Inefficient Analysis Inventory Management: Case Study in a SME Company
Sri Susilawati Islam (a*), Andrey Hasiholan Pulungan (b), Abdul Rochim (c)
a) Industrial Engineering Program Study, Sampoerna University, Jl. Raya Pasar Minggu No.Kav. 16, Jakarta 12780, Indonesia
*sri.islam[at]sampoernauniversity.ac.id
b) Accounting Program Study, Sampoerna University, Jl. Raya Pasar Minggu No.Kav. 16, Jakarta 12780, Indonesia
c) Industrial Engineering Program Study, Borobudur University, Jl. Raya Kalimalang No.1, Jakarta 031018, Indonesia
Abstract
The research aims to examine factors that may cause inventory mismanagement in a Small Medium Enterprises (SME), which is a market leader in the Heavy Equipment after sales business, is selected. The company is selected because despite its status as market leader, the company deals with various inventory problems, for examples slow moving stocks, delivery delays to customers, etc. Those problems, at the end, may reduce companys profit. In order to determine the main causes, this study applies quantitative and qualitative methods. Quantitative method, specifically Pareto diagram and Inventory Turnover Ratio (ITR) is mainly used to evaluate sales and inventory management. ITR is affected by spare part quantity, warehouse area used, and the material amount. The top five ITR ratings are examined further through observation, interview, and questionnaire techniques. Meanwhile, the qualitative method is applied to evaluate the companys inventory information systems, procedures and coordinations among departments, and human resources. Our findings suggest that the unintegrated companys information system and lack of qualified human resources are the main factors affect inefficient inventory management. The research benefits to industry by suggesting the importance of information systems and human resources to inventory management. As for academics, this research enriches inventory management literature.
Keywords: Inventory Management, Small Medium Enterprise, Inventory Turnover Ratio
Topic: Industry Engineering