International Journal of Management, Knowledge and Learning, 9(2), 169–184
Supplies Inventory Management
in a Corporation Context:
A Case Study
Juha Lukkarinen
University of Oulu, Finland
Jukka Majava
University of Oulu, Finland
Inventories and inventory management are integral in supply chain and lo-
gistics activities. This study analyses supplies inventory management in a
corporation and the unique challenges in this context. The study is qualita-
tive, and a case study of an organisation’s inventory management practices
is conducted. The findings highlight the importance of reliable inventory data,
documented inventory management practices and unified inventory manage-
ment organisation. They also illustrate the issues and development needs
in supplies inventory management in a corporation. Despite the single case
study generalisability limitations, managers can utilise the findings as a ref-
erence for inventory management development projects in corporations.
Keywords: inventory, inventory management, corporation, supply chain
management (SCM), logistics
Introduction
Inventories are frequently seen as cost centres that act as buffers in supply
chains and temporary places for storing items (Richards, 2018). Inventories
influence the business, as logistics costs are approximated to be several
percentages of the revenue of construction and retail firms, and inventory
costs form roughly 50 % of overall logistics costs (Solakivi et al., 2018).
In other words, inventories have a direct effect on the supply chain and
logistics efficiency (Lummus & Vokurka, 1999; Silver et al., 1998).
Richards (2018) describes different inventory types, such as supply, raw
materials, work-in-progress (WIP), maintenance and spare parts inventories.
Although inventories are costly for companies, they exist for good reasons.
These are often related to, for example, achieving economies of scale, bal-
ancing supply and demand and controlling uncertainty in the markets (Kra-
jewski et al., 2019).
When considering the basis of inventory management, questions includ-
ing ‘What items should be stocked?’, ‘Where should the items be stocked?’
and ‘How much of and when should the items be ordered?’ arise (Muck-
www.issbs.si/press/ISSN/2232-5697/9_169-184.pdf
170 Juha Lukkarinen and Jukka Majava
stadt & Sapra, 2010). In addition, three elements are identified from the
literature that form the basis for efficient inventory management and its
development: supply chain and materials management for achieving overall
efficiency (Lambert et al., 1998; Silver et al., 1998), information systems
for allowing real-time data and knowledge-based management (Faber et al.,
2002; Weske, 2012) and the organisation of management and personnel
for controlling and developing the inventory process (Lee & Dale, 1998;
Yingling, 1997).
With these factors in mind, this study aims to analyse supplies inventory
management challenges in a corporation context. In particular, a diverse
corporation environment provides a large variety of needs that should be
met, and naturally, more challenges can emerge as a result of this more
complex environment, compared to a single inventory and company context.
This study focuses only on supplies inventories in the case organisation.
The above-mentioned objectives of the study can be condensed into the
following research questions (RQs):
RQ1 What is the current state of and development needs for supplies
inventory management in the case organisation?
RQ2 How does the corporation context affect supplies inventory manage-
ment?
The research questions are addressed through literature findings on effi-
cient inventory management and empirical analysis. The current state anal-
ysis is formed by conducting semi-structured face-to-face interviews, col-
lecting inventory data from different information systems and documents
and observing the inventory process in the case company’s facilities. The
paper is structured as follows: First, the elements of efficient inventory
management are described. Then, the research method is explained. The
case description and analysis are observed in the results section. Finally,
the results of the paper are discussed from theoretical and managerial per-
spectives.
Literature Review
Supply Chain and Materials Management
Supply Chain Management (SCM) can be considered as the integration of
business activities from suppliers to end users (Prajogo et al., 2016). Van
Weele (2010) highlights that the initial objective of SCM is to satisfy or
exceed the needs of the end user. Materials management is, therefore, ac-
cording to Arnold et al. (2008), a coordination procedure for planning and
controlling material flows. Lambert et al. (1998) describe the basic ele-
ments of materials management as follows: anticipating material require-
ments, sourcing and obtaining materials, introducing materials into the or-
International Journal of Management, Knowledge and Learning
Supplies Inventory Management in a Corporation Context 171
ganisation and monitoring the status of materials as a current asset. All
these activities should be linked to organisational goals and strategy (Lam-
bert et al., 1998).
SCM and materials management are strongly related to each other. Typ-
ically, two basic functions can be found in the supply chain: receiving and
shipping materials. In addition, managing information and capital flows is
essential in supply chain management (Hugos, 2018). It is important to un-
derstand that problems in managing supply chains and materials are visible
in the form of wrong inventory levels and overall inefficiency (Lambert et al.,
1998; Lee, 2002), and as mentioned, inventories themselves are costly
(Krajewski et al., 2019). Hence, these activities should be optimised.
The need for stock can be evaluated by conducting an ABC analysis,
which highlights the fact that different items require different control strate-
gies (Chu et al., 2008). Braglia et al. (2004) present that, for example,
items with high demand and value should be stored or acquired, utilising
the just-in-time (JIT) method in order to minimise inventory costs. By exploit-
ing the JIT philosophy, the need for own stocks is basically zero as the items
are supplied at the right time to meet targets, but due to the risk of delivery
failure, own safety stocks are compulsory in certain situations (Krajewski
et al., 2019). Users demands, the reliability of the supply chain and the
relationship between the firm and the supplier all have an effect on which
control strategy is implemented and on the amount of stock required. These
strategies include, for example, storage in the company’s own facilities or
letting the supplier take care of inventory activities (Wallin et al., 2006).
Spare parts for maintenance control strategies differ from others be-
cause of their different nature (Kennedy et al., 2002; Puurunen et al.,
2014). Criticality, value, part speciality and demand should all be taken
into account when choosing the right control strategy (Huiskonen, 2001).
Huiskonen (2001) observes that the relationship between suppliers and
other actors in the field should be deepened by utilising, for example, com-
mon inventory pools for spare parts with high value and criticality but often
very low demand. Good examples of cooperation with suppliers are con-
signment stock and vendor-managed inventory (VMI), where, in both cases,
the supplier participates in a company storage and inventory management
(Beheshti et al., 2020; Lakra & Bedi, 2014).
Naturally, the operative work conducted by the inventory personnel is
very important in order to keep the inventory in good shape and well or-
ganised. Van den Berg and Zijm (1999) describe the inventory process as
follows: receiving, stocking, order picking and shipping. This operative work
should include, for example, regular manual inventory verification where the
items are manually counted in order to correct inventory records (Kang &
Gershwin, 2005).
Volume 9, Issue 2, 2020
172 Juha Lukkarinen and Jukka Majava
Information Systems
As competition increases, the importance of information systems in control-
ling and improving processes grows (Lee, 2002; Weske, 2012). Systems
that allow the controlling of inventory levels, such as warehouse manage-
ment systems (WMSs) and enterprise resource planning (ERP), make it pos-
sible to optimise inventory levels and material flow (Faber et al., 2002). In
addition, the use of information systems has increased the overall efficiency
of supply chains in a remarkable way (Cachon & Fisher, 2000).
Whereas a WMS is a system for controlling an inventory process (Faber
et al., 2002), ERP allows an even broader approach as it offers a large
variety of new ways to do business and to increase integration inside the
company (Ali & Miller, 2017; Krajewski et al., 2019). Furthermore, Umble
et al. (2003) state that the benefits of using ERP are not only limited to
industrial companies as it can be utilised in any firm that wants to optimise
its operations.
The automation of ordering through ERP decreases inventory levels and
the amount of orders made (Krajewski et al., 2019). This kind of activity is
possible by setting lead times, safety stock, reorder points (ROPs), the eco-
nomic order quantity (EOQ) and the maximum inventory level in terms of the
system variables (Wen-Yong et al., 2011). The data provided by information
systems help management in decision-making and allow knowledge-based
management instead of the making of intuitive decisions (Jääskeläinen &
Luukkanen, 2017; Strijbosch et al., 2000). To aid decision-making, key per-
formance indicators (KPIs) are created to measure the variables that are
the most important for the success of the company (Parmenter, 2007).
KPIs are essential when the organisation wants to recognise the factors
that are vital for developing inventory management practices (Johnson &
McGinnis, 2010), and it can be generalised in terms of the fact that infor-
mation systems and the data provided have a lot of weight when developing
business processes in an organisation (Zairi, 1997). It should be remem-
bered that the sub-optimisation of different processes should be avoided
(Yingling, 1997). This supports the acquisition and utilisation of common
ERP by the organisation in order to achieve transparency and maximum
business efficiency.
Organisation of Management and Personnel:
Business Process Management
Business process management (BPM) is a systematic approach that en-
ables the analysis, development and control of processes (Hung, 2006;
Lee & Dale, 1998). In essence, BPM is a tool for fulfilling cultural change in
an organisation related to the considered process (Zairi, 1997). Dumas et
al. (2013) observe that BPM focuses on controlling and developing value-
International Journal of Management, Knowledge and Learning
Supplies Inventory Management in a Corporation Context 173
adding activities as a whole, instead of concentrating on single processes.
To make BPM possible, Yingling (1997) presents the necessary organ-
isation and people in terms of three different levels: at the heart of the
management system is the management team, the second level consists
of department teams within the organisation and the outer level is formed
by the key business process teams. BPM itself is implemented in five steps:
identify key processes and related goals, define key cross-functional busi-
ness processes, form teams and develop a charter, develop measures and
continuously manage the process (Yingling, 1997). A systematic approach
is vital for success (Lee & Dale, 1998; Yingling, 1997; Zairi, 1997). In the
last step, the PDCA method (also known as the Deming circle), discussed
by Sokovic et al. (2010), is suitable as the development work requires con-
tinuous monitoring and examination by conducting regular meetings within
the development team (Yingling, 1997).
The key business process team’s job is to supervise and manage the
inventory process as they are responsible for ensuring that the process
is managed and performed correctly, and as mentioned, sub-optimisation
should be avoided (Yingling, 1997). It should be remembered that common
policies and goals related to overall business and inventory management
result in decreased overall costs and bigger profits and, therefore, support
the business overall (Kannan et al., 2013). All the elements that form the
basis for efficient inventory management according to the literature review
are illustrated in Figure 1.
Research Method
This study is qualitative in nature, and a case study strategy (Eisenhardt,
1989) was employed. The study began by analysing the elements of effi-
cient inventory management, i.e. supply chain and materials management,
information systems and the organisation of management and personnel.
After that, a current state analysis of the case organisation’s inventory man-
agement was conducted. The selected case organisation is a Finnish corpo-
ration in the energy sector. A current state analysis was created by carrying
out semi-structured interviews with twenty people (from top management to
the operative level) in the corporation, one group interview, collecting and
analysing inventory data from information systems and documents and ob-
serving inventory management practices in the corporation’s everyday work.
The interview questions were divided into six categories according to the
interviewee’s position: 1. top management, 2. energy producing and main-
tenance, 3. finance, 4. inventory users, 5. inventory personnel and 6. IT ad-
ministration. The questions focused on fundamental inventory issues, such
as current inventory practices in the company, problems and challenges and
different needs based on the interviewee’s position. The data analysis fol-
Volume 9, Issue 2, 2020
174 Juha Lukkarinen and Jukka Majava
Inventory
management
Supply chain
and materials
management
Information
systems
Organisation
of management
and personnel
Forecasting, analysing and
classifying different needs
(Chu et al., 2008; Lambert
et al., 1998)
Choosing the control strategy
(Braglia et al., 2004; Huisko-
nen, 2001; Wallin et al., 2006)
Improving collaboration with
suppliers and other actors in
the field (Huiskonen, 2001;
Lakra & Bedi, 2014; Prajogo et
al., 2016)
Daily operative work in terms
of the inventories (Kang &
Gershwin, 2005; Van den Berg
& Zijm, 1999)
Creating data as part of the in-
ventory process (Lee, 2002;
Weske, 2012)
Harmonisation of action and
practices (Yingling, 1997; Zairi,
1997)
Achieving transparency
(Jääskeläinen & Luukkanen,
2017; Krajewski et al., 2019)
Utilisation of KPIs (Johnson &
McGinnis, 2010; Parmenter,
2007)
Control of inventory process
(Faber et al., 2002; Krajewski
et al., 2019)
Automated purchasing (Krajew-
ski et al., 2019; Wen-Yong et
al., 2011)
Setting common goals that
benefit the whole organisation
(Kannan et al., 2013; Yingling,
1997)
Describing the inventory pro-
cess (Yingling, 1997)
Forming the development team
(Lee & Dale, 1998; Yingling,
1997)
Defining KPIs (Johnson &
McGinnis, 2010; Parmenter,
2007; Yingling, 1997)
Continuous improvement and
assessment (Sokovic et al.,
2010; Yingling, 1997)
Figure 1 The Elements of Efficient Inventory Management Based on the Literature Review
lowed guidelines by Eisenhardt (1989). The analysis was conducted using
a qualitative approach, i.e. reading the interviews several times, each time
going deeper into the data to find connections, patterns, and comparisons.
Current state analysis is unique to the corporation level, and therefore, it
was deemed to be very beneficial for the case organisation. In the last part
of the study, the effects of the corporation context related to inventory man-
agement were analysed and validated, and the related implications were
discussed and concluded.
Results
Case Description
The case organisation is a Finnish energy company that was established
back in the 1880s and is located in Northern Finland. The company’s rev-
enue was approximately 300 million euros, the profit was roughly 30 million
euros, and it employed, on average, 400 people in 2018. The company
provides energy services and clean energy. Its operations cover the entire
International Journal of Management, Knowledge and Learning
Supplies Inventory Management in a Corporation Context 175
value chain of the energy industry from the production of raw materials to
the generation, sale and distribution of energy. In addition, the company
provides smart energy services, network management, subcontracting and
maintenance services.
The case organisation consists of a parent company and five sub-
sidiaries. The parent company can be divided into two different business
areas: energy production and heat services. The main goal of this six-month
research project was to create an understanding of the current state of the
corporation’s supplies inventory management. This kind of research has
not been conducted before at the corporation level concerning supplies in-
ventories. The sub-goals were to create and distribute information regarding
efficient inventory management practices within the corporation and to find
common development needs.
Before the research, the understanding and transparency of different
supplies inventory management activities and practices within the corpora-
tion were limited. Each subsidiary had its own supplies inventories in dif-
ferent geographical locations. The inventories included a large variety of dif-
ferent items, for example, cables and transformers. This diversity resulted
in diffused inventory management practices. In this study, the current state
analysis is conducted during the empirical research in order to create a
corporation-level inventory management framework.
Current State Analysis
This section presents the findings related to RQ1: What is the current
state of and development needs for supplies inventory management in the
case organisation? The current state analysis started in May 2019. The
researcher observed the inventory management practices within the corpo-
ration and investigated data from the available information systems and
documents. The first step involved forming the basis of the current state
analysis including, for example, the locations of supplies inventories and
the types of items that were stored in them. After that, interviews were con-
ducted within the organisation. The interviewees were mostly in manage-
ment positions because of the insufficient organisation of operative inven-
tory management and the limited number of people allocated to operative
work.
Based on the current state analysis, it was obvious that there were
shortages and challenges in every element of the theoretical framework
presented in Figure 1. The main challenge was the inexistence of real-time
and reliable inventory data. Because of the lack of accurate data and the
inexistence of KPIs, visibility at the operative level was poor, and as a re-
sult, knowledge-based decision-making was difficult. In some inventories,
storage workers controlled the daily material flow. In general, the inventory
Volume 9, Issue 2, 2020
176 Juha Lukkarinen and Jukka Majava
management organisation and the people responsible, whose main focus
was on inventories, were fragmented and defective. In most cases, inven-
tory management and the control of material flow took place as a side task.
Daily inventory management, which focused mainly on controlling invento-
ries, did not extend to the biggest part of the corporation’s inventories. Also,
the supplies inventories were not centralised because each company had
their own storage in different locations. Thus, it was difficult to control the
inventories.
The lack of process documentation for controlling the materials resulted
in subjective decision-making in the inventories. Because of this, the work
conducted by the personnel and inventory users was, in most cases, based
on each person’s own views and experience. The interviewees admitted
that there were challenges and uncertainty in the general rules and proce-
dures concerning supplies inventories. The roles of inventory management
were unclear, and the basic practices for diffused supplies inventories were
incomplete.
The supplies inventories faced problems, such as the shortage of free
space and the high number of non-marketable or unknown items. In the
worst-case scenario, broken items were mixed with and stored in between
intact articles because the rules and positions regarding storage were not
generally documented and visible. As a result, it was possible to retrieve
broken items in urgent situations. This happened frequently in inventories
where storage workers were absent and where overall disorder was high.
The lack of free space caused issues when orders were made at the wrong
time and when items arrived at the inventory too early. In cases like this,
an understanding of the supply chain and ordering at the right time are
important in order to maintain optimal inventory levels.
It was notable that the current problems and challenges led to indirect
costs and overall inefficiency in the corporation’s everyday work, which also
resulted in, for example, extra time taken in finding items in the invento-
ries. The current inventory management did not support the corporation’s
business and was not in line with its strategy. The challenges and related
implications can be seen jointly in Table 1.
Inventory Management Challenges in a Corporation Context
This section presents the findings related to RQ2. How does the corporation
context affect supplies inventory management? The current state analysis
indicated that there were many basic-level challenges concerning the corpo-
ration’s supplies inventories. The first challenge identified from the current
state analysis was the inexistence of a common ERP system, which results
in poor visibility between the parent company and subsidiaries. Without ac-
curate and real-time data, it was impossible to make data-driven decisions
International Journal of Management, Knowledge and Learning
Supplies Inventory Management in a Corporation Context 177
Table 1 Issues Based on Current State Analysis
Challenge(s) and development need(s) Implication(s)
No common ERP system. Transparency and data-driven business
making challenging.
No real-time and accurate inventory data. No visibility regarding inventory levels,
knowledge-based management hard.
No common and documented practices for
inventory management and control.
Subjective decision-making, no continuity.
Diffused and defective inventory
management organisation.
Daily operative inventory work challenging,
defective division of responsibility,
collaboration not exploited.
No reporting of inventories. Visibility regarding operative level and
information flow poor.
Shortage of free space and disorder in the
inventories.
Extra time spent on finding items, safety
risks.
High level of non-marketable items. High inventory levels, added costs, lack of
free space.
Information related to inventories strongly
person bound.
Risk of losing information.
Diffused inventory locations. Travelling between inventories.
A lot of manual work. Overall inefficiency, no utilisation of
technology.
for optimising inventory levels. In the corporation context, the importance
of data is essential as there are more needs to be met and, naturally,
more information to deal with. Without common ERP, collaboration inside
the corporation is harder, and the barriers are higher not only in inventory
management but also in other business operations.
As inventories were not centralised and their locations were diffused, a
lot of travelling and overall effort was required in order to utilise the inven-
tories. In the case company, some of the subsidiaries had to exploit each
other’s inventories for daily operative work. As the general rules for man-
aging inventories were not properly documented and followed, the disorder
in the inventories kept on growing. The lack of documentation and people
focusing on inventory management made it difficult to keep the inventories
up-to-date and efficient. Development work and efforts were not conducted.
Hence, the importance of organisation and jointly approved processes in
inventory management cannot be underestimated. This is highlighted in the
corporation environment as the users of inventories can vary significantly.
When the need to use part of the inventory appears, the overall process for
retrieving an item must be visible and clear.
Overall, the inventory management in the case organisation was sub-
optimised even though the subsidiaries had a need for collaboration related
Volume 9, Issue 2, 2020
178 Juha Lukkarinen and Jukka Majava
to utilising the inventories. The importance of real-time and transparent in-
ventory data, inventory-focused personnel for operative control and develop-
ment work and commonly agreed upon and visible inventory management
practices must be emphasised. In general, all the aspects described in the
literature review of this study have effects on inventory management and its
development. As the corporation environment has special characteristics,
such as a large variety of needs to be met, the shortages in inventory man-
agement practices are emphasised and result in overall inefficiency in the
corporation’s everyday work.
Discussion
This study focused on inventory management challenges in a corporation
context. A literature review on the elements of efficient inventory manage-
ment provided the framework for the study. Next, a current state analysis
was conducted, and challenges and development needs related to the case
organisation’s inventory management were identified. In this section, the
study’s findings are discussed from theoretical and managerial perspec-
tives.
The results of the study indicated a large number of inventory manage-
ment challenges in a corporation (Table 1). These challenges were strongly
related and divided into three categories according to the literature review:
supply chain and materials management, information systems and the or-
ganisation of management and personnel. The lack of real-time inventory
data, the non-existence of commonly agreed upon and visible inventory
management practices and defective inventory management organisation
all resulted in disorder in geographically diffused inventories, poor trans-
parency inside the corporation and overall inefficiencies.
The corporation context adds more unique requirements for inventory
management as the number of different stakeholders grows, the environ-
ment expands and more demands emerge, which all make inventory man-
agement more complex. In this context, the importance of common data,
processes and people responsible for corporation-level inventory manage-
ment are highlighted.
Theoretical Implications
The current state analysis identified many challenges related to the case
organisation’s inventory management practices. The key findings of our
study highlight the importance of reliable inventory data, documented inven-
tory management practices and unified inventory management organisation
to improve operational efficiency. Inventory management is a key part of
supply chain and logistics efficiency (Lummus & Vokurka, 1999; Silver et
al., 1998), and therefore, the inventory management impacts the whole
International Journal of Management, Knowledge and Learning
Supplies Inventory Management in a Corporation Context 179
business. In the corporation context, all the inventory types presented by
Richards (2018) exist, and as a result, the reasons for building stock are
extensive in order to satisfy the different needs within the corporation. Strij-
bosch et al. (2000) argues that an advanced forecasting and inventory con-
trol approach provides a good service level in many circumstances, whereas
a simple approach may lead to larger inventories in order to meet the re-
quired service level. The findings of our study also indicate that the cor-
poration’s inventories contain many types of items with different demand
patterns, which may create a need for tailored control approaches.
As the environment and needs expand, the importance of supply chain
and materials management, information systems and the organisation of
management and personnel grows. The common materials management
practices and rules presented by Lambert et al. (1998) and Van den Berg
and Zijm (1999) must be documented and standardised. Also, in cases
where the inventory data are insufficient, knowledge-based management
and decision-making is challenging. Chu et al. (2008) propose an advanced
ABC-method that provides high accuracy of classification. However, the find-
ings of our study indicate that insufficient inventory data can make even
a simple ABC analysis difficult to execute. Thus, optimising the inventory
levels can be difficult.
As observed by Kannan et al. (2013), developing inventory management
can bring many benefits, such as decreased costs and increased profits.
Our study indicates that achieving these benefits requires the harmoni-
sation of inventory management practices. This requires corporation-level
instructions for handling materials in the inventories and the adoption of
the 5S method (i.e. sort, set in order, shine, standardise and sustain) for
improved organisation and standardisation. In addition to the 5S method,
the use of visual control can be considered (Majava et al., 2019; Majava &
Ojanperä, 2017). This would also enable a reduction in the number of inven-
tories and the combining of the items stored in them. In addition, a system-
atic approach is vital for success, and efficient BPM (Lee & Dale, 1998; Yin-
gling, 1997; Zairi, 1997) requires re-organisation. With re-organisation and
new organisational structures focused on developing and executing opera-
tive inventory management, the set objectives would be easier to achieve in
some cases. Organisations also need KPIs for developing their processes
and practices (Johnson & McGinnis, 2010). In addition, information sys-
tems and data are very important in the business process development
(Zairi, 1997). The findings of our study stress the importance of KPIs, as
observed also by Johnson & McGinnis (2010).
The ultimate goal in modern inventory management should be a data-
driven organisation, enabled by common ERP, with a definition of its in-
ventory processes and the creation of inventory-focused management. Our
Volume 9, Issue 2, 2020
180 Juha Lukkarinen and Jukka Majava
study’s results support the findings by Jääskeläinen & Luukkanen (2017)
who argue that that middle managers’ work is affected by informal controls
and relies in many cases on individual intuition and judgment based on
experience, rather than performance information or formal instructions. As
the corporation context demands more exact information in order to achieve
knowledge-based management instead of the making of intuitive decisions
(Jääskeläinen & Luukkanen, 2017; Strijbosch et al., 2000), the need for
ERP and generic development work are obvious.
Managerial Implications
In this study, the challenges found related to inventory management are
quite elementary and result in overall inefficiency in the corporation’s every-
day work. The current challenges set a good example of the importance
of the different elements concerning efficient inventory management in-
troduced in the literature review. For example, if the usage of information
systems and exact data regarding inventory levels is defective, knowledge-
based decision-making is almost impossible, and therefore, the optimisa-
tion of inventory levels is more difficult. This applies to both single com-
panies and corporations where, as mentioned, the needs and motives for
storing can vary a lot. Without common rules and procedures, which are fol-
lowed by inventory personnel, everyday operative work is difficult to perform.
In addition, as development work and continuous improvement are essen-
tial for ensuring overall efficiency, the importance of inventory-oriented per-
sonnel and top management initiatives for improving inventory management
practices cannot be underestimated.
The results of this study cannot be directly generalised to other compa-
nies and corporations because the challenges and inventory maturity levels
can differ a lot from one situation to another. However, this study highlights
the fact that without the elements of efficient inventory management, the
challenges can lead to diffused inventories, which are ineffective and do
not support the business of the organisation. It is also notable that, as the
corporation environment is a very broad one, the development work should
be given time, and it should be ensured that the moves made during the
development project support the set objectives and business strategy.
Conclusions
Inventories have a remarkable effect on companies’ businesses as they
affect the overall supply chain and logistics efficiency. As inventories them-
selves add costs, inventory optimisation is vital in order to minimise costs
but at the same time ensure a suitable level of service.
In the study, a current state analysis was conducted, and related chal-
lenges and development needs were analysed. The literature review acted
International Journal of Management, Knowledge and Learning
Supplies Inventory Management in a Corporation Context 181
as a base for understanding the big picture in terms of the elements affect-
ing efficient inventory management. The main challenges in the studied cor-
poration inventory management were the lack of exact and accurate inven-
tory data, the non-existence of common and visible documented practices
for managing inventories and defective inventory management organisation
for the daily control and development of inventories. These challenges led
to overall inefficiency in the corporation.
In a corporation environment, shortages of the elements needed for ef-
ficient inventory management become more visible. Without common in-
ventory data, collaboration between the companies inside the corporation
related to the inventories and their use is challenging to execute. As dif-
ferent stakeholders inside the corporation utilise other companies’ invento-
ries, transparency and common rules for controlling the inventories should
exist. If this is not the case, decision-making is subjective, and operative
work performed in the inventories is not uniform. In addition, the lack of
corporation-level inventory management personnel may result in the lack of
development work at the corporation and subsidiary levels. These types of
shortages lead to diffused inventories and overall inefficiency.
This study has the typical limitations of a single case study, for example,
generalisability, validity and reliability concerns. The interviews related to
current inventory management practices were recorded and validated after
the interviews. Information systems data were analysed with great caution
as the systems were defective, and therefore, the data were mostly incor-
rect. Finally, this study illustrated the challenges in terms of a low maturity
inventory management level in a corporation context. In addition to studying
different types of contexts and business sectors, potential future research
could focus on implementing development work in corporations’ supplies
inventories and its effect on businesses.
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Volume 9, Issue 2, 2020
184 Juha Lukkarinen and Jukka Majava
Juha Lukkarinen received his MSc in Industrial Engineering and Management
from University of Oulu in 2019. Mr. Lukkarinen has experience in inven-
tory management and sourcing in energy and industrial sectors. Currently
he works as Senior Purchaser at Metso Minerals Oy.
juha.lukkarinen@hotmail.com
Dr Jukka Majava is an adjunct professor and a university lecturer in Industrial
Engineering and Management at University of Oulu, Finland. His industrial ex-
perience includes technology and ecosystem marketing, partner and project
management, and business and supply chain development at Nokia Corpo-
ration. He has research interests in product innovation, business networks,
and operations management.
jukka.majava@oulu.fi
International Journal of Management, Knowledge and Learning