Overall Performance Improvement of an Small Scale Venture Using Critical Key Performance Indicators

摘要

Inventory theory and supply chain management have become important to small businesses in order to improve an organization's competitive strength and survival. The rapid growth of small businesses of late has seen them to face a challenge in managing their inventory effectively and efficiently. A study was carried out in F.E. (Private) limited a pioneer in distribution of electrical equipments based in Chennai, whose two major challenges were, stock-out and excess stock due to uncertainty in demand. The organization wanted to develop its performance and overall efficiency by considering a change in the inventory policy. The main aim of this research is to attain operational excellence through inventory management and measure its effectiveness using critical key performance indicators. A new inventory policy was developed to improve the inventory turns and measure its performance after implementing the new inventory policy. The results revealed that the implementation of new inventory policy helped to save over Rs. 2.25 lakhs per month in terms of total inventory carrying cost to the selected organization.