Volume 15 Issue 2 45 ©2015 IJAMS INVENTORY MANAGEMENT PERFORMANCE IN MSMEs: WHAT FACTORS DO INFLUENCE THEM? Puneet Mangla 1 , Ashish Agarwal 2 , Pulak M Pandey 3 1 Research Scholar, Department of Mechanical Engineering, SOET, IGNOU, Maidan Garhi, Delhi 1 Department of Mechanical Engineering, Hindustan College of Sc. & Tech., Mathura-282110, INDIA mangla_p@rediffmail.com 2 Department of Mechanical Engineering, SOET, IGNOU, Maidan Garhi, Delhi-110068, INDIA ashisha@ignou.ac.in 3 Department of Mechanical Engineering, Indian Institute of Technology, Delhi-110016, INDIA pmpandey@mech.iitd.ac.in Abstract: Micro, small, medium enterprises (MsSMEs) are important contributors to national economy. Consequently, MSMEs are considerably vulnerable, exposed to intense competition and lacks commensurate knowledge. In an era of liberalization MSMEs should be more competitive in context of quality, service and cost. However, MSMEs faces constraints in several key areas such as SCM, agile manufacturing, technology, and human resources. Therefore, it is felt in inventory intensive manufacturing units, inventory management practices (IMP) and competencies for agile readiness are perhaps pivotal for attaining competitive advantage. We focused on medium entrepreneurs and probed inventory related practices. We probed which factors influence IMP and how they are adapted and applied. Insights perhaps facilitate researchers and practitioners to work-out framework to provoke agile readiness thereby sustainability. This study is based on MSMEs located in North India. We explored what are the IM practices adopted by these units? What crucial aspects do influence IMP and the inventory cost? We addressed and audited IMP, and sought parameters needed to be changed in the context of agile readiness. The paper aims to contribute to knowledge by developing a deeper understanding into IM practices via articulating influenced factors/activities within the process. Keywords: Inventory management, Supply chain, Manufacturing enterprises, MSME, ITR, Inventory cost, Agile manufacturing. 1. Introduction Micro, Small and Medium Enterprises (MSMEs) plays important role of „engine‟ to stimulate the economic growth. For developing economies, MSMEs are pivotal, as economic status largely depends on health of MSMEs. The 4 th Census statistics of Ministry of MSME Sector (2010), estimated 26.1 million enterprising units exists that employees 59.7 millions, nearly four times that of large corporate. In that matter, the Annual Report 2012-13, Ministry of MSME, Government of India, figured out numbers of MSMEs to be approximately 30 million that would in the next three years perhaps provide employment to around 12 million people. It is meritorious that 67.10% registered MSME enterprises are engaged in manufacturing. Henceforth, sustainability of manufacturing MSMEs is pivotal for economy as well as for employment. Moreover, in recent times, developed economies witnessed relative increase in several MSMEs being a major source for employment. However, MSMEs are vulnerable, and their failure rate is higher, as they are grappled with many problems, such as domain expertise, technology access, low production capacity, ineffective manufacturing process, strategy and poor supply chain management. The tough competitive scenario because of globalization has put enormous pressure on MSMEs never seen and experienced before (Huin, 2004). Researchers argue that MSMEs must redefine themselves for achieving competitive advantage over others through optimal use of limited resources (Ricklavely, 1996). Therefore, IJAMS