Improving Inventory Management in Small Business : A Case Study

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 con-sidering 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 opera-tions. Secondary data is retrieved from the information system to provide the annual pur-chasing 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 col-lected data and establish a formal inventory control system as the solution to improve the company’s inventory management