i

Inventory management:

how inventory technology

is changing traditional

inventory management

processes

Anagnostou Christina

SCHOOL OF ECONOMICS, BUSINESS ADMINISTRATION & LEGAL STUDIES

A thesis submitted for the degree of

Master of Science (MSc) in Management

December 2020

Thessaloniki – Greece

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I hereby declare that the work submitted is mine and that where I have made use

of another’s work, I have attributed the source(s) according to the Regulations set in the

Student’s Handbook.

December 2020

Thessaloniki - Greece

Student Name: Christina Anagnostou

ID: 1102180021

Supervisor: Korina Katsaliaki

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Abstract

Inventory management is one among the foremost essential business processes

throughout production as a result of it relates to purchases, sales, and supplying

activities. There are many managerial tools in order to control inventories and some of

them are: Enterprise Resource Planning (ERP) systems, Automated Quality Control

(AQC) systems, Supply Chain Planning (SCP) systems and Warehouse Management

(WMS) Systems. This study aims to provide information about inventory management

in real-time by employees in this field and investigate if the latest inventory

management innovations attached to new technology are adopted by Greek firms.

Specifically, if employees are familiar with these inventory management tools, if they

were recently updated, if these tools are cost and time effective and eventually if they

will undermine human presence in warehouses.

To test all the above, an online survey was distributed to employees working in

firms across Greece. Respondents gave mixed results, they are using these tools but not

in a great extent, they don’t strongly agree with the fact that these tools help a company

become more profitable in the future and that the tool that is in need for a large

improvement is the automated quality control system (AQS). Responses were analyzed

and interpreted with appropriate tables. Finally, a correlation analysis is performed, by

using the Pearson’s r parametric linear correlation coefficient in order to determine

whether the four different inventory management systems indeed make a difference in

the customer service level and if employees are undermined by the continuous growth

of IT. These results suggest that there is room for further analysis of these tools

separately in order to scope the power of their presence in the Greek industry.

Anagnostou Christina

December 2020

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Preface

Inventory management is a combination of techniques, instruments, and

technologies that is adopted by a business in order to manage and monitor its inventory.

The approach on how to utilize and apply it, ranges from basic to highly developed. It

depends on the business's necessities, capacity, and practicability.

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Contents

ABSTRACT ................................................................................................................ III

PREFACE ...................................................................................................................IV

CONTENTS .................................................................................................................V

TABLE OF FIGURES AND TABLES ...............................................................................VI

INTRODUCTION .......................................................................................................VII

REVIEW OF THE LITERATURE ..................................................................................... 1

INTRODUCTION ...................................................................................................................... 1

SEARCH DESCRIPTION ............................................................................................................. 1

THEORETICAL FRAMEWORK ...................................................................................................... 3

Enterprise Resource Planning (ERP) systems .................................................................... 3

Evolution of ERP systems .................................................................................................. 4

Automated Quality Control (AQC) systems ....................................................................... 5

Evolution of AQC systems ................................................................................................. 5

Supply Chain Planning systems (SCP)................................................................................ 6

Evolution of SCP systems................................................................................................... 6

Warehouse Management Systems (WMS) ....................................................................... 7

Evolution of WMS systems ................................................................................................ 8

Adoption of inventory management systems in Greece, UK and USA.............................. 9

SURVEY OF RELATED EMPIRICAL STUDIES ..................................................................................11

METHODOLOGY ...................................................................................................... 14

OBJECTIVE AND RESEARCH QUESTIONS ......................................................................................14

RESEARCH TOOL USED IN THE SURVEY .......................................................................................14

VALIDITY AND RELIABILITY ......................................................................................................16

DATA ANALYSIS ....................................................................................................................17

RESULTS............................................................................................................................18

CONCLUSIONS ......................................................................................................... 29

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BIBLIOGRAPHY ........................................................................................................ 33

APPENDIX................................................................................................................ 36

TABLE OF FIGURES AND TABLES

Table 1 : Questionnaire Reliability .................................................................................. 17

Table 2 : Demographics .................................................................................................. 18

Table 3 : Extend of usage of inventory management tools ............................................ 19

Table 4 : Evolution of the four managerial tools ............................................................ 20

Table 5 : Time saving, cost saving and efficiency ........................................................... 21

Table 6 : Lower warehousing cost (material wastage) and better customer service .... 23

Table 7 : Reduced labor cost and reduced humans in the field ..................................... 24

Table 8 : Management systems and company’s performance ....................................... 25

Table 9 : Need for technological improvement in the respondents’ firm ...................... 26

Table 10 : Efficiency of the tools and higher customer service for the four systems .... 27

Table 11 : Reduced labor cost and necessity of humans in the field ............................. 28

Figure 1 : The flow of inventory in an organization (Prachi M, 2019) .............................. 2

Figure 2 : New management systems favor a company’s performance degree in

hierarchical order ............................................................................................................ 25

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Introduction

The first chapter of this dissertation refers to the introduction concerning a crucial

part of today’s management of organizations the inventory management.

Inventory management is one among the foremost essential business processes

throughout production as a result of it relates to purchases, sales, and supplying

activities. Inventory management alludes to all the actions included in developing and

controlling the inventory levels of raw and semi-finished materials along with completed

products. Inventories are fundamental for maintaining the flow of production, the

market movement, and, thus, the supply system (Ziukov, 2015).

Inventory management methods are vital for business operations since their

success and cost decrease requires superior supply chain performance and integration

within the business. These procedures are significant, and knowledge in them is very

alluring; therefore, managers and procurement workforce ought to be able to apply

them for the wealth of the organization(Oluwaseyi, Onifade and Odeyinka, 2017).

This study is likely to present information regarding inventory management in

real-time by employees in this field and investigate the latest inventory management

tools attached to new technology. This research will ultimately test the new

technological processes and how these inventory management techniques improve

organizational performance, optimize production, and maximize profits (Aro-gordon

and Dharmasthala Manjunatheshwara, 2016).

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Review of the Literature

The second chapter of this dissertation refers to the review of the literature

concerning inventory management.

Introduction

“Everyone agrees that effective supply‐chain management can provide a

significant source of competitive advantage. The goal of a supply chain manager must

be to link the end customers, the channels of distribution, the production processes, and

the procurement activity in such a way that customers′ service expectations are

exceeded and yet at a lower total cost than the competition. One of the enabling factors

for achieving this goal is the effective use of information technology (IT)” (Hammant,

1995). “Managers must continuously seek reliable and effective inventory practices and

systems to remain competitive” (Closs, 1989). “Literature suggests that sophisticated

and complex inventory models will drive performance; however, a combination of basic

well‐grounded inventory theory with simple management procedures carried out by

experienced staff leads to better performance” (Stanger et al., 2012). “A multi-

disciplinary approach, combining awareness of the importance of the dynamics of the

whole supply chain with proper skill and experience, leads to new thinking, enabling

staff to make better inventory decisions resulting in better performance and reduced

wastage. Managerial changes and training are critical for excellent inventory

performance” (Stanger et al., 2012).

Search Description

Based on the importance of inventory management and new techniques in the

field, the purpose of this research is to present current technological processes that

optimize traditional inventory management. Specifically, it focuses on examining how

technology improves activities such as inventory levels of raw and semi-finished

materials along with completed products. The major topics to be answered are 1. Which

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is the current technological tools in inventory management? 2. How familiar are Greek

SMEs with these inventory management processes? 3. How these processes improve

inventory management? 4. What are the main advantages that inventory management

tools offer to organizations in terms of profitability and time-saving?(Chapman, Soosay

and Kandampully, 2003).

Initially, it is crucial to specify the control systems examined in this particular

research. The next diagram shows the traditional path that firms use to produce, store,

and distribute their products.

Figure 1 : The flow of inventory in an organization (Prachi M, 2019).

This research focuses on four organizational system control techniques. These are:

enterprise resource planning systems (ERP), automated quality control systems (AQC),

supply chain planning systems (SCP), and warehouse management systems (WMS).

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Theoretical Framework

Enterprise Resource Planning (ERP) systems

The extraordinary development of data and communication advances (ICT)

motivated by microelectronics, computer equipment, and software systems have

impacted every aspect of computing applications over organizations. At the same time,

the business setting is becoming more and more complex through functional units

requiring further inter-functional information flow for decision-making, appropriate and

well-organized obtainment of item parts, inventory management, accounting, human

resources, and allocation of goods and services (Fuchs and Otto, 2014).

In this framework, organizations' management requests capable data systems to

increase competitiveness by cost decrease and better logistics. It is commonly

recognized by large and small-to-medium-size enterprises (SME) that the capability of

giving accurate information at the right moment brings huge rewards to organizations

in a universally competitive world of challenging business practices (Kumar, Maheshwari

and Kumar, 2002). During the late 1980s, new programming systems identified in the

industry as enterprise resource planning (ERP) methods have surfaced in the market,

focusing on mostly sizeable complex business organizations. These complex, high-

priced, strong, exclusive systems are off-the-shelf solutions requiring experts to adapt

and implement them based on their necessities.

In many cases, they drive companies towards re-engineering their business

processes to familiarize the software modules' logic for reformation data flow all over

the organization. Contrasting the old, traditional in-house-designed company-specific

frameworks, these software solutions are incorporated multi-module commercial

packages suitable for including “add-ons” when required (Rashid and Patrick, 2002).

The extraordinary evolution of computing capacity and the Internet brings

additional challenges on behalf of the ERP sellers and the consumers to update ERP

items, break the obstacle of proprietorship and customization, and support the

collaborative business over the intranet, extranet, and the Internet in a faultless way.

The sellers guarantee “add-on” modules, several of which are by now in the market as

an indicator of acceptance. It is a never-ending re-engineering procedure, bringing new

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goods and solutions to the ERP marketplace. ERP sellers and clients have recognized the

need for packages that pursue open architecture, provide similar modules, and permit

simple customization and user interfacing (Rashid and Patrick, 2002).

Evolution of ERP systems

The advancement of ERP frameworks firmly followed the remarkable

improvements in PC equipment and programming frameworks. During the 1960s, most

associations planned, created, and executed brought together processing frameworks,

generally robotizing their stock control frameworks utilizing stock control bundles (IC)

(Aro-gordon and Dharmasthala Manjunatheshwara, 2016).

These were legacy systems dependent on programming dialects, for instance,

COBOL, ALGOL, and FORTRAN. Material prerequisites are organizing Material Resource

Planning (MRP) systems formed in the 1970s, together with effectively organizing the

piece or parts requirements as for every great formation design. Subsequent to this

path, new programming systems called fabricating assets organizing (MRP II) were

displayed in the 1980s, underlining the reformation manufacturing process by

synchronizing the resources through creation requirements. (Olhager, 2013).

ERP systems firstly appeared in the late1980s and the start of the 1990s together

with the strength of big business wide among practical management and combination.

As of the innovative foundations of MRP and MRP II, ERP systems facilitate the business

process, including producing, circulation, bookkeeping, financial, human asset the

board, venture the executives, stock management, administration and support, and

transportation, giving availability, permeability, and steadiness over the company.

Throughout the 1990s, ERP sellers included more modules and capacities as

“additional items” to the center modules bringing forward the “expanded ERPs”. These

ERP extensions include initial arrangement and booking Advanced Planning Systems

(APS), e-business arrangements, for instance, client association the executives'

Customer Relationship Management (CRM), and kindly chain the board supply chain

management (SCM)(Rashid and Patrick, 2002).

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Automated Quality Control (AQC) systems

Quality management is pretty much all aspects of the general management

function that decide the quality approach goals and duties, and execute them by means,

for example, quality arranging, quality control, quality affirmation and quality

improvement inside the quality framework. Reliable with this added feature, quality

management is a managerial way of thinking or a methodology comprised of commonly

strengthening standards, which is upheld by a gathering of practices, devices, and

procedures for enduring viability and productivity concerning the frameworks of its

performance (Gupta and Snyder, 2009).

Evolution of AQC systems

Throughout the 1990s, Total Quality Management (TQM) got crucial in the

strategy of top management. Total Quality Management (TQM) is a moderately new

administration reasoning, which has advanced from the somewhat restricted and

unthinking methodology of Statistical Quality Control (SQC) to a more comprehensive

and human-centered methodology. The idea of TQM is a coherent advancement of the

idea of Total Quality Control (TQC). Likewise, another humanistic-situated quality

standard named the Investors in People (IIP) was propelled in 1991, in light of broadly

acknowledged standards of best preparing and advancement practices to empower

associations to improve their preparation and improve their presentation. Gradually yet

slowly, at this point, there is by all accounts more consideration given to individuals with

the framework (individuals turn), in the advancement of value venture.

In the early advancement of quality management, this phase centered on products

(i.e., how can we guarantee quality in a product?). Afterwards, in the later phase, the

focal point of quality management has moved from product to procedure (i.e., How can

we ensure quality in the process?). Subsequent from there, the focus of quality

management moving to system focus (i.e., How can we ensure quality in the system?).

Little by little but steadily, by the later stage, there appears to be more notice given to

people with the system (people spin) in quality control. Therefore, the focus in this

period was on people in an organization. Nowadays the existing development of quality

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management is centered on people with an extensive view towards networks focus (i.e.,

How can we ensure quality in people in the network environment?) and the most

current is the smart focus (i.e., How can we ensure quality in people in the smart

environment?). In this manner, we would declare that since the focus has changed, the

frameworks, instruments, and procedures as well have changed in the quality control

management ground (Gupta and Snyder, 2009).

Supply Chain Planning systems (SCP)

Inside the effective utilization of information technology (IT) in supply chain

management (SCM), enterprises can build up a competitive advantage. IT can speed up

the information flow, making the supply chain more strong and flexible without

deterioration of its efficiency. Superior Planning Systems (APS) complement Enterprise

Resource Planning (ERP) systems by giving usefulness for components of supply chain

planning (SCP).

Though ERP is already an established concept and as a result well researched, APS

is on a previous phase. Worldwide competition has motivated companies in the

direction of the restrictions of interior operations optimization (such as process

management and inventory management), and therefore, there is a necessity of starting

integrating providers and customers into the general value chain processes. By

empowering the involvement of information with supply chain accomplices, IT can form

a real-time integration of the supply chain (Fuchs and Otto, 2014).

Evolution of SCP systems

The concentration on operations planning and control has advanced over 50 years,

from individual equipment to plants throughout a supply chain. Progressively, firms

became conscious that additional factors are essential to take into reflection to reach

operational superiority, not just for interior operations but also for the supply chain

including providers and customers. Meaningfully, these factors interact with the

product, system design, and new concepts and approaches. Key issues in these zones

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assist to summarize the conversation on the development of operations planning and

control over the last five decades (Olhager, 2013).

The initial change happened around 1980 as companies started to realize that the

fundamental characteristics are progressing, which had been not enough to monitor the

limitation of the operation inside the optimization. Quality enhancements, the flow

direction of the construction processes, setup, and interval decreases helped stabilize

production and made control less complex, through rate-based methods. The second

twist happened around the turn of the century after companies saw the need integrate

providers and customers(Olhager, 2013).

Then again, the last ten years showed that the combination of supply chain

partners is not as clear as integrating “internal supply chains” in an organization. It will

probably take one more decade before supply chains are performing as interior

operations – given that it took the least amount of 20 years to go forward from the work

level to sales and operations planning. Consequently, there are still many angles of

supply chain planning that necessitate further investigation (Olhager, 2013).

Warehouse Management Systems (WMS)

As the warehouse role continues to change with the increasing demand for value-

added services and automated processing, information technology (IT) has become an

integral part of warehousing operations. Such technology includes a warehouse

management system (WMS), which has revolutionized how to schedule, plan, and fulfil

orders, track inventories, and ensure the on-time delivery of the right products. In

general, WMS is referred to as a “real-time” inventory tracking, resource management,

and communication system that links corporate level production, purchasing,

scheduling, and logistics activities through improved supply chain visibility. WMS

updates the inventory level on a real-time basis and fills customer orders in the

distribution environment by enhancing inventory visibility. The key objectives of the

WMS include:

• eliminate order fulfilment errors, by-product identification, and continuous cycle

counting.

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• send and receive critical customer/warehouse information with minimum lead

time through electronic transmission.

• maximize labor productivity by managing and prioritizing tasks.

• maximize space utilization by selecting a proper storage location.

• reduce inventory and handling requirements through a continuous flow of

information (Autry et al., 2005).

Evolution of WMS systems

Initially, WMS was a system to regulate the flow and storage of materials within a

warehouse. WMS's role is developing to including light manufacturing, transportation

management, distribution management, and complete accounting systems. In the

beginning, material requirements planning (MRP) was a system for planning stuff

requirements in an exceedingly manufacturing background. Soon MRP became

manufacturing resource planning (MRPII), which gathered the whole MRP system and

added scheduling and capacity planning philosophy.

Ultimately, MRPII resulted in enterprise resource planning (ERP), combining all the

MRPII functionality with full financial, customer, and vendor management functionality.

What is evident is that the development in functionality between Warehouse

Management Systems, Enterprise Resource Planning, Distribution Requirements

Planning, Transportation Management Systems, Supply Chain Planning, Advanced

Planning, and Scheduling, and Manufacturing Execution Systems will only increase the

extent of confusion among companies searching for software solutions for her

operations (Abuhilal, Rabadi and Sousa-Poza, 2006).

Even though WMS continues to obtain added functionality, the initial core

functionality has not changed. The first purpose of a WMS is to manage the movement

and storage of materials within an operation and process the associated transactions.

However, the fundamental logic will use a mixture of items, location, quantity, and unit

of measure, and order information to detect what sequence to perform these

operations (Miclo et al., 2019).

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Adoption of inventory management systems in Greece, UK and USA

Inventory management issues in developing countries distinct somewhat from

issues within the developed country industrial background. The reliance on imported

raw materials and parts was seen as a serious problem area from an inventory

management point of view. This task is further complicated by the governmental

restriction on imports and therefore the developing country confronts specific

bureaucratic delays. Industrialization policies adopted by developing countries create

monopoly situations and as a result, there are not any major motives to reduce

inventory costs (Goonatilake, 1990).

There were major differences between ERP adoption in Greek companies and

corporations in other countries. The adoption and implementation of new inventory

management systems were disintegrated in Greek companies. This fragmentation

showed that the inner enterprise’s culture, resources availability, skills of employees

and therefore the way ERP systems are treated within the business and the supply chain,

play critical roles in determining the success or failure of these systems adoption (Koh

et al., 2006).

A comparison of ERP adoption between the USA, UK, and Greece, showed that

many enterprises are adopting enterprise resource planning (ERP) systems for

improving information flow and order processing efficiency. Before, ERP was generally

adopted by larger enterprises. Today, small and medium-sized enterprises (SMEs) have

begun to adopt ERP systems. Companies in less well-developed economies have begun

to use ERP systems to resolve variety of their manufacturing management problems.

Greek enterprises showed some unique characteristics. Managers had limited

understanding of the strategic nature of the adoption of ERP systems and this contrasted

with the strategic approach of managers within the USA and UK. Greek managers had a

less well-developed understanding of these systems, their capabilities, and limitations.

Greek enterprises didn't have a scientific approach to adopting ERP. There was little

understanding that ERP could enable better financial and accounting operations,

improve inventory management, improve materials management, and other

production-related functions.

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To adapt the successes of ERP adoptions from the USA and UK to Greece won't be

easy. It will require careful customization of the systems and adjusting the

implementation procedures to the local culture, economic, social, and political

environments during which these enterprises operate (Koh et al., 2006).

The majority of organizations implement a top quality system for several reasons.

First, it is often seen as a method of improving internal processes and inventory or

service quality. Second, it may be driven by the adopting organization as a method to

extend home or abroad market share where quality certification contains a value. Third,

it's going to be driven by a customer request for suppliers to verify their quality

assurance systems to the customers’ internal control.

Concerning U.S. companies, one of the foremost important underlying reasons for

becoming certified was the existence of an advert relationship with European markets.

For small companies, quality certification is just a guarantee that a corporation is

employing a quality management system consistent with an inventory of requisites and

procedures.

Establishing a top quality management system by obtaining certifications in non-

profit small to medium enterprises within the UK showed that through correct

development of quality management systems organizations were ready to generate

fundamental savings and business performance enhancement. The worth of quality

management systems depends on the way they're implemented. The performance of

quality management systems can improve if companies carefully adopt the new

standard instead of incorporate it into the present quality management systems.

The evolution of the logic of audits assumes particular importance within the

context of small and medium-sized enterprises since these companies tend to

implement formal quality systems only if there's significant external pressure to try and

do so, and once they do, their approach to the implementation tends to be minimalist.

Implementations in Greece showed that the most important reason for

certification concerned the internal business environment and no particular difficulties

were observed during the quality implementation. Strong internal motivation or

willingness to enhance a company’s quality helped establish a top quality management

system that led to external benefits like the development of the company’s position

within the market (Kaziliūnas, 2010).

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The integration of supply chain processes can offer a successful revenue by which

expenses might as well be diminished and customer service levels progressed. The

method for integration, though, isn't an easy one. Organizations that intend to become

a part of an extended, an integrated supply network can yet anticipate that this could

need a framework empowering effective information flows and streamlined logistics. A

key element of this framework will be based on robust and flexible collaboration with

exchanging partners. The foremost successful of these networks are those that are able

to recognize the mix of information necessities, physical logistics and collaboration,

giving mutual benefits to a majority of associate organizations (Power, 2005).

Investment in human resources for training, implementation, and similar tasks

doesn't appear to contribute profits in terms of inventory holdings, backorder reduction,

or better customer service. These results are also encouraging to managers considering

WMS solutions, as they may indicate that the systems are easily understood, used, and

implemented, that employees require little additional advice or instruction, and no

additional investment in human capital is required to work and maintain them. The

findings indicate that the hardware/equipment and software which will be implemented

to form firms more fast and accurate not only influence internal warehouse but are also

effective in providing other benefits like heightened customer service via reduced stock-

outs and greater reliability of deliveries (Autry et al., 2005).

Survey of Related Empirical Studies

This study, “Enterprise resource planning systems adoption process: a survey of

Canadian organizations”, investigates critical enterprise resource planning (ERP)

adoption issues such as adoption motivations, justification, risks and criteria for a

selection of product vendor and implementation partners. The innovation process study

approach is taken and data are collected through a questionnaire and by structured

interviews. The study identifies many critical concerns in the organizational innovation

process of ERP adoption (Kumar, Maheshwari and Kumar, 2002).

The second study, “Adopting new technologies for supply chain management”,

develops a model of the key factors influencing the adoption of supply chain technology.

The following set of variables were hypothesized to have a significant impact upon the

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pace of technology adoption: firm size, organizational structure, integration of supply

chain strategy with overall corporate strategy, past financial performance, supply chain

partner pressure, transaction climate and environmental uncertainty. The model

provides a better understanding of the supply chain technology diffusion process. The

paper also includes a survey, which has been developed to test the model (Patterson,

Grimm and Corsi, 2003).

The third study, “Smart solutions for RFID based inventory management systems:

a survey”, is a survey of the latest technologies, algorithms and state of the art

localization techniques that can be used to serve as Internet of Things communication

protocol by automating an RFID system. In this paper, a survey of the state-of-the-art

technologies, algorithms, and techniques used in smart Radio Frequency Identification

systems based inventory systems is presented. First the design challenges for RFID-

based inventory management systems are outlined followed by a comprehensive survey

of various RFID technologies, RFID types, and RFID architectures (Alwadi et al., 2017).

In the fourth study, “Innovation in logistic services and the new business model A

conceptual framework”, through an extensive literature review, the paper examines the

factors that nurture innovation in logistics services, identifies the contributions of the

new “resources” and, using industry examples, examines the application of these

resources to logistics firms as they assume an extended role within the new business

model (Chapman, Soosay and Kandampully, 2003).

The fifth study, “Assessing the effects of operational processes and information

systems on inventory performance”, develops a structural equation model that

evaluates the impact of enterprise-wide information systems, along with four

operational processes, on inventory performance. The results indicate that the use of

operational processes, especially just-in-time (JIT), rather than the use of enterprise-

wide information systems, leads to improved performance as measured by inventory

speculation, lead times, and turnover ratios (Rabinovich, et al., 2002).

The sixth study, “Operations management and advanced manufacturing

technologies in SMEs”, explored the increased requirements for competitiveness,

innovation, quality, flexibility and information processing capability which led a number

of small and medium-sized enterprises (SMEs) to implement advanced manufacturing

technologies (AMT). Using a contingency theory perspective, a survey study of 118

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Canadian manufacturers was made to determine the performance outcomes of the “fit”

or alignment between the critical success factors (CSFs) of operations management in

SMEs and their level of proficiency in the use of AMT (Raymond, 2004).

The last study, “Moving Procurement Systems to the Internet: the Adoption and

Use of E-Procurement Technology Models”, reports the results of a research project

addressing the current state of e-procurement technologies. The results indicate that

the final equilibrium may include several technologies, each one serving a different

segment of the market. This multiplicity of solutions is likely to further delay the

transition of the industry to its growth stage (Davila, Gupta and Palmer, 2003).

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Methodology

The third chapter of this dissertation refers to the methodology adopted in order

to conduct a research concerning the four basic systems of inventory management

mentioned in the previous chapter.

Objective and research questions

Through this research it is attempted to explore the perceptions and opinions of

people working in companies that are using inventory management tools such as ERP,

AQC, SCP and WMS concerning the time saving , the simplicity of some operations using

an appropriate software and the profitability growth of the company (Panayides, 2004).

In particular, the research questions that should be answered through this assignment

are the following: 1. Which is the current technological tools in inventory management?

2. How familiar are Greek SMEs with these inventory management processes? 3. How

these processes improve inventory management? 4. What are the main advantages that

inventory management tools offer to organizations in terms of profitability and time-

saving?

Research tool used in the survey

To obtain the required primary data to be able to provide answers to the above

research questions, a quantitative survey was carried out, which is, in fact, a highly

popular data collection tool within the context of investigating the attitudes and

perceptions held by a social group. The content validity was assessed and the

questionnaire was modified to measure the presence of inventory management in

today’s working environment. The survey included seven sections. A five-point scale

that ranged from “not at all” = 1 to “to a great extend” = 5 to was used to value the

views of people working in the field about these inventory management techniques, to

determine the importance of inventory management tools in a company’s financial

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performance and the fear of advanced technology undermining human presence in the

working environment. The researcher constructed the questionnaire in such a way that

answering the initial research questions is ensured.

In the first section of the questionnaire, an investigation takes place on the

participants' demographic characteristics, like gender, age, educational background,

and occupation. It should be reported that data collection was conducted in step with

the principles of research ethics, which implies that no personal data were requested

from the participants who provide their identification details similarly as that none of

the participants was forced to require part within the survey against their will.

The second part of the questionnaire examines how the four inventory

management tools are used and the extent to which Greek employees use them. In

particular, the first question examines at what extend these four inventory systems are

used in a specific company, while the second one examines in what particular

organizational functions the systems are used. The questions were inspired by the fact

that the focus of operations planning and control for manufacturing firms has expanded.

New principles, techniques, and systems have emerged that have allowed for new

approaches. The perspective for planning and control has expanded from internal

production operations to supply chain operations linking suppliers, manufacturers, and

customers (Olhager, 2013).

The third category of questions examines how these inventory management

systems replaced traditional techniques, how often and which system is more likely to

be updated. More specifically, the two questions are meant to study the evolution of

these managerial tools and how they replaced automated processes over time

(Patterson, Grimm and Corsi, 2003).

The fourth section consists of three questions which examine the influence of

inventory management systems on time-saving, cost savings and overall customer

service performance. It is after all the main reason that companies are willing to pay

tremendous amounts of money in order to buy and implement these tools (Patterson,

Grimm and Corsi, 2003).

The following three questions from the fifth section examine the performance of

a company that has adopted new inventory management techniques and points out the

alteration of some factors that result in an increased profitability (Jones and Riley, 1984).

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Also, there are two questions from section six concerning the beliefs of person working

in these fields concerning their beliefs about the replacement of human by developed

IT systems.

Finally, section seven is consisted of two questions based on bibliography and

investigates the potential use of one of these systems in a frame of one year from now

and in what specific department there is a need for improvement. The first question is

based on the fact that new companies in Greece are now trying to develop these

systems that so far are not so widely used (Kumar, Maheshwari and Kumar, 2002).

As a bit of ultimate information, a pilot study was conducted before the

questionnaires were provided to the final study sample, involving four respondents. The

aim of this pilot study was to secure that questions are well understood. Small changes

in some questions were suggested and adopted. After concluding that the questionnaire

is ready, it was provided to the whole sample. The questionnaire of this study was

completed by 71 respondents using the non-probability sampling.

In this particular sampling method, the samples were selected based purely on the

researcher’s knowledge and credibility. Analytically, the researcher chooses only those

people who are appropriate to participate in the research study. Thus, the respondents

were people who, most of them, are known to work in Greek SMES as well as in

multinational companies in the UK.

Validity and reliability

The questionnaire was pretested on 4 individuals and was revised on the basis of

their feedback. It was then sent via e-mail to the rest of the respondents. A total of 100

questionnaires should be promoted, and 71 of them were actually completed (response

rate 71%).

The attitude data were first tested for reliability using Cronbach’s alpha to assess

data reliability. The results are shown in Table 1. As most research method guides treat

a value higher than 0.7 as acceptable, the values in the table indicate that the data

collected from the survey are reliable and suitable for further analysis.

17

Questionnaire section Number of questions Cronbach a

1. Usage of the 4

managerial tools in the

appropriate functions

(Questions 5,6)

2 0.87

2. Time and cost saving

using inventory

management systems

(Questions 9,10,14)

3 0.95

3. Efficiency and cost

effectiveness

(Questions 11,12,13)

3 0.93

4. Replacement of humans

by IT

(Questions 15,16)

2 0.84

Overall 10 0.97

Table 1 : Questionnaire Reliability

Data analysis

Data were analyzed with the use of the statistical package SPSS. Data were first

collected and registered and then presented in the next chapter with the use descriptive

statistical methods (mean and standard deviation). In addition, inferential statistics

were used in order to compare some of the demographics with the acquired knowledge

from our data. Based on that knowledge, the appropriate statistical method was

applied, the Pearson’s correlation coefficient.

18

Results

The first part of this statistical study helps us to clarify the nature of the basic

demographic characteristics of respondents taking part in it. Thus, as regards

consumers’ demographic profile, the 62% of the study sample consists of men and the

38% of women, while the 9.9% of the respondents are between 18 to 25 years old, 66.2%

are 26 to 33, 16.9% are 34 to 41 and 7% are over 41 years old. As regards their

educational status, 1.4% of the respondents have primary education, 28.2% have a

bachelor degree, 64.8% have a master and 5.6% hold a PhD title. The study sample

consists of 66.2% employees, 25.4% managers, 4.2% CEO, while the 4.2% of the

respondents are students.

Ν %

1.Gender Male 44 62%

Female 27 38%

2.Age

18-25 7 9.9%

26-33 47 66.2%

34-41 12 16.9%

41> 5 7%

3.Level of education

Primary school 1 1.4%

Bachelor 20 28.2%

Master 46 64.8%

PhD 4 5.6%

4.Occupation

Employee 47 66.2%

Manager 18 25.4%

CEO 3 4.2%

Student 3 4.2%

Table 2 : Demographics

Considering the degree that the respondents use the inventory management

tools, this can be characterized as medium, as the mean score of the corresponding

factor is equal to 2.73 (SD = 1.40). These people show a medium level of knowledge of

inventory management and how such tools can be used in the appropriate

organizational functions.

19

Statement

1

(not at

all)

2 3 4

5

(to a

great

extend)

Mean SD

5.The following inventory management systems are used regularly in your working environment

ERP 13

(18.3%)

12

(16.9%)

15

(21.1%)

13

(18.3%)

18

(25.4%) 3.15 1.45

AQC 23

(32.4%)

18

(25.4%)

16

(22.5%)

10

(14.1%)

4

(5.6%) 2.35 1.23

SCP 27 (38%) 13

(18.3%)

10

(14.1%)

12

(16.9%)

9

(12.7%) 2.48 1.46

WMS 27 (38%) 15

(21.1%)

10

(14.1%)

10

(14.1%)

9

(12.7%) 2.42 1.44

6.The following organizational functions are using the appropriate inventory management

systems from the previous list

Warehousing 19

(26.8%) 22 (31%)

9

(12.7%)

10

(14.1%)

11

(15.5%) 2.61 1.42

Manufacturing/operations 16

(22.5%)

10

(14.1%)

16

(22.5%)

20

(28.2%)

9

(12.7%) 2.94 1.36

Accounting 12

(16.9%)

12

(16.9%)

17

(23.9%)

15

(21.1%)

15

(21.1%) 3.13 1.38

Order management 17

(23.9%)

16

(22.5%)

15

(21.1%)

10

(14.1%)

13

(18.3%) 2.80 1.43

Extend of usage of the 4 inventory management tools 2.73 1.40

Table 3 : Extend of usage of inventory management tools

In the third section of questions it is obvious by the results that 38% of the

respondents believe that only a percentage between 31 and 50% there have been a

replacement of the traditional techniques of inventory management with new ones.

Another 29.6%, the second bigger percentage, thinks that a 51 to 70% the traditional

techniques have indeed been replaced by the new managerial tools. As for the second

question of the section the most recent update there is a 36.6% that thinks that the

update has been made in the ERP system and another 26.8% believes that the update is

nowhere mentioned which actually means that no update has been made to these

inventory management tools.

20

Statement N %

7.To what extend inventory management systems been incorporated (replacing manual transactions with

automated processes) within the previous functions

0-30% 14 19.7%

31-50% 27 38%

51-70% 21 29.6%

71-100% 9 12.7%

8.The most recent update in the inventory management hardware/software was in

Enterprise Resource Planning (ERP)system 26 36.6%

Automated Quality Control (AQC)system 8 11.3%

Supply Chain Planning (SCP) system 13 18.3%

Warehouse Management system (WMS) 5 7%

Nowhere mentioned 19 26.8%

Table 4 : Evolution of the four managerial tools

Taking into consideration the belief of the respondents about how these

managerial tools are time and cost effective as well as the efficiency of them, this can

be characterized as quite low, compared to the previous section, as the mean score of

the corresponding factor is equal to 3.09 (SD = 1.39). Most of the correspondents seem

to do not find a certain relationship between time, cost and efficiency that these

inventory management tools offer to firms in general.

21

Statement

1

(not at

all)

2 3 4

5

(to a

great

extend)

Mean SD

9. In these departments, how time-saving is the use of appropriate software?

Warehousing 18

(25.4%)

11

(15.5%)

13

(18.3%)

13

(18.3%)

16

(22.5%) 2.97 1.51

Manufacturing/Operations 14

(19.7%)

12

(16.9%)

15

(21.1%)

21

(29.6%)

9

(12.7%) 2.99 1.34

Accounting 11

(15.5%)

8

(11.2%)

18

(25.4%)

21

(29.6%)

13

(18.3%) 3.24 1.31

Order management 13

(18.4%)

12

(16.9%)

15

(21.1%)

15

(21.1%)

16

(22.5%) 3.13 1.42

10. To what extend the use of inventory management systems resulted in cost savings in each of

the following departments?

Warehousing 16

(22.9%)

17

(24.4%)

10

(14.3%)

11

(15.7%)

16

(22.9%) 2.91 1.50

Manufacturing/operations 14 (20%) 9

(12.9%)

15

(21.4%)

23

(32.8%)

9

(12.9%) 3.06 1.34

Accounting 12

(17.7%)

7

(10.3%)

17

(24.9%)

20

(29.4%)

12

(17.7%) 3.19 1.34

Order management 15

(22.1%)

7

(10.3%)

19

(27.9%)

18

(26.5%)

9

(13.2%) 2.99 1.34

11. Are these inventory management tools providing efficiency and an overall better service level?

ERP 6

(9%)

9

(13.4%)

15

(22.4%)

16

(23.9%)

21

(31.3%) 3.55 1.31

AQC 14

(20.9%)

13

(19.4%)

15

(22.4%)

13

(19.4%)

12

(17.9%) 2.94 1.40

SCP 11

(16.7%)

12

(18.2%)

15

(22.7%)

16

(24.2%)

12

(18.2%) 3.09 1.36

WMS 17

(24.6%)

10

(14.6%)

16

(23.2%)

11

(15.9%)

15

(21.7%) 2.96 1.48

Time saving, cost saving and efficiency 3.09 1.39

Table 5 : Time saving, cost saving and efficiency

Considering the statement that inventory management tools operate in favor of

better management of inventories avoiding material wastage, thus lowering the cost

22

and ultimately helping improving the customer service the responses gave a mean 3.03

while the SD is equal to 1.38. Again these people show a medium level of knowledge of

inventory management and how its functions and tools help firms improve their

inventories.

23

Statement

1

(not at

all)

2 3 4

5

(to a

great

extend)

Mean SD

12. The presence of an inventory management culture is thought to prevent material wastage and

increase cost-effectiveness

ERP 5

(7.1%)

17

(24.3%)

20

(28.6%)

13

(18.6%)

15

(21.4%) 3.23 1.24

AQC 13

(18.8%)

14

(20.3%)

16

(23.2%)

12

(17.4%)

14

(20.3%) 3.00 1.40

SCP 11

(15.9%)

12

(17.4%)

10

(14.4%)

20

(29%)

16

(23.2%) 3.26 1.41

WMS 14

(20%)

13

(18.6%)

11

(15.7%)

11

(15.7%)

21

(30%) 3.17 1.53

13. By using inventory management techniques do you notice a higher customer service?

ERP 7

(10.3%)

11

(16.2%)

15

(22.1%)

17

(25%)

18

(26.5%) 3.41 1.32

AQC 16

(23.6%)

13

(19.1%)

18

(26.5%)

10

(14.7%)

11

(16.2%) 2.81 1.39

SCP 14

(20.3%)

12

(17.4%)

11

(15.9%)

19

(27.5%)

13

(18.8%) 3.07 1.43

WMS 19

(28.4%)

8

(11.9%)

14

(20.9%)

13

(19.4%)

13

(19.4%) 2.90 1.50

14. By using inventory management techniques do you notice lower warehousing cost and

reduced inventories?

ERP 8

(11.8%)

16

(23.5%)

18

(26.5%)

18

(26.5%)

8

(11.8%) 3.03 1.21

AQC 16

(23.9%)

17

(25.4%)

17

(25.4%)

13

(19.4%)

4

(6%) 2.58 1.22

SCP 15

(23.4%)

10

(15.6%)

14

(21.9%)

12

(18.8%)

13

(20.3%) 2.97 1.46

WMS 15

(22.7%)

9

(13.6%)

19

(28.8%)

10

(15.2%)

13

(19.7%) 2.95 1.42

Lower warehousing cost (material wastage) and better customer service 3.03 1.38

Table 6 : Lower warehousing cost (material wastage) and better customer service

24

Most respondents seem to believe that inventory management indeed reduces

labor cost and in the future will reduce the presence of humans in the field. With a mean

of 3.15 and an SD of 1.28 it is assumed that in the years to come IT will undermine the

position of some employees in the warehouses so there is a great need of alteration in

the tasks that an employee performs in a place such as a warehouse were inventories

are stored.

Statement

1

(not at

all)

2 3 4

5

(to a

great

extend)

Mean SD

15. By using inventory management techniques do you notice a reduced labor cost?

ERP 7

(10.3%)

14

(20.6%)

25

(36.8%)

16

(23.5%) 6 (8.8%) 3.00 1.11

AQC 12

(17.7%)

16

(23.5%)

23

(33.8%)

11

(16.2%)

6

(8.8%) 2.75 1.19

SCP 15

(22.4%)

9

(13.4%)

15

(22.4%)

20

(29.9%)

8

(11.9%) 2.96 1.35

WMS 14

(20.9%)

13

(19.4%)

12

(17.9%)

15

(22.4%)

13

(19.4%) 3.00 1.44

16. Do you believe that advanced IT systems for inventory management in the future will reduce

the necessity of humans in the field?

ERP 3

(4.2%)

15

(21.4%)

28

(40%)

8

(11.4%)

16

(22.9%) 3.27 1.17

AQC 10

(14.5%)

8

(11.6%)

24

(34.8%)

9

(13%)

18

(26%) 3.25 1.36

SCP 5

(7.5%)

13

(19.4%)

19

(28.4%)

9

(13.4%)

21

(31.3%) 3.42 1.32

WMS 6

(8.8%)

10

(14.7%)

15

(22%)

16

(23.5%)

21

(30.9%) 3.53 1.31

Reduced labor cost and reduced humans in the field 3.15 1.28

Table 7 : Reduced labor cost and reduced humans in the field

Most of the respondents in the last section of the questionnaire regarding a firm’s

performance when there is a use of inventory management tools have quite

differentiated opinions concerning the particular tools and that can be interpreted as an

overall need of presence of a strong IT department in firms which should improve

25

constantly these managerial tools. The mean is 3.61 and the SD 1.25. As for the last

question the most respondents believe that quality systems (29.4%) need the most an

improvement as well as the ERPs (25%). Definitely quality systems especially in cases of

industry play crucial role in the correct storage and control of inventories. ERPs are vital

for all companies and will be in the future a necessity.

Statement

1

(not at

all)

2 3 4

5

(to a

great

extend)

Mean SD

17. Do you believe that new management systems favor a company's performance?

ERP 4

(5.8%)

5

(7.3%)

20

(29%)

14

(20.3%)

26

(37.7%) 3.77 1.20

AQC 8

(11.6%)

4

(5.8%)

22

(31.9%)

17

(24.6%)

18

(26.1%) 3.48 1.27

SCP 5

(7.4%)

6

(8.8%)

16

(23.5%)

21

(30.9%)

20

(29.4%) 3.66 1.21

WMS 7

(10%)

8

(11.4%)

19

(27.1%)

14

(20%)

22

(31.4%) 3.51 1.32

Management systems and company’s performance 3.61 1.25

Table 8 : Management systems and company’s performance

Figure 2 : New management systems favor a company’s performance degree in

hierarchical order

26

Statement N %

18. Which of the following inventory management systems are in need of technological

improvement in your firm?

ERP 17 25%

AQC 20 29.4%

SCP 8 11.8%

WMS 10 14.7%

Nowhere mentioned 13 19.1%

Table 9 : Need for technological improvement in the respondents’ firm

Subsequently, a correlation analysis is performed, by using the Pearson’s r

parametric linear correlation coefficient. The kind of relationship between two

variables by means of correlation is examined on the basis on the sign (positive or

negative) and if it is weak (correlation coefficient 0-0.3), moderate (correlation

coefficient 0.3 – 0.5) strong (correlation coefficient 0.5 to 0.8) or very strong (correlation

coefficient 0.8 and above). Initially, a positive, strong and statistically significant

correlation between efficiency of the tools and higher customer service for the four

systems ERP (r = 0.674, p < 0.001), AQC (r = 0.778, p < 0.001), SCP (r = 0.644, p < 0.001)

a n d WMS (r = 0.780, p < 0.001) is observed. Thus, the greater the efficiency of the

tools the more improved is the overall customer service. Also, a positive, statistically

significant but moderate correlation relationship between reduced labor cost and

necessity of humans in the field ERP (r = 0.398, p < 0.001), AQC (r = 0.390, p < 0.001),

SCP (r = 0.479, p < 0.001) a n d WMS (r = 0.377, p < 0.001) is observed.

27

CORRELATION

Are these inventory

management tools

providing efficiency

and an overall better

service level? (ERP)

Are these inventory

management tools

providing efficiency

and an overall better

service level? (AQC)

Are these inventory

management tools

providing efficiency

and an overall better

service level? (SCP)

Are these inventory

management tools

providing efficiency

and an overall better

service level? (WMS)

By using inventory

management

techniques do you

notice a higher

customer service?

(ERP)

r=0.674

p=0.000

By using inventory

management

techniques do you

notice a higher

customer service?

(AQC)

r=0.778

p=0.000

By using inventory

management

techniques do you

notice a higher

customer service?

(SCP)

r=0.644

p=0.000

By using inventory

management

techniques do you

notice a higher

customer service?

(WMS)

r=0.780

p=0.000

Table 10 : Efficiency of the tools and higher customer service for the four systems

28

CORRELATION

By using inventory

management

techniques do you

notice a reduced

labor cost? (ERP)

By using inventory

management

techniques do you

notice a reduced

labor cost? (AQC)

By using inventory

management

techniques do you

notice a reduced

labor cost? (SCP)

By using inventory

management

techniques do you

notice a reduced

labor cost? (WMS)

Do you believe that

advanced IT systems

for inventory

management in the

future will reduce the

necessity of humans

in the field? (ERP)

r=0.398

p=0.000

Do you believe that

advanced IT systems

for inventory

management in the

future will reduce the

necessity of humans

in the field? (AQC)

r=0.390

p=0.000

Do you believe that

advanced IT systems

for inventory

management in the

future will reduce the

necessity of humans

in the field? (SCP)

r=0.479

p=0.000

Do you believe that

advanced IT systems

for inventory

management in the

future will reduce the

necessity of humans

in the field? (WMS)

r=0.377

p=0.000

Table 11 : Reduced labor cost and necessity of humans in the field

29

Conclusions

This document was an effort to examine whether four fundamental inventory

management instruments are a key subject of concern in today’s company

management. The results of the study based on associated literature point out that a

suitable inventory control system is closely linked with low storage costs, cost-

reduction, and timely delivery of necessary goods, products, materials, and services to

customers in order to upgrade continued profitability, competitive power, and market

diversification prediction. In the current situation of strong competition and income

pressure, the organization does not have any other alternative than to manage

resources more effectively to survive and to stay economically alive. The adoption of a

suitable combination of some of these approaches can advance service delivery and

minimize the orderly carrying/handling expenses (Aro-gordon and Dharmasthala

Manjunatheshwara, 2016).

After getting some demographic information about the respondents, gender,

age, educational status and occupation the questionnaire was separated in seven

sections. The first section included questions about how often these people use these

four managerial tools in their firms. The results that derived were that not a great deal

of people was familiar with them. This result was quite rational, taking into

consideration that in Greece industries and big companies are few and they are

struggling to survive, as a consequence of higher interest rates which result in costlier

inventory levels, as in 2001 that they could not be absorbed due to the recession of the

Greek economy in that year (Koumanakos, 2008). There is a lack of means, lack of well

trained staff and a big competition with foreign firms which import similar goods.

In the third section of questions respondents had to decide at what percentage

traditional techniques of inventory management have been replaced with new

managerial tools. The results show that 38% of the respondents believe that only a

percentage between 31 and 50% there have been a replacement of the traditional

techniques of inventory management with new ones. The range of the percentage is

below 50% which indeed justifies the statement of the previous paragraph. As for the

second question of the section the most recent update there is a 36.6% that thinks that

30

the update has been made in the ERP system and another 26.8% believes that the

update is nowhere mentioned which actually means that no update has been made to

these inventory management tools. As it is also referred in the literature the ERP system

is the most used inventory management tool in the Greek SME’s (Koh et al., 2006).

The next section was created in order to investigate where these tools are actually

used how they are time and cost effective as well as efficient. Most of the

correspondents seem to do not find a certain relationship between time, cost and

efficiency that these inventory management tools offer to firms in general. If the result

is interpreted, it is obvious that respondents are not familiar with these tools and that

is why they cannot understand completely what difference would make the presence of

inventory management in certain departments of a company. Not only inventory

management is cost and time effective but also it offers a unique way of dealing with

everyday difficulties in the company. All employees follow the same protocols when it

comes to production, storage and customer service (Orobia et al., 2020).

Inventory management includes determining the accurate amounts to order and

to maintain at a given time because of the related expenses. Holding too much inventory

increases tied-up capital which results in deterioration, out of date quality, damage, and

loss of inventory through pilferage and burglary. On the other hand, the lack of inventory

is connected with a pause in sales due to stock-outs, inferior consumer relationships,

and underutilized machinery and equipment. This is merely not possible if the individual

involved possessing the knowledge, skills, and abilities essential in planning, monitoring,

and controlling inventory level. Therefore, when small business managers have the main

knowledge of inventory management procedures, skills, and abilities to apply the

strategies, this will enhance the way they manage their inventory, which, in a twist, will

improve their business sales and prosperity (Orobia et al., 2020).

Considering the statement of the following section that inventory management

tools operate in favor of better inventory management, avoiding material wastage, thus

lowering the cost and ultimately helping improving the customer service, the responses

were characterized as of medium knowledge. Again respondents show a low level of

understanding how inventory management and its functions and tools help firms

improve their inventories.

31

Most respondents seem to believe that inventory management indeed reduces

labor cost and in the future will reduce the presence of humans in the field. It is clearly

assumed that in the years to come IT will undermine the position of some employees in

the warehouses so there is a great need of alteration in the tasks that an employee

performs in a place such as a warehouse were inventories are stored. Humans will be

needed in the future but in a different organizational form. It departments will indeed

be strong but the human brain is crucial when it comes to decisions, inventiveness and

initiatives.

The past 20 years have been stamped by fast technological expansion, such as the

internet, GPS, radio-frequency recognition, smartphones, automation (robots and

drones), big data, and artificial intelligence (AI). Individuals have also experienced

phenomenal levels of collaboration and globalization. While companies have situated or

outsourced their operations to take benefit of cheap and skilled labor, plant capacity,

design, and engineering expertise, and closeness to significant material and

components, supply chains have turned out to be ever more decentralized and reach

out around the world. As a result, further issues and challenges have arisen, and the

research community has reacted with new hypotheses and instruments to comprehend

and direct training.

Abundant and ubiquitous computing power at repeatedly inferior cost has

empowered technological advancements such as the internet, GPS, remote

communication, the IoT, robotics, and additive manufacturing (AM). These headways

have given elevation to new business models that are continuing to essentially change

production processes and supply chain arrangements. Worldwide information

accessibility on the superior performance given by top competitors similar to Amazon is

raising customer desires of ever-faster reply times and more choices if at all possible at

a similar price.

Continuing globalization, in that case, can lead to enlarged competition and cost

pressure. Subsequent to the grow of Brazil, Russia, India, China, and some other

countries in the past years, numerous countries may enter the global markets. At the

same time, individuals on different continents could begin to realize that we must be

careful with our planet and its natural resources, which may be accompanied by bigger

32

attention toward sustainability and greenhouse gas emissions. At last, we look ahead to

the current political instabilities to reoccur in the future so that supply chains will

continue to face risks due to closed borders, changes in trade agreements, and

international labor regulations (Song, van Houtum and Van Mieghem, 2020).

In the last section of the questionnaire regarding a firm’s performance when there

is a use of inventory management tools respondents have quite differentiated opinions

concerning the particular tools and that can be interpreted as an overall need of

presence of a strong IT department in firms which should improve constantly these

managerial tools. Industry all over the world is changing fast and moving forward so

sooner or later the Greek market will have to follow and adjust in order to remain

competitive. As for the last question the most respondents believe that quality systems

(29.4%) need the most an improvement as well as the ERPs (25%). Definitely quality

systems especially in cases of industry play crucial role in the correct storage and control

of inventories. ERPs are vital for all companies and will be in the future a necessity.

To conclude with, it was quite necessary to create a correlation between the

examined factors and especially customer service and reduced necessity of humans in

the field. The correlation was very strong between the four different managerial tools

and this assures the above claims.

Greek companies overall need to reevaluate the full extent of their functions,

systems, and processes in the whole supply chain. They must aim to synchronize

activities among the partners in the network with the aim of gaining and integrating

knowledge. Application of new technologies, particularly in inventories, must be

synchronized across the network to improve management processes and provide

efficiency and productivity across the length of the supply chain. Only then can firms be

successful in taking advantage of their innovative efforts and stay ahead in the turbulent

global economy (Chapman, Soosay and Kandampully, 2003).

33

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36

Appendix

This questionnaire aims to investigate your experience with inventory management

techniques in your company. This survey is purely conducted for academic purposes.

Responses will be kept strictly confidential and you are not requested to display anywhere

your name or other personal information, as this survey is anonymous.

Inventory management questionnaire

New inventory management technology systems

Terms & Definition Enterprise Resource Planning (ERP) systems: ERP offers a centralized system to control information flow through a

manufacturing environment. ERP covers functions such as capacity planning, cost and accounting, order entry,

production management, inventory, and finance. Examples: SAP, Oracle, JD Edwards, PeopleSoft

Automated Quality Control (AQC) systems: AQC Systems help monitor the quality assurance process, inspection

procedures, specifications, and gauge calibration statistics. Examples: Power Way, Pilgrim Software

Supply Chain Planning (SCP) systems: SCP systems, such as supply and forecasting planning, demand planning, and

advance planning and scheduling (APS), are applications that coordinate limited material and capacity resources in

accordance with business dynamic changes. These systems deal with strategic and tactical planning issues that

generally have long time spans. Examples: i2, Manugistics, Logility

Warehouse Management (WMS) Systems: WMS track and control the movement of inventory through the

warehouse, from receiving to shipping. WMS manages the utilization of resources such as space and personnel. It also

offers systematic management of material handling to optimize and shorten fulfillment cycle time reducing cost.

Examples: Catalyst, EXE, Manhattan, Optum

1. What is your gender?

Male

Female

37

2. What is your age?

18-25

26-33

34-41

41>

3. What is your educational status?

Primary education

Bachelor

Master

PhD

4. What is your occupation?

Employee

Manager

CEO

Student

38

5. The following inventory management systems are used regularly in your working

environment

6. The following organizational functions are using the appropriate inventory

management systems from the previous list

39

7. To what extend inventory management systems been incorporated (replacing manual

transactions with automated processes) within the previous functions:

0-30%

31-50%

51-70%

71-100%

8. The most recent update in the inventory management software was in:

Enterprise Resource Planning (ERP) system

Automated Quality Control (AQC) system

Supply Chain Planning (SCP) system

Warehouse Management system (WMS)

Nowhere mentioned

9. In these departments, how time-saving is the use of appropriate software?

40

10. To what extend the use of inventory management systems resulted in cost savings in

each of the following departments?

11. Are these inventory management tools providing efficiency and an overall better

service level?

41

12. The presence of an inventory management culture is thought to prevent material

wastage and increase cost-effectiveness.

13. By using inventory management techniques do you notice a higher customer service?

42

14. By using inventory management techniques do you notice lower warehousing cost

and reduced inventories?

15. By using inventory management techniques do you notice a reduced labor cost?

43

16. Do you believe that advanced IT systems for inventory management in the future will

reduce the necessity of humans in the field?

17. Do you believe that new management systems favor a company's performance?

44

18. Which of the following inventory management systems are in need of technological

improvement in your firm?

Enterprise Resource Planning (ERP) system

Automated Quality Control (AQC) system

Supply Chain Planning (SCP) system

Warehouse Management system (WMS)

Nowhere mentioned