A Comparative Analysis of ERP Versus Traditional Inventory Management Systems: A Case Study of PZ Cussons Nigeria in Kano State
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Background of the Study
Inventory management is a crucial aspect of supply chain operations, with efficiency directly affecting organizational performance. Traditional inventory systems primarily rely on manual tracking and standalone software, while Enterprise Resource Planning (ERP) systems offer integrated solutions for real-time inventory visibility and process automation (Onyeka & Bala, 2024).
PZ Cussons Nigeria, a major FMCG company, operates extensive inventory management systems in Kano State. The company’s reliance on both ERP and traditional inventory management systems provides an opportunity to analyze their comparative effectiveness in optimizing operations and reducing costs (Ahmed & Sadiq, 2023).
Statement of the Problem
The choice between ERP systems and traditional inventory management approaches presents challenges for organizations striving to achieve efficiency and cost-effectiveness. PZ Cussons Nigeria faces difficulties in identifying the best approach for inventory optimization in Kano State. This study aims to compare these systems' effectiveness in addressing inventory management challenges (Usman & Musa, 2023).
Objectives of the Study
- To evaluate the effectiveness of traditional inventory management systems in optimizing operations at PZ Cussons Nigeria.
- To assess the benefits of ERP systems in enhancing inventory visibility and control.
- To recommend the most suitable inventory management system for PZ Cussons Nigeria in Kano State.
Research Questions
- How effective are traditional inventory management systems in meeting PZ Cussons Nigeria’s operational needs?
- What benefits do ERP systems provide in improving inventory management efficiency?
- Which system is more effective for inventory management at PZ Cussons Nigeria in Kano State?
Research Hypotheses
- H0: Traditional inventory management systems do not significantly improve operational efficiency at PZ Cussons Nigeria.
- H0: ERP systems do not significantly enhance inventory visibility and control.
- H0: There is no significant difference in performance between ERP and traditional inventory systems.
Scope and Limitations of the Study
The study examines the effectiveness of ERP and traditional inventory management systems in PZ Cussons Nigeria’s Kano State operations. Limitations include restricted access to proprietary system data and potential resistance to disclosing operational challenges.
Definitions of Terms
- ERP System: An integrated software solution that manages core business processes, including inventory management.
- Traditional Inventory Management: Systems relying on manual tracking or standalone software for inventory control.
- Inventory Optimization: The process of ensuring the right inventory levels to meet demand while minimizing costs.
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