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Improving Inventory Management in Small Business: A Case Study (Management Project)

Introduction:
The growth of small business is fast and their impact on the economy is becoming bigger. How to manage the inventory effectively and efficiently often is a challenge for these small businesses.

The study took place at HEM-SOL FORSALJNINGS AB, a company involved in gym sports equipment wholesale. For HEM-SOL two inventory problems, stock-out and overstock occur frequently. The company wants to improve its efficiency and is considering a change in the inventory management.

Purpose:
The purpose of this study is to investigate the reasons behind the inventory management inefficiency in HEM-SOL, and then the proposed managerial suggestions will be presented to deal with the issues.

Method:
The study is considered as qualitative single-case study. Data collection is mainly through the interviews with the top manager and other staff involved in inventory control operations. Secondary data is retrieved from the information system to provide the annual purchasing and sales report about twenty items using a purposive sampling approach. Data analysis follows the theoretical framework.

Conclusion:
Small businesses have limited financial resources and bargaining power. Long-distance suppliers, big fluctuation of demand and lack of formalized inventory control system result in HEM-SOL bad performance on inventory management. The authors analyze the collected data and establish a formal inventory control system as the solution to improve the company’s inventory management.
Source: Jönköping University
Authors: Bai, Lining | Zhong, Ying

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