Linking inventory management practices to inventory and warehouse performance in the retail industry in Gauteng and KwaZulu-Natal Provinces

Abstract

The application of inventory management practices to improve inventory and warehouse performance is a critical concept in supply chain management. These activities are fundamental in contributing to the value creation of firms' supply networks. The present study investigated the link between inventory management practices, inventory performance and warehouse performance in the retail industry in Gauteng and KwaZulu Natal provinces. The study used a quantitative approach based on a combination of correlation and survey design methods to examine the identified relationships. A total of 203 supply chain professionals selected from retail outlets in the Gauteng and KwaZulu Natal provinces participated in the survey. The collected data were analysed using the combination of Statistical Package for Social Sciences and the SMART PLS software. Major data analysis techniques employed in the study included descriptive statistics, Exploratory Factor Analysis and Structural Equation Modelling. The results show that the three inventory management practices: inventory investment, inventory control and ABC analysis, positively influence inventory performance. Two practices: inventory turnover optimisation and shrinkage prevention were statistically insignificant. Additionally, Inventory performance positively influenced wareho use performance. Theoretically, the study provides a comprehensive analysis and contributes to the literature on inventory and warehouse management in the retail industry in South Africa. Practically, the study facilitates more informed inventory and warehouse management problem diagnostics and decision-making by managers and supply chain professionals in the retail industry.