Designing and developing a framework for embedding inventory optimisation into SMEs

Small to Medium-Sized Enterprises (SMEs) are a cornerstone of the economy, yet they face significant issues when adopting new technology and management practices (TAMPs). This has led to a long-term SME productivity crisis. Stock holding SMEs must also contend with severe demand and supply variability and constraints. Inventory Optimisation (IO) is a TAMP that enables businesses to maintain the right stock whilst accommodating restrictions and uncertainty. The main aim of this research is to design and develop a framework to help SMEs adopt and successfully embed IO into their businesses. The research began with a literature review covering SME TAMP adoption, as well as a detailed review of the benefits of IO for SMEs. The findings are then explored and confirmed by a mix methods approach. A survey instrument was developed and validated by five experts from industry and academia. The survey was sent to five-hundred and seventy-two in target SMEs. Ninety-three completed responses were received. Following the survey seven semi-structured interviews were conducted to explore the findings. The framework was validated by industry and academic experts and refined based on their feedback. The developed framework consists of four phases: Raising Awareness, Pre Implementation, Implementation and Continuous Improvement. Each phase contains specific activities and is supported by templated documents which standardise and simplify the onboarding process. The research makes several theoretical contributions. It contributes to SME literature by focusing on an economically significant but comparatively underexamined business demographic. It also extends ERP and TAMP adoption literature by demonstrating that SME IO adoption can be conceptualised through a phased model comprising Raising Awareness, Pre-Implementation, Implementation and Continuous Improvement. In doing so, the study reinforces the importance of pre-implementation activity in shaping adoption success and highlights the role of continuous improvement in ensuring that IO becomes embedded after implementation. Finally, the research contributes conceptually by showing that clear and standardised TAMP definitions are important, as definitional ambiguity can create barriers to SME understanding and adoption.