international markets.

Findings and Analysis

How Inventory Management Plays a Critical Role in Supply Chain Management

Inventory management is a module of the supply chain management that helps in monitoring of movements of products from producers to the stores or warehouses and their points of sale. It is considered to be the most critical element of supply chain management as it deals with the supervision of products since when they are produced until they are delivered to the final consumers (Shin, & Tucci, 2015). The inventory management team ensures that the goods are kept safe all the time. It also ensures that the products sold are of high quality and meet all the standards as the authorities require them.  Inventory management ensures that once the customer requests for any product, he or she gets it within the specified time and its excellent conditions. In addition to that, inventory management carries out the market analysis on the customers for them to decide how to brand the products. It can, therefore, be considered as the key supporter of supply chain management as it deals with goods or products, which are the main current assets of the business (Singh & Verma, 2018). Inventory management decides the customers will come again for the products, or they will never.

Inventory management is the backbone of the supply chain management as it helps in determining undesired stock that finally affects the manufacturing line as well as the final product. Therefore, inventory management makes the production process continuous (Chakraborty, 2019).  Inventory management also helps in auditing by ensuring desired audit results; thus, the organization making profit maximization and shareholder satisfaction through the supply chain management.

How Inventory Management Is Influenced By Information Technology

The modern society is characterized by the advancement of technology that has changed the standard procedures of doing the tasks. Companies applying advanced technology are considered to have a more competitive advantage than the ones which do not use. In inventory management, information technology covers the hardware and software dimensions that help the companies in collecting, organizing, and analyzing the data hence facilitating the achievement of the goals and the objectives (Tuan Mat, Johari, & Abdul Azis, 2018). Information technology employee’s help in computer networking, management of data, ensuring the companies’ security, development of the business software, and assisting in updating the computer technology.

Information technology application in inventory management ensures cost reduction and efficiency. Companies that use information technology for inventory management has influenced reduction costs for communication, achieve integration, promoting efficiency, and increase the chances of sharing information that leads to performance improvement (Chan, Tasmin, Aziati, Rasi, Ismail, & Yaw, 2017). However, information technology assists in integrating supply chain managing for companies’ systems.

Inventory management simply means the supervision of the assets, which are unsold and store items. It helps in monitoring how goods flow from the producer to the stores or warehouses and their points of sale (Rahim et al., 2018). Like any other area of business management, inventory management has been influenced by information technology. Most of the inventory management processes use information technology techniques such as storing the soft data, designing reliable inventory control systems, analyzing the inventory processes, and also networking the inventory services (Rahim et al., 2018). Most of the activities in inventory management are now carried out digitally. By applying the information technology, modern companies have been able to reduce the cost, improve the data security, maximize profits, and increase the efficiency of the channels of distribution (Yu & Wei, 2018). The information technology tools which are highly applied in inventory management entail electronic information internet technology, scanner and barcoding, business resource development, radio frequency identification, and decision support systems.

Record Management in Industrial Organizations

Manufacturing organizations produce goods that final consumers use they provide the products in large quantities for them to sell to the retailers or directly to the consumers. This means that inventory management is highly needed to manage all the possible channels which the manufacturing companies are using (Shin & Tucci, 2015). For the manufacturing company to get a high market share, it ensures that the products are of high quality, and that is the work of record management. Business success is determined by the superiority of raw material used in production.

Record management in production organizations ensures quality products are received; stock is handled well and its accountability.in the manufacturing organizations helps determine and evaluate stock that harm manufacturing channel and final product, which causes product destruction and customers denial of the manufactured product by customers (Singh & Verma, 2018). Effective and efficient inventory management assists in detecting poor before manufacturing and rejecting the order by returning to the merchant. Record management in industrial groups leads to the continuous production of products.

Inventory Management in Walmart Retail

Walmart retail record management comprises different roles and types of inventory that support the organization’s financial performance. Walmart inventory management is a more significant contributor to its success in the international retail business. Walmart Company is a big retail organization, and efficient and effective inventory management is essential for operational effectiveness (Chakraborty, 2019).  Walmart is using inventory management as a critical success factor to grow its present industry position for being the leading retailers across the world. Walmart’s company strategies for several business locations are connected to inventory management, where strategic methods are exploiting and supporting benefits that are linked by innovations for inventory activities (Tuan Mat, Johari, & Abdul Azis, 2018). Strategies that are applied in inventory management direct connect to Walmart’s productivity and operations management strategies.

Walmart has succeeded in managing and controlling its inventory by implementing a useful vendor-controlled inventory model (Fernando, 2017). The model helps suppliers’ access information from Walmart’s information systems, for example, information present in record levels and degree at which goods are being sold. Through this inventory management model, the company benefits in reducing delays for inventory moving across the supply chain management (Chan, Tasmin, Aziati, Rasi, Ismail, & Yaw, 2017). Also, it helps to minimize costs used for inventory management activities. Walmart Retail Company is using different types of inventory management techniques. For example, finished goods inventory is essential and significant to the retail business.

Goods that are finished arrive at Walmart stores. The received goods are taken to store, and the inventory is done regularly. Transit inventory is the next necessary inventory type for Walmart retail operations (Wibisono et al., 2015). Transit inventory is for merchandise that is held at the transit. Buffer inventory is used by Walmart in stores to keep a small margin for the additional goods purposely to maintain organization continuity, especially when demand rapidly fluctuates (Yu & Wei, 2018). Lastly, anticipation inventory is used to make sure the optimal capacity for satisfying customer demand. Also, it helps in maintaining extra stocks when addressing escalation in order.

Ecommerce Record Management

Record management for e-commerce is a method that determines the amount, pricing, location, and mix of goods available from the business or organization.  These products can be hosted in one’s warehouse, or that is provided by a third-party chain and logistics or being housed in different enterprises and bought by drop shipping.  Inventory for e-commerce helps companies to know products or goods that are overstocked, understocked, in stock, and are out of stock (Shin, & Tucci, 2015). The importance of inventory management for ecommerce ensures the business becomes more competent in its practices when determining the location of items, packaging, and storage for shipment orders. Still, makes the business have an eye on overall inventory, and delight each customer. Further, it helps to eliminate dead stocks or goods and wasted lists as well as creating returning consumers with additional re-order capabilities.

Conclusion

Inventory or record management is monitoring inventory or non-exploited properties or resources or stock items. Inventory management is considered to be the most critical module of supply chain management. It deals with the management of goods since when they are produced until they are distributed to the final customers. Therefore, inventory management makes the production process to continue the process.  Inventory management also helps in auditing by guaranteeing anticipated audit results; thus, the business making profit growth and investor gratification through the supply chain management. Companies that use information technology for inventory management reduces costs for communication, accomplish integration, supporting efficiency, and upturn the chances of shared data that leads to performance improvement.

Inventory management in manufacturing organizations ensures quality products are received; stock is handled well and its accountability. In manufacturing, organizations support influential in assessing bad stock that can hurt the manufacturing channel and final product, as this cause product damage and market rejection of mass-produced product used by customers. Walmart’s inventory management model assists in decreasing delays for inventory moving across supply chain management. Also, it helps to reduce expense used for inventory management activities. Walmart Retail Company is using different types of inventory management techniques such as finished goods, transit, buffer, and anticipation inventory.

References

Chakraborty, M. (2019). Supply Chain & Inventory Management. Available at SSRN 3413725.

Chan, S. W., Tasmin, R., Aziati, A. N., Rasi, R. Z., Ismail, F. B., & Yaw, L. P. (2017, August). Factors influencing the effectiveness of inventory management in manufacturing SMEs. In IOP Conference Series: Materials Science and Engineering (Vol. 226, No. 1, p. 012024). IOP Publishing.

Dhodi, M. H. (2018). The effect of information technology on inventory management for the manufacturing companies in Mogadishu. Eur J Logist Purch Supply Chain Manage, 3, 20-29.

Fernando, M. P. M. C. (2017). WEB-BASED INVENTORY CONTROL & ORDER PROCESSING SYSTEM FOR JC ENTERPRISE (Doctoral dissertation, University of Colombo).

Fitriana, R., Moengin, P., & Riana, M. (2016, February). Information system design of inventory control spare parts maintenance (valuation class 5000)(case study: plant kW). In IOP Conference Series: Materials Science and Engineering (Vol. 114, No. 1, p. 012076). IOP Publishing.

Muyumba, T., & Phiri, J. (2017). A Web-based Inventory Control System using Cloud Architecture and Barcode Technology for Zambia Air Force. International Journal of Advanced Computer Science and Applications, 8(11), 132-142.

Rahim, R., Zufria, I., Kurniasih, N., Simargolang, M. Y., Hasibuan, A., Sutiksno, D. U., … & GS, A. D. (2018). C4. 5 Classification Data Mining for Inventory Control. Int. J. Eng. Technol, 7(2.3), 68-72.

Shin, S., & Tucci, J. E. (2015). Wal-Marts Dilemma In The 21st Century: Sales Growth Vs. Inventory Growth. Journal of Applied Business Research (JABR), 31(1), 37-46.

Singh, D., & Verma, A. (2018). Inventory management in the supply chain. Materials Today: Proceedings, 5(2), 3867-3872.

Singh, D., & Verma, A. (2018). Inventory management in the supply chain. Materials Today: Proceedings, 5(2), 3867-3872.

Tuan Mat, T. Z., Johari, M., & Abdul Azis, M. A. (2018). Influence of information technology, skills and knowledge, and financial resources on inventory management practices amongst small and medium retailers in Malaysia. Asia-Pacific Management Accounting Journal, 13(2), 1-28.

Wibisono, R. S., Sofianti, T. D., & Awibowo, S. (2016). Development of a web-based information system for material inventory control: The case of an automotive company. CommIT (Communication and Information Technology) Journal, 10(2), 71-83.

Yu, X., & Wei, L. (2018, April). Inventory management in the e-commerce supply chain with lateral transhipment and quick response. In 2018 5th International Conference on Industrial Engineering and Applications (ICIEA) (pp. 17-20). IEEE.