Project The Effect of Information Technology On Inventory Management
Project The Effect of Information Technology On Inventory Management
1*ORCID: https://orcid.org/0009-0001-4782-4125
Abstract
The purpose of this study was to determine how ICT affected inventory control at Anaji Choice Mart
in Takoradi. The study specifically aims to determine the extent of IT system usage in inventory
management in supermarkets at Anaji Choice Mart, Takoradi, as well as to establish the
advantages of IT usage on inventory management at the Mart and to identify the difficulties
associated with using IT in inventory management there. The entire staff population of 150 was
sampled for this study using a non-probability sampling technique called purposive sampling.
Descriptive statistics, such as frequencies and percentages, were used to analyse the data and
explain the variable characteristics. According to the study's findings, Anaji Choice Mart's inventory
management system uses information technology to determine order quantity, forecast demand,
stock valuation and accounting, stock keeping units, and just-in-time (JIT) systems. Additionally,
it was learned from the respondents that ICT has an impact on the Mart's inventory management
performance, and it was also revealed from the respondents that there are challenges.
Citation: Dadzie., E., B., Yornu., I., Yamoah., E., L., (2025), “Information and Communication
Technology's Effect on Inventory Management”, African Journal of Procurement, Logistics & Supply
Chain Management Society 2025, 8(01): 59-73, DOI: https://dx.doi.org/10.4314/ajplscm.v8i1.4
1.0 INTRODUCTION
1.1 Background of the Study
Today’s volatile global business environment is characterized with supply chains that are
increasingly longer and more intricate, with more interconnected links, higher stakeholders’
expectation, and more sources of supply chain competition (Kamble, & Gunasekaran, (2020).).
Successful supply chain management relies on organizations working together and collaborating
effectively (Dubey et al., 2019). Due to the global span and impact of the supply chain, firms
instinctively understood that the synchronized flow of materials and services, information,
knowledge, and finance had the potential to produce desirable outcomes. In cognizance of the
need to coordinate and integrate these flows both within and among companies, firms have
continually integrated modern information technology tools in Supply Chain Management (SCM)
which has resulted in the improved business efficacy to a level never imagined before.
Successful supply chain management relies on organizations working together and
collaborating effectively. Due to the global span and impact of the supply chain, firms
instinctively understood that the synchronized flow of materials and services, information,
knowledge, and finance had the potential to produce desirable outcomes. In cognizance of the
need to coordinate and integrate these flows both within and among companies, firms have
continually integrated modern information technology tools in Supply Chain Management (SCM)
which has resulted in the improved business efficacy to a level never imagined before (Helms et
al, 2000).
The integration of IT in SCM and in particular inventory management holds great
potential to unlocking the efficacy of inventory management in today's supply chains by
improving information sharing, increasing predictability, reducing waste in value chains, better
monitor demand for certain products and place orders to prevent an out of-stock situation, hence
reducing bullwhip effects and lead time. Information
Technology (IT) continues to be one of the most important enablers of effective supply chain
management and improves supply chain agility, reduces cycle time, achieves higher efficiency
and deliver products to customers in a timely manner.
A great deal of interest in supply chain management stems from the availability of
information and the methods to analyze this information to reach meaningful results. Haag and
Stephen (2010), assert that the increasing importance of electronic business brings to fore new
opportunities and the widespread use of internet makes IT tools a source of competitive power
for many companies. Further, IT has been adopted in inventory management processes by firms
as a competitive edge and to build strategic long term relationships along the supply chain. The
swift development of IT, as well as the declining prices for its use, has considerably enhanced its
diffusion during the last few years. As a consequence, the impact of IT on productivity has
become a broadly discussed topic in management sciences, and several studies find empirical
evidence for the positive productivity effects of IT at the firm level. Nevertheless, IT adoption may
increase organizational flexibility and competitiveness (Devar at el a2013).
Inventory management is pivotal in any effective and efficient organization. The principal
goal of inventory management involves having to balance the conflicting economics of not
wanting to hold so few or too much stock. Such a golden balance is important in two ways; firstly,
as it saves the organization from having to tie up inactive capital, incurring huge costs in storage,
spoilage, pilferage and obsolescence of inventory and secondly to avert the cost of not meeting
customer requirements. According to the Official Dictionary of Chartered Institute of Purchasing
and Supplies (CIPS) inventory is a list of items held in stock or on the asset register of an
organization often used to mean the stock itself. An inventory management system is a system
that encompasses all aspects of managing a firm's inventories; purchasing, shipping, receiving,
tracking, warehousing and storage, turnover, and reordering. Abernathy et al, 2000 hold that
retail firms can obtain massive benefits by integrating its inventory management systems with
both logistics and its upstream supply chain. This would thrust inventory system to ‘just-in-
time’ demand-pull supply systems which implies essentially linking reordering to real-time
electronic point-of-sale (EPOS) - record consumer demand, allow tracking of orders consequently
substantial reductions in both retailer inventory holdings and the amount of capital tied up in
those holdings.
operational efficiency in supermarkets in Nairobi found out that the supermarkets with largest
extent of ICT application in their premises had the highest operational efficiency. However, the
impact of ICT on 9 inventory management on supermarkets in Nairobi has not been given
appropriate attention by scholars. Irungu and Wanjau (2011) carried out research on the effects
of Vendor Managed Inventory (VMI) technology on supermarkets in Kenya. They found out that
utilization of VMI systems increased effectiveness in stock management and cash flow
management. Majority of the existing studies do not address the impact of information
communication technologies adopted in inventory management by supermarkets.
Giving the challenges firms face in managing inventory through the manual system, most
firms are now focusing on the automation of organisational functions and processes. The most
available research on ICT has focused on how ICT has impacted on processes and functions
within a firm. Little has been said about how ICT has an impact on inventory management in
supermarket operations. The study, therefore, assesses the impact of ICT on inventory
management in the operations of supermarkets.
transformed into future revenue. At the same time as, extra inventory does growth costs, a
scarcity of Inventory can also bring about misplaced sales (Shin, Ennis, & Spurlin, 2015).
Inventory is a totally essential thing in every organization and it requires severe managerial
attention because it ties up a variety of companies’ capital (Samuel & Ondiek, 2014). Inventory
represents an in-depth listing of changeable objects inside the form of raw materials, in-manner
or finished goods, which are wanted within the manufacture of products or to maintain the
machinery and equipment in accurate working circumstance. It is miles an essential part of an
enterprise (Singh & Singh, 2013). Inventory represents a vital choice variable at all tiers of goods
production, distribution and income, similarly to being a prime part of total cutting-edge assets
of many groups (Mukopi & Iravo, 2015). An inventory management system is a device that
encompasses all elements of managing a firm's inventories; buying, shipping, receiving,
monitoring, warehousing and garage, turnover, and reordering (Kithinji, 2015). The primary
activities are: inventory planning and order forecasting, inventory observing and stability
reconciliation and inventory reporting. There is distinctive forms of costs that take part in
inventory cost structures: ordering (or setup) cost, carrying (or holding) cost (cost of capital, cost
of storage, cost of obsolescence, deterioration, and loss), stock out cost, object costs, transport
costs and other cost matter to volume discounts (Šabanović, 2012).
The one most important component of working capital is the inventory management.
Effective Inventory management facilitates will contribute base trusts in stock looking after
coherence clinched alongside benefits of the business activity, expands those spans of the
benefits of the business exercises by expanding aggregate offers Subsequently expanding reusing
for stores Also generating higher profitability. As towards this, if control proves inefficient in
stock control, it results into better inventory conversion duration, high fees of inventory, leading
to reduced recycling of price range, in the long run effecting profitability and liquidity of the
organizations (Madishetti & Kibona, 2013). When it comes to handling stock, organizations need
to keep sufficient stock to satisfy demand without investing in extra they require. Inventory
control systems pathway the amounts of each thing an organization maintains, triggering an
order of extra inventory whilst the portions fall below a pre-decided amount (Kumar, 2014).
For (Roy, 2012), the area plays very important role in the overall cost of operations and supply
chain of any business big or small. For (Han, 2007), inventory is used as a cushion against the
supply and demand uncertainties. In the same vein, for Khunagornniyomrattana et al (2007),
inventory is a double-edged weapon, since the lack of inventory leads to loss of productivity,
while excess inventory leads to loss of profitability.
management actions, diminishing on work-load as nicely as on enhancing the nice for the
inventory function. The investigation additionally demonstrated that however ICT has added to
the powerful administration of inventories there were still ranges to be enhanced as they
contrarily influenced the proficiency of the whole system.
According to the Mongare and Nasidai (2014) investigated the impact of information and
communication technology on inventory control system in transport organization.
Questionnaires were used as the main data collection Descriptive statistics analysis method was
to analyze the gathered data. Stock manage is critical for every one of the partners. It has specific
meanings to the quite a number stakeholders. Stock control has diverse results relying upon the
planning, that is, whether the quick time period or long term affects are the ones in question.
Inventory control system solutions do no longer continually require extra technology, dedicated
personnel or staffing resources. Rather, current science infrastructure, together with equipment
and computer systems with network connectivity can be used. Inventory manipulates and
associated technologies guarantee real enhancements in the administration of acquirement,
supplies administration chain. The association should be targeted in terms of their wants and
using the proper technological know-how to reap goals, rather, than obtaining technology of
stock manage due to the fact other organizations have it. Government interest in guaranteeing
centered media transmission industry must be noticeable to decrease or expel avoidable
expenses of actualizing stock control. According to the Chitiga and Choga (2016) studied the role
of information communication technology (ICT) in inventory management of small to medium
enterprises (SMES). A qualitative approach was used. Interviews and questionnaires were used
in data generation. The study discovered out that the utilization of computer systems in inventory
administration is constrained to very few functions. The SMEs are conscious significance of
computers in stock administration yet however needs appropriate mastery and experience of
executing sound stock guidelines and structures because of loss of financial sources and the
consequences of ICT.
The main difficulties for terrible ICT adoption in stock control had been trouble the power
in the nation and also loss of skills to use computer systems. There is want to teach SMEs body
of workers in advancing ICT structures use. Recognition movements of significance of computer
systems ought to be done. The authorities have to build up plans to encourage ICT utilization in
SMEs. It must additionally installation a lawful structure and country wide body advance ICT
structures in SMEs as properly as providing specialized help. According to the Shah and Shin
(2007) examined relationships among information technology, inventory, and profitability. The
study empirically shows that stock degrees have modified nonconsistently in the three areas
(production, wholesale and retail sectors). Additionally, the outcomes verify the absence of an
instantaneous hyperlink between IT funding and financial overall performance in all three
sectors. But the outcomes show that stock execution assumes a huge intervening part in the
assembling and retail segments, subsequently loaning help to the procedure model of IT venture
at the area level of total. Together, these outcomes feature the distinctions among the producing,
retail and wholesale sectors and have more extensive ramifications for sweeping statement than
comes about got from single division ponders. These outcomes demonstrate that a tremendous
influence (i.e. blessings) of IT funding on financial overall performance is found out not directly,
and is interceded through a change in inventory overall performance. Investigating relationships
which are set up at the firm stage at a better degree of aggregation assists to recognize consistent
limits of connections and increase idea development.
Modern inventory control systems often rely upon barcodes and radio-frequency
identification (RFID) tags to provide automatic identification of inventory objects. To record an
inventory transaction, the system uses a barcode scanner or RFID reader to automatically
identify the inventory object, and then collects additional information from the operators via fixed
terminals (workstations), or mobile computers.
which can stand alone or combined with others that include finance, logistics, manufacturing,
supplier management and human resources (Stevenson, 2007).
Performance Areas
2.7.3 Viruses
Well-known causes of computer problems are viruses, or damaging programs that are
introduced to computers or networks. Some viruses rewrite coding to make software programs
unusable, while others scramble or destroy data. Many viruses spread quickly and operate
subtly, so they may not be noticed until the damage has already been done.
2.7.4 Hackers
Hackers may hack password and attempt to over-whelm the system with information
from the outside so that it shut down.
sampling technique, data collections and instruments and data analysis and procedure. It also
briefly discusses profile of the organization.
management at Anaji Choice Mart, Takoradi. In the researcher’s encounter with the respondents,
the former asked specific and relevant questions that are related to the study.
3.5.1 Questionnaire
A questionnaire is a set of questions that is prepared to ask a number of questions and
collect answers from respondents relating to the research topic. A number of questions usually
in printed form were answered by the respondents. The forms had blank spaces in which the
answers was written. Set of these forms were distributed to the groups and answers related to
the topic were collected. When a questionnaire is properly structured and responsibly
administered, they become a vital instrument by which be statements can be made about specific
groups or population. Copies of questionnaire were administered to the management and staff
of Anaji Choice Mart. The questionnaire used both open-ended and close-ended questions. The
open-ended questions gave respondents options to choose whiles close-ended questions gave
respondents the chance to feel free and write their answers without restrictions.
and served as the basis for the analysis. The data was analyzed using descriptive statistics which
is frequencies and percentages to explain the variable characteristics.
From the table 4.1 above, it was revealed that out of the total of 50 respondents, 60% of
respondents were males while 40% of the respondents were females. This shows that the study
sampled more males as compared to females. Also, with the age of respondents in Table 4.1, 30%
of the respondents were between the ages of 18-25 years, 40% of the respondents were in the
ages of 26-35 years, 10% were in the age range of 36-45 years, 20% of respondents were between
46-60 years. This indicate that respondents sampled were matured enough to provide the
relevant information for the study variables.
With respect to the position in the table 4.1, it was revealed that 10% of the respondents have
served in the organisation for less than 3years, 20% of respondents has served between 4-9
years, 30% of the respondents has served between 10-15years and (40%) of the respondents has
served above 10years. This implies that, respondents sampled have been in service for long to
provide the necessary information for the study. From the table 4.1, the educational background
of the respondents revealed that 10% of the respondents are Wassce certificate holders, 40% of
the respondents were HND holders, 46% of the respondents have attained Degree in education
and 4% of the respondents have attained their masters. This shows that, respondents sampled
we educated and have better knowledge to provide relevant and reliable information for the study
variables.
Table 4.2: The extent of information technology usage in the inventory management
system at Anaji Choice Mart.
Percent Likert Response
Statement
Strongly Agree Agree Strongly Disagree Disagree
Determining Order Quantity 60.0 30.0 0.0 10.0
Forecasting Demand 40.0 40.0 5.0 15.0
Stock Valuation/ Accounting 50.0 30.0 7.0 13.0
Stock Keeping Unit 70.0 25.0 0.0 5.0
Just in Time System (JIT) 40.0 30.0 10.0 20.0
Source: Field Survey (2022)
Table 4.2 Shows, the extent of information technology usage in the inventory
management system at Anaji Choice Mart. From the questionnaires administered, 60% of the
total of the respondents strongly agree to it that it helps in Determining Order Quantity, 30%
also agree to this statement, while 10% disagree to it. Again, 40% strongly agree and 40% agree
respectively to it that it helps in Fore Casting Demand respectively. While 5% strongly disagree
and 15% disagree to the statement. Also, 50%, strongly agree and 30% agree respectively to the
statement that it helps in Stock Valuation / Accusingly-divisively. While 7%, strongly disagree
and 13% disagree to the statement respectively. Furthermore, 70%, strongly agree and 25%agree
respectively to it that it helps in Stock Keeping Unit. Whiles 5% just disagree to this statement.
Moreover, 40%, strongly agree and 30% agree respectively to the fact that it helps in Just in Time
System recognize whereas 10%, strongly disagree and 20% disagree to the statement afore
mentioned.
From this observation we can see that the information technology usage in the inventory man
automatically identify is relevant.
Table 4.3 shows the impact of ICT on inventory management performance. The responses
on the extent to which IT has enhanced information sharing with suppliers at Anaji Choice
Market showed that, 80% of the respondents strongly agree and agree to the statement while
20% strongly disagree and disagree respectively to it. Furthermore, out of the total questionnaires
administered 92% of the respondents strongly agree and agree to the statement that IT has
improved the supplier relationships, but 8% of the respondents disagree to it. In response to the
statement whether IT has enhanced streamlining of supply chain by the removal of inefficient
intermediaries, 90% of the respondents strongly agree and agree whereas 10% disagree. Also, in
response to the question IT has made it possible to enter into long-term commitments with
suppliers, 90% strongly agree and agree to the statement but 10% disagree to that statement.
Findings on IT has enabled tracking movement of stock units in the warehouse/stores, 90% of
the respondents strongly agree but 10% disagree. Finally, 60% both strongly agree and agree to
the statement that IT has enhanced provision of accurate inventory information to customers,
40% of the respondents both strongly disagree and disagree.
From table 4.4, 50%, strongly agree and 50% agree respectively to the statement that
developing Website was Costive, while none disagreed with the statement. Also, 45% strongly
agree and 50% agree respectively to it that the Cost of Operating a website is high, while 5%
disagree with the statement aforementioned. Moreover, 59% of the respondents strongly agree
and 39%agree respectively to viruses attacks on information, while 2% disagree with the
statement. Finally, 76%, of the respondents strongly agree and 24% agree respectively to the
statement that hackers can track and jam information, while none strongly disagree or disagree
with the statement. In a nutshell, we can draw from the survey that, IT in inventory management
has challenges in its usage.
5.0 CONCLUSION
This chapter gives a summary of the findings of the study, the conclusions and the
recommendations
Demographic characteristics of Respondents at Anaji Choice Mart: The summary of
the research findings on the demographic or personal data of respondents. The study revealed
that, more of them were males. Also, it was revealed that the respondents of the study were
matured enough and they have been in service for long to provide the necessary information to
the study. The study also discovered that most of the respondents were graduates who have
worked with the organization for over 10 years and worked in the department who have a
connection in the inventory, store and warehouse department in the organization. From the
research, it is shown that the organization had workers who have acquired the necessary level
of education and skills that can speed up work and development in the organization.
The extent of information technology usage in the inventory management system
at Anaji Choice Mart: The objective of the study was to discover the extent of information
technology usage in the inventory management system at Anaji Choice Mart. The data received
from the respondents shows that the information technology usage in the inventory management
system at Anaji Choice Mart is relevant in the following factors: determining order quantity,
forecasting demand, Stock Valuation / Accounting, Stock Keeping Unit and Just in Time System
(JIT).
Impact of ICT on inventory management performance: The second objective of the
study was to discover the Impact of ICT on inventory management performance. And from the
study it was discovered from the respondent that, ICT has impact on inventory management
performance at the Mart. This signifies that ICT has an impact on inventory management
performance.
Challenges involve in using ICT to manage inventory: The third objective of the study
was to discover Challenges involved in using ICT to manage inventory. And from the study it was
revealed from the respondents that, there are challenges in using ICT in the inventory
management; and these includes website development costs, Cost of Operating a Website,
Viruses and Hackers.
5.2 Conclusion
The use of ICT in inventory management performance is very key in this modern inventory
taken. And from the study at Anaji choice Mart, we realized that using ICT to manage inventory
is key for company’s performance. Though it was discovered that there are challenges in it usage,
it does not entirely dispute its significance for the growth of the company.
This implies that if measures are put in place to harness the challenges in ICT usage, it will
improve in company’s performance in inventory management.
5.3 Recommendations
The study recommends that supermarkets in Ghana should invest in modern
technologies in order to integrate their inventory management systems. This would minimize
communication costs and increase sharing of information which leads to improved efficiency and
performance of supermarkets in Ghana. The study proposes the need for investing on
appropriate mechanism that will facilitate the use of information technology baring any
challenges in it usage in inventory management to boost performance. This will enable firms to
understand the benefits of information technology in managing their inventory systems in order
to create a need for adoption in the future.
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