Inventory Control Models in Indian SMEs: An Empirical Assessment Based on Enterprise Classification
https://doi.org/10.62157/ijietom.v3i1.82
Keywords:
Inventory control, Indian SMEs, Enterprise classification, Economic Order Quantity (EOQ), Just-In-Time (JIT), ABC analysisAbstract
Inventory control remains a cornerstone of operational efficiency in Small and Medium Enterprises (SMEs) in India, yet systematic evaluation across enterprise classifications—micro, small, and medium has been limited. This study empirically investigates the adoption and effectiveness of key inventory control models, including Economic Order Quantity (EOQ), Just-In-Time (JIT), and ABC analysis, in a cross-sectional sample of 450 SMEs across manufacturing clusters in Maharashtra, Tamil Nadu, and Gujarat. Findings indicate that microenterprises prefer heuristic and manual methods, whereas medium enterprises exhibit higher adoption rates of quantitative models such as EOQ and JIT. A chi-square analysis confirmed significant differences in model adoption across enterprise classifications. The study further identifies the primary drivers and inhibitors of model adoption, including digital readiness, training levels, and working capital constraints. The implications are crucial for policymakers and practitioners aiming to tailor inventory interventions to SME sub-types. This research bridges a critical gap in inventory literature by aligning control models with real operational contexts within the SME spectrum in India.
References
Ahuja, I. P. S., & Khamba, J. S. (2010). Total productive maintenance: literature review and directions. International Journal of Quality & Reliability Management, 27(7), 832–857. https://doi.org/10.1108/02656711011062465
Bhattacharya, A., & Sinha, K. (2018). Inventory practices in Indian textile MSMEs. Journal of Small Business Strategy, 28(1), 101–114.
Cachon, G., & Terwiesch, C. (2019). Operations Management. McGraw-Hill Education.
Chong, A. Y. L., Lo, C. K. Y., & Weng, X. (2009). The business value of IT investments on supply chain: A contingency perspective. Journal of Business Research, 62(8), 724–733. https://doi.org/10.1016/j.jbusres.2008.03.007
Christopher, M. (2016). Logistics & Supply Chain Management (5th ed.). Pearson Education.
Deloitte. (2022). Digital Maturity Index for Indian SMEs. Deloitte Insights.
Fatoki, O. (2014). The financial management practices of small firms in South Africa. Journal of Social Sciences, 40(2), 151–158.
FICCI. (2021). Impact of COVID-19 on Indian Industry: SME Perspective. New Delhi: Federation of Indian Chambers of Commerce and Industry.
Goel, A., Singh, R., & Gupta, A. (2021). Classification of Indian MSMEs: Operational implications. International Journal of Entrepreneurship and Small Business, 43(2), 217–234.
Heizer, J., Render, B., & Munson, C. (2020). Operations Management (13th ed.). Pearson.
Jain, V., Sharma, R., & Yadav, R. (2021). Post-pandemic operational resilience of Indian SMEs. Asian Journal of Business Ethics, 10(1), 33–50. https://doi.org/10.1007/s13520-021-00121-1
Kamble, S. S., Gunasekaran, A., & Gawankar, S. A. (2020). Sustaining SMEs through ERP-based inventory control. Benchmarking: An International Journal, 27(8), 2481–2502. https://doi.org/10.1108/BIJ-06-2019-0282
Kumar, V., Singh, R. K., & Shankar, R. (2020). Framework for performance evaluation of inventory models in SMEs. Journal of Manufacturing Technology Management, 31(5), 1105–1125.
Mehta, A., & Singh, P. (2019). Technology adoption barriers in Indian MSMEs. Journal of Entrepreneurship and Innovation in Emerging Economies, 5(1), 49–64. https://doi.org/10.1177/2393957518823855
Sharma, S., Chaurasiya, R., Mohite, R., & Akre, S. (2025). A Regional Analysis of Supply Chain Management in India’s Defense Sector: The Case of Gwalior, Madhya Pradesh. International Journal of Strategic Studies, 2(1), 8–18. https://doi.org/10.59921/icestra.v2i1.74
Ministry of MSME. (2023). Annual Report 2022–23. Government of India. https://msme.gov.in
Mukherjee, D., Singh, H., & Bhatia, P. (2021). Inventory bottlenecks in engineering SMEs. Operations and Supply Chain Management, 14(2), 134–142.
Patel, K., & Desai, A. (2020). Government schemes for MSMEs: Awareness and adoption gap. Indian Journal of Economics and Development, 16(3), 350–359.
Prajogo, D., & Olhager, J. (2012). Supply chain integration and performance: The effects of long-term relationships and information technology. International Journal of Production Economics, 135(2), 514–522.
Mohite, R. A., Chourasiya, R. H., Sharma, S., Akre, S. (2025). Enhancing the Competitiveness of MSMEs Through Industrial Engineering Innovations in Supply Chain Management. International Journal of Engineering Management, 9(1), 30-38. https://doi.org/10.11648/j.ijem.20250901.14
Rajeev, P. (2008). Inventory management in small enterprises: A case of Coimbatore engineering SMEs. The IUP Journal of Supply Chain Management, 5(2), 24–38.
Rachmania, I. N., Putra, M., & Anggraini, D. (2021). Factors influencing inventory model adoption in Indonesian SMEs. Journal of Small Business and Enterprise Development, 28(4), 559–578.
S. Sharma, R. Chaurasiya, R. Mohite, and S. Akre, “Inventory woes and logistic bottlenecks: operational challenges in the SCM of the Indian defense sector”, Defense and Security Studies, vol. 6, no. 1, pp. 39–48, May 2025.
Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2011). Small vs. young firms across the world. World Bank Economic Review, 26(1), 31–56. https://doi.org/10.1093/wber/lhr027
Banerjee, T., & Mondal, A. (2020). Inventory management practices in Indian SMEs: A case-based approach. Journal of Small Business Strategy, 30(2), 54–67.
Bertsimas, D., & Thiele, A. (2006). A robust optimization approach to inventory theory. Operations Research, 54(1), 150–168. https://doi.org/10.1287/opre.1050.0235
Deshmukh, S. G., Seth, N., & Vrat, P. (2013). Inventory control in small-scale manufacturing firms. Production Planning & Control, 24(2-3), 105–117.
Gupta, M., & Jain, V. (2021). Lean inventory adoption in Indian SMEs: An empirical assessment. International Journal of Production Management, 9(3), 112–128.
Kadam, P., & Gokhale, R. (2019). Classification-based inventory behavior in MSMEs. Indian Journal of Industrial Engineering, 46(2), 122–137.
Kurniawan, R., & Widodo, W. (2020). SME inventory challenges: Insights from Indonesia. Operations Management Research, 13(4), 275–287.
Lopez, D., & Gonzalez, F. (2018). Inventory systems in Latin American SMEs. Small Enterprise Development, 29(4), 69–80.
Mukhopadhyay, A., Singh, R., & Lal, V. (2022). Simulation-based inventory control for SMEs. Journal of Supply Chain Analytics, 7(2), 41–53.
Mungai, M., & Makori, M. (2015). Inventory optimization among Kenyan SMEs. African Journal of Business Management, 9(2), 33–41.
Nahmias, S., & Olsen, T. (2015). Production and operations analysis (7th ed.). Waveland Press.
Ogunlana, S., Ajayi, A., & Shittu, O. (2017). Inventory methods across Nigerian SME classifications. International Journal of Business and Management Review, 5(8), 15–29.
Osei, K., & Zhuang, Y. (2020). Behavioral economics of inventory control in Ghanaian SMEs. Journal of Small Business & Enterprise Development, 27(6), 923–942.
Pandey, R., & Aggarwal, S. (2021). Digital inventory systems in Gujarat-based SMEs. Global Business Review, 22(4), 1056–1074.
Pande, M., & Sharma, R. (2022). Digital maturity of Indian SMEs in inventory management. Indian Journal of Operations Research, 17(1), 77–93.
Rathi, S. (2021). Cloud ERP adoption in Indian manufacturing SMEs. Technovation India, 12(3), 90–102.
Saxena, M., & Vohra, A. (2020). Digitization in Indian MSMEs: Trends and challenges. Asia Pacific Journal of Innovation and Entrepreneurship, 14(1), 45–63.
Kumar, V., Singh, R. K., & Shankar, R. (2020). Framework for performance evaluation of inventory models in SMEs. Journal of Manufacturing Technology Management, 31(5), 1105–1125.
Ministry of MSME. (2023). Annual Report 2022–23. Government of India. https://msme.gov.in
Stevenson, W. J. (2018). Operations Management (13th ed.). McGraw-Hill Education.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Authors
This work is licensed under a Creative Commons Attribution 4.0 International License.
