EXPLORING ERP SYSTEM CAPABILITIES FOR INVENTORY ACCURACY IN SUPERMARKET CHAINS: THE EAST AFRICAN SUPERMARKETS

Abstract

Inventory accuracy is critical for the survival and success of supermarket chains, and there is increased
search and application for new solutions and modern technologies to achieve operation inventory
accuracy. Accuracy of inventory management is vital for the success of supermarkets for example, it
results into lower inventory investment, ensures customer satisfaction and maintain profitability for the
supermarket. This is because inventory accuracy enables supermarkets to avoid stock-outs, overstocking
and unnecessary carrying costs. This paper aims to explore and describe inventory ERP systems and their
capabilities in the achievement of inventory accuracy in supermarket chains hinging on continuous
improvement theory and Technology-Organization-Environment (TOE) model. An empirical
investigation, using a qualitative case study design was conducted. Collective case study approach was
used studying cases of two leading supermarkets (C-ug and N-ke) in Uganda and Kenya. Data was
obtained by interviewing two key informants from each supermarket (ERP system controller and stores
Manager). Content Analysis and Multiple Response Analysis were used to analyze unstructured questions
and structured questions respectively. The findings indicated that an ERP system operates through the
integration of internal sections of the supermarket and external players such as the suppliers. Secondly,
it was found that a good ERP system should be user friendly, fit for the nature of business of supermarkets
with key security features for better functioning in supermarket chains. Finally, the study provides that
ERP systems have great capabilities for achieving inventory accuracy in the operations of supermarket
chains through real-time inventory monitoring, automated notifications about the status of the goods and
the stock levels, provision of demand reports on products and automated inventory tracking In this study,
a case study approach was taken when studying the capabilities of ERP in supermarket chains on two
supermarkets hence the findings need to be validated by widening the scope of the supermarket chains.
Most Previous research takes a wholistic approach when examining the influence of ERP on inventory &
warehousing and supply chain disregarding its direct impact on inventory accuracy yet other inventory
management Technology applications such RFID have been largely tested on inventory accuracy hence
the need to test ERP capabilities on inventory accuracy.
Keywords: Supermarket Chains, ERP system capabilities, Inventory Accuracy, East African
Supermarkets.