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Int. J. Production Economics

Int. J. Production Economics 118 (2009) 136–145

0925-52

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Assessing inventory projects from a stakeholder perspective:Results of an empirical study

Jan de Vries �

Department of Operations Management, Faculty of Economics and Business, University of Groningen, P.O. Box 800, 9700 AV Groningen, The Netherlands

a r t i c l e i n f o

Available online 20 August 2008

Keywords:

Inventory system

Case study

Stakeholder perspective

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ail address: Jan.de.Vries@rug.nl

a b s t r a c t

Based on the stakeholder salience theory, in this article five inventory projects are

described and analysed. Results of the case studies presented in this article show that in

practice the reshaping of inventory systems often is not a linear, well-defined process

but emerge during the course of the project. Most importantly, our case studies clearly

indicate that the outcome of inventory projects is often heavily influenced by the

interests of different stakeholders. Apparently, decisions made during the course of

inventory projects are only partly based on rationality and strongly influenced by

negotiation behaviour, power relationships and opportunistic behaviour of the

stakeholders involved. It seems to be important to be aware of the different roles

stakeholders can play during the course of inventory projects. The results presented in

this article may therefore help project managers to guide projects in the area of

inventory management more effectively.

& 2008 Elsevier B.V. All rights reserved.

1. Introduction

In practice, projects in the area of inventory manage-ment often relate to different management areas andcover several aspects like information, planning andcontrol. Additionally, inventory management systems inmany cases also encompass an organisational dimension.Allocating authorities and responsibilities as well ascreating co-ordination mechanisms between the partiesinvolved in the inventory system for instance, are someimportant decisions that have to be made during theprocess of (re)designing and implementing inventorysystems (e.g. Bonney, 1994). For this reason, the (re)designand implementation of inventory systems can be con-sidered as complex decision-making processes, includingmany different aspects which relate to different manage-ment areas and which are affected by several stakeholdersinvolved in the project (e.g. Kisperska-Moron, 2003).

ll rights reserved.

Studies performed in the area of ERP-implementationssuggest that different stakeholders often have differentperceptions of the aim and scope of ERP-projects(Boonstra, 2006; Markus, 1983). Additionally, in manycases various stakeholders have different interests regard-ing the outcome of the project and it is for this reason thatthe outcome of projects in the field of ERP apparently is amix of rational behaviour, political actions and negotiationbehaviour of the stakeholders involved. Because thedesign and implementation of inventory systems isdirectly related to management areas like Production,Sales and Finance, there are some indications that nofundamental differences exist between ERP-projects andprojects on inventory management. Similar to ERP-projects, projects in the area of inventory managementare often characterised by different stakeholders beinginvolved in the project, conflicting goals to be achievedand a dominant role of information technology (e.g.Frankel, 2006; Manthou et al., 1996).

Interestingly, only few studies have addressed thequestion how the design and implementation of inventorysystems is affected by different stakeholders. Moreover,

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only a limited number of empirical studies areavailable regarding the question how cultural differences,conflicting interests and power relationships of stake-holders influence the shaping and implementationof inventory systems (Janssen, 2005). Undoubtedly,having a clear understanding of how power andinterest relationships between the stakeholders influencethe outcome of inventory projects can be helpful tostrategic and tactical decision-making processes oninventory systems. Additionally, this understanding canalso be beneficial for the effectiveness of inventoryprojects.

Our paper draws heavily on five case studies. Each ofthe case studies aimed at providing an in-depth under-standing of the role and impact different stakeholders canhave on the design and implementation process of aninventory management system. Starting from the notionthat inventory management projects often include aplanning, information and organisational dimension, aframework for assessing the influence of different stake-holders is presented. This framework is based on thestakeholder salience theory (e.g. Mitchell et al., 1997), andaims at describing and analysing the influence stake-holders may have on inventory projects. In the secondpart of the paper, the framework is confronted withpractice. The case studies describe and analyse successivechanges in the inventory system of five companies. Inparticular, the case studies try to reveal how actions basedon the perceptions of the stakeholders have influenced theshaping of the organisation, information and planningaspects of the inventory system. The last sections of thepaper elaborate on some of the main findings of the casestudies. First of all conclusions are drawn about howdifferent stakeholders can influence the outcomes ofinventory projects. Secondly, conclusions are derived fromour case data regarding the application and usefulnessof applying a stakeholder perspective when analysinginventory projects.

2. Backgrounds

Traditionally, inventory management is often asso-ciated with volume and timing decisions. For this reason,in literature a huge amount of models and techniques isavailable dealing with questions like: how big shouldreplenishment orders be, at what point in time replen-ishment orders should take place, and what proceduresshould be implemented in companies to facilitate thetiming and volume decisions (e.g. Blinder and Maccini,1991). During the last decade however, both in literatureas well as in practice, there is a growing awareness thatinventory management not only relates to managing day-to-day decisions but also encompasses organisational-related issues. Zomerdijk and de Vries (2003) for instanceaddress four different dimensions that relate to anorganisational perspective on inventory control. Basedon an in-depth case study they argue that the allocation oftasks, the decision-making processes, the communicationprocesses as well as the behaviour of parties involvedin the inventory management system ultimately deter-

mine the effectiveness of inventory control in practicalsituations. In line with the results of the case studyperformed by Zomerdijk and de Vries (2003), de Vries(2005) presents an approach for diagnosing inventorymanagement systems. Amongst other issues, this ap-proach includes an assessment of the organisationalembedding of the inventory management system. Clearly,the way functions and activities related to the inventorysystem are shaped, the overall organisational structure,the degree of formalisation of behaviour and the alloca-tion of authorities and responsibilities regarding theinventory management system also highly influence theperformance of inventory management systems (de Vries,2005).

Not only the day-to-day performance of inventorysystems is highly affected by the organisational context ofthe system, when confronted with the need to reassessinventory systems the outcome of the diagnosing andredesign process probably is also influenced by theorganisational setting of the inventory project. It is wellknown from organisational literature for instance thatvarious groups of people in organisations may havedifferent perceptions and interpretations of informationsystems to be implemented (Knights and Murray, 1992;Markus, 1983). From this perspective, the shaping anddesign of information systems can be explained bystudying the actions and attitudes of the stakeholdersinvolved in the process of change. Especially in the field ofinformation systems, many studies indicate that variousstakeholders react in different ways when confrontedwith a necessity to (re)design the information system onhand. Additionally, the ultimate outcome of Informationand Communication Technology (ICT) projects is often theresult of political processes, different perceptions stake-holders have of the system as well as the result of anongoing process of welcoming, rejecting and adaptingdifferent features of the system. The model presented byOrlikowski (1992) for instance suggests that technologiesare modified by the stakeholders involved in the changeprocess and that for this reason, information systems arenot the result of a fixed, pre-determined set of rationaldesign rules.

To deepen our understanding of the shaping ofinventory management systems, it seems to be worth-while to study the influence and actions of differentstakeholders during the design and implementation ofinventory systems. Similar to projects in the field ofinformation systems, inventory management projects areoften characterised by the existence of multiple stake-holders. In practice, representatives from the area ofproduction, sales, planning and ICT often participate ininventory projects and it is for this reason, it is reasonableto assume that the outcomes of inventory projects areshaped by the actions of various stakeholders. Althoughdifferent definitions exist of stakeholders, in our study astakeholder is defined as an individual or a group ofindividuals who can affect or is affected by the redesignand implementation of an inventory system. Our study inother words, considers an inventory project as a changeproject and focuses on the influence different actors haveon the outcome of this inventory project. Additionally, in

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our study the stakeholder salience theory is taken asthe starting point. In this theory, stakeholders areconsidered to have one or more attributes that enablethem to affect the outcome of a change project.A stakeholder can either have the power, legitimacyand/or the urgency to influence actions. Power relatesto the capacity to exert the will over others in orderto realise certain intended benefits, in our contextregarding the inventory system (Buchanan and Badham,2000). Legitimacy, on the other hand, relates to whetheractions of an individual or a group are validated byanother individual or group of individuals. A thirdimportant attribute stakeholders can have, relates to theurgency (or necessity) of the claim. Clearly, the urgencyregarding the outcome of an inventory project can differamongst the various stakeholders participating in theproject.

Based on the above-mentioned attributes, eight typesof stakeholders can be distinguished. In our study, weassume that each type of stakeholder has certaincharacteristics in terms of power, legitimacy and/orurgency which enable the stakeholder to influence theoutcome of an inventory management project to a certaindegree. Table 1 summarises the eight types of stake-holders following the lines of the stakeholder saliencetheory (e.g. Mitchell et al., 1997). Starting from these eighttypes of stakeholders, the question arises how theoutcome of inventory projects can be affected by theperceptions and influence different stakeholders haveregarding the inventory system. In the next sections, theresults of an empirical study aimed at answering thisquestion are reported.

Table 1Overview of different stakeholders (e.g. Mitchell et al., 1997)

Type of

stakeholder

Attributes

Dormant

stakeholders

Posses the power to impose their will but this power

can not be used because neither the legitimacy, nor

an urgent claim exist

Discretionary

stakeholders

Posses only the legitimacy to impose their will on

other stakeholders. However, not having the power

nor the urgency to influence the behaviour of other

stakeholders results in discretionary position of the

stakeholders

Demanding

stakeholders

These stakeholders only have an urgent claim to

influence the behaviour of other stakeholders

Dominant

stakeholders

These stakeholders have both the power and the

legitimacy to impose their will on other

stakeholders

Dependent

stakeholders

Posses the urgency and the legitimacy to influence

the behaviour of other stakeholders. Dependent

stakeholders however, have no power and are for

this reasdon dependent on other stakeholders

Dangerous

stakeholders

Dangerous stakeholders have the power and

urgency but not the legitimacy to impose their will

on others

Definitive

stakeholders

These stakeholders have the power, legitimacy and

urgency to influence the behaviour of other

stakeholders

Non-stakeholders Non-stakeholders possess none of the attributes and

have for this reason no stakeholder relationship

with other actors

3. Research methodology

The empirical part of our research is founded on fivein-depth case studies. Case data was selected during theperiod 1997–2005. The initial research objective of thecase studies focused on assessing the strengths andweakness of inventory systems of medium-sized compa-nies and aimed at developing a diagnostic tool forinventory management systems which could be appliedin a broad range of manufacturing situation. However,during the development of this diagnostic tool it becameclear that different stakeholders did have differentperceptions of the actions that had to be taken to improvethe inventory system. Additionally, the results of theassessment studies gave some indications that the out-come of the inventory projects was affected by theinteraction between the stakeholders involved in theproject. For this reason, the focus of our case studiesshifted towards answering the following three researchquestions:

1.

What stakeholders have been involved in the inventoryprojects?

2.

How do these stakeholders interpret the strengths andweakness of inventory systems?

3.

How is the redesign and implementation process of therefined inventory system affected by the stakeholders?

4.

How does the refined inventory system affect theinterests of the various stakeholders?

The research questions addressed above are ‘how’

questions about a contemporary set of events having anopen and explorative character. Consequently, a casestudy approach appeared to be most appropriate and itis for this reason why we decided to conduct a multiplecase study (Yin, 1991). This multiple case study aimed atcomparing and assessing the influence different stake-holders have on the shaping and implementation processof inventory systems. It is interesting to note that little isknown about the complexity of this interaction and that iswhy we used a mixed strategy to gather data. In our study,we selected five firms from a variety of industries such asfood production, chemical industry and construction. Oneof the main criteria for inclusion in our study was that thecompanies apparently seemed to struggle with theshaping of their inventory system. For this reason, allcompanies had initiated an inventory project aimed atimproving the internal as well as external performance oftheir inventory system. Secondly, the firms were selectedby assessing the degree of complexity of their inventorysystem. Only companies producing a wide variety ofproducts, serving different markets and facing a highdegree of uncertainty regarding customer demand wereselected. This was done to ensure a certain degree ofuniformity regarding the complexity of the inventorysetting the different stakeholders faced. The size of thecompanies varies from 100 to 750 employees and all firmsare independent having distinctive functional areas likeproduction, sales, finance, marketing and procurement.

Data collection was conducted in two phases. Phase 1involved an in-depth case study during 6 months. During

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this period data was gathered by attending and observingmeetings, studying internal reports, conducting (semi-)structured interviews and distributing questionnaires. It isimportant to note here that during this phase the role ofthe research team was solely restricted to makingobservations and to providing the project team withanalytical theory-based data. The research team in otherwords, did not directly interfere in social and politicalprocesses and all personal interviews were conductedstrictly confidential. During phase 1, the issues addressedin interviews mirrored and further probed the observa-tions made. Starting from the stakeholder salience theory,data was gathered regarding the role and influence ofpower of the stakeholders involved in the project, theperception the stakeholders had regarding the shaping ofthe inventory system and the actions taken by differentstakeholders during the course of the project. In doing so,the research team tried to capture the dynamic behaviourof the stakeholders in relation to the implementation ofthe refined inventory systems. By using multiple datasources as well as by conducting multiple (semi-)struc-tured interviews which were linked to the observationsmade during the 6-month research period, any systematicdistortion in our study was ruled out.

The second phase of our research encompassed aperiod of 1 year during which regular visits were paid tothe company aiming at monitoring the process ofimplementation and operation of the refined inventorysystem. During these visits, special attention was paid toconfronting the initial project objectives with the inven-tory system being implemented and the underlyingdesign rationale of this system. Moreover, during thissecond phase our research focused on two researchquestions:

1.

How does the process of shaping the inventory systeminteract with the interest of different stakeholders overtime?

2.

How did the final inventory system evolve in time andto what extent were project objectives achieved?

During the second phase of the study each companywas visited 3–5 times. Clearly, the data-gathering

procedure during this second phase was more conden-sed and consisted of a restricted number of interviews(10–16 interviews per company), studying internal reportsand attending important meetings on an incidentalbase.

4. Case descriptions

Table 2 presents an overview of the five cases in termsof the parties involved in the inventory project, theperception of the main stakeholders regarding the initialinventory problems as well as of the type of stakeholder.In this section each case study will be briefly described. Indoing so, we will focus on the main characteristics of theinventory project and the role different stakeholderplayed during the process of analysing and redesigningthe inventory system.

4.1. Case A

Company A produces and sells a wide range of woodengarden applications like panels, pergolas, fences andgarden furniture. Currently, about 220 employees operateat company A. Products are sold world-wide by a dealernetwork or by authorised sole distributors. The market ofgarden applications consists of a retail market and a retailplus market. The retail plus market is covered by well-known and renowned Garden centre and Do-It-Yourselfmarkets selling high quality products against a reasonableprice. The retail market, on the other hand, is charac-terised by a strong focus on lower quality products. At themoment, company A has a strong position in the retailplus market. During the last 5 years however, thecompany is facing strong competition from EasternEuropean countries especially in the lower price, lowerquality segment of the market.

In 2003, the company initiated an inventory projectaimed at reducing inventory costs. Three main issuesbeing addressed in the initial project statement were theimprovement of sales forecast, a more intensive co-ordination between the production, logistical and salesdepartment and the implementation of a product classi-fication system (A,B,C systems). By differentiating be-tween product types in terms of turnover and bydiscriminating between different stock items accordingto their value of usage, the company aimed at concentrat-ing their efforts on specific stock items. In doing so, areduction of inventory costs was aimed at. In the projectfour stakeholders were involved. According to top man-agement, the co-ordination between production and salesneeded to be improved and for this reason, both a salesmanager and a production manager were included in theproject. Furthermore, a logistical planner and an informa-tion analyst took part in the project group. The first onebecause of his linking-pin function between productionand sales and his responsibility for the overall goods flowcontrol of company A. The latter one because of thepotential consequences the implementation of an A, B, Cstock item classification system could have for the ITinfrastructure. In 2004, after a 1-year period of discus-sions, numerous project meetings and achieving minorprogress, top management decided to cancel the imple-mentation of the A, B, C classification system. Additionally,top management decided to overrule the project groupand redefined all the responsibility areas regarding theinventory system making Sales fully responsible for boththe accuracy of the sales forecast and the associatedinventory costs.

4.2. Case B

Company B is a medium-sized company that develops,produces and sells a wide range of heating products.Examples of products being made are radiant panels, airhandling units and gas or oil fired heating systems.Currently 165 employees are working at company B. Thecompany operates in different countries and servesdifferent markets like the professional market of fittersand plumbers. Additionally, company B also installs

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Table 2Overview of the inventory projects and the stakeholders involved

Case Company profile Stakeholders Project result

Actor Type Perceived problem

A Manufacturer of garden

applications (fences,

sheds, etc.)

Sales manager Dependent, later

dominant– Lacking service delivery performance – A redefnition of responsibilities

regarding the inventory system

Production manager Dominant – A poor sales forecast,

– A lack of giving planning priority to certain products (A,B,C, classification)

Logistical planner Dependent – A lack of co-ordination

Information analist Demanding – Poor data infrastructure

Top management Dormant, later

dominant– Excessive inventory costs

B Medium-sized company

that develops, produces

and sells heating products

(radiant panels, air

handling units, etc.)

Sales manager Dominant – Selling products which are out of stock – A redesign of the organisational

setting of the inventory system

– A redefinition of planning

procedures

– Implementation of a modified

inventory information system

Production manager Dominant – Absence of integrated planning concept

Head of planning

department

Dependent – Demanding co-ordination between production, sales and planning department

Warehouse manager Definitive, later

dependent– Inaccurate data on stock levels, current inventory information system is fragmented

C Medium-sized distillery

that produces alcoholic

beverages, liqueurs and

soft drinks

Logistical manager Dominant – A lack of integration between production planning and inventory control – After 1 year, the project was

terminated and no changes of

any significance were

implementedSales manager Dominant – Shortcoming regarding the allocation of authorities and responsibilities

Warehouse manager Demanding – Ineffective usage of storage capacity

Board of management Dormant – Inventory system shows low cost efficiency

D Manufacturer of sandwich

filling

Plant manager Dominant, later

definitive– A lack of transparency regarding inventory decisions

– Inappropriate cost allocation system

– Some modules of an ERP

system were successfully

implemented

Production manager Dependent – A poor linkage between production planning and inventory control

Head of planning

department

Demanding, later

definitive– A high degree of uncertainty regarding decisions to be made

E Medium-sized company

that develops, produces

and sells medium voltage

systems and component

Board of management Dormant – Stock levels being too high – Modification and

implementation of inventory

modules which were

integrated into the existing

MRP system

Procurement manager Demanding – Poor provision of tactical and operational information

Head production

department

Dominant – Allocation of authorities and responsibilities shows some shortcomings

Representative of planning

department

Dependent – Planning decisions are not based on reliable information

ICT specialist Dominant – Company lacks an integrated information system

Sales manager Dominant – Lacking performance in terms of availability of products

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heating systems in large buildings like churches andservice stations. In 2001, a large-scale inventory projectwas initiated in the company aimed at improving theperformance of the inventory system being used. Thecompany faced several inventory problems amongstwhich inaccurate data on stock levels, frequently runningout of stock and demanding co-ordination betweenproduction, sales and planning about stock levels. Thebasic idea at the start of the project was to make anassessment of the current inventory system and to studywhether the implementation of an ERP system couldovercome the shortcomings of the existing inventorysystem. Four stakeholders were involved in the projectnamely a production manager, a sales manager, the Headof the planning department and a warehouse manager.During successive project meeting different perceptions ofthe inventory problems were discussed. Basically, theproduction manager felt that many of the inventoryproblems were due to the absence of an integratedplanning concept (e.g. ERP system). The Sales representa-tive at the other hand perceived the shortcomings of theinventory system as an ICT problem. The remainingstakeholders were more eager to start with redesigningthe organisational setting of the inventory system andconsidered the implementation of an ERP system onlypartly as a solution for the problems the company wasfacing. In 2002, at the end of the inventory project no ERPsystem was implemented. The organisational setting ofthe inventory system however, was redesigned. Also,planning procedures were redefined and a modifiedinventory information system was implemented.

4.3. Case C

Company C is a medium-sized distillery which pro-duces alcoholic beverages, liqueurs and soft drinks. Manyof the alcoholic liqueurs and beverages are sold underdifferent brand names which enables the company toserve different markets. Some of the markets show a slowdecrease of the market volume because the liqueursclearly are at the end of their product life cycle. Somemarkets, on the other hand, show a strong increase interms of volume (e.g. mix and energy drinks). The productrange of company C can be classified as rather high andincludes more than 800 different products which areproduced and sold in different quantities. In 2003 thecompany initiated a project aimed at reducing stock leveland optimising the storage capacity of the warehouse. Inaddition, one of the main project objectives was tointegrate the production planning and inventory controland to reassess the allocation of authorities and respon-sibilities regarding the inventory system. The inventoryproject therefore covered the physical infrastructure of theinventory system as well as the associated planning andcontrol system and the organisational embedding of thesystem. The project started with the formation of a projectgroup which consisted of the logistical manager, a salesmanager and a warehouse manager. The project wasfurthermore monitored by the Board of Managementbecause of the scope and perceived importance of theproject. During 2003–2004 an in-depth study was made

of the strengths and weakness of the inventory systemincluding all the areas mentioned above. Additionally, awide range of solutions was suggested by the stakeholdersinvolved in the project. However, no consensus wasagreed upon the direction of the solutions which ulti-mately resulted in the Board of Management making thedecision to dismantle the project.

4.4. Case D

In 2000 company D initiated a project focusing onreducing inventory costs and optimising stock levels.Company D is a medium-sized manufacturer of a widevariety of sandwich filling. All products are stored in acentral warehouse from which the products are distrib-uted to supermarkets, retailers and purchasing organisa-tions representing independent retail formulas. Wheninitiating the inventory project, there was a strong beliefwithin the company that the project objectives could berealised by improving the provision of informationconcerning production planning decisions and by redu-cing uncertainties as much as possible. Clearly, some ofthe stakeholders involved in the project distrusted exist-ing planning procedures and strongly believed that moretransparency of decisions on batch size and stock levelsultimately would lead to a significant improvement of theperformance of the inventory system. In the project, threestakeholders were involved namely the plant manager, aproduction manager and the head of the planningdepartment. During the project, the role of some of thestakeholders changed significantly. At the start of theproject, the plant manager for instance strongly focusedon the reduction of inventory costs by means of a costallocation system. However, after extensive discussionsthe orientation of the project group shifted from a fiercecost control towards a redesign of existing decision-making procedures regarding stock levels and batch sizesand towards a more appropriate exchange of inventory-related information. At the end of the project, somemodules of an ERP system were successfully implementedguided by the production manager and the head of theplanning department.

4.5. Case E

Company E is a medium-sized firm that develops,produces and sells medium voltage systems and mediumvoltage components. The company is active in Europe bymeans of local companies; other countries are served vialocal representatives. On a world-wide scale company E isa relatively small player. Growing markets however, canbe found in Eastern Europe, South–East Asia and theMiddle East. The product range of company E shows ahuge variety of products and includes more than 10,000articles. About 15% of these articles are produced bycompany E, the remaining products are manufactured bythird party suppliers. In 1997 company E initiated aninventory project encompassing both the organisationalsetting of the inventory system as well as planning andinformational aspects. At the start of the project, thecompany used an MRP system which on an overall level

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apparently worked well. Despite the usage of an MRPsystem however, the Board of Management considered theoverall stock levels as too high. At the same time, theavailability of products which were generally consideredas crucial in the company, showed some major short-comings. Because of the complexity of the inventorysituation, many stakeholders were involved in the project.Some of the main stakeholders were the Board ofManagement, a procurement manager, the head of theproduction department, a representative of the planningdepartment, an Information System Manager and a SalesManager. During the project which lasted more than 18months, the focus of the project shifted several times.Ultimately, the project leader who was also the head ofthe IS department redefined the inventory project into anICT project. This shift of focus was supported by the Boardof Management and ultimately resulted in a modificationand implementation of some specific inventory moduleswhich were successfully integrated into the MRP system.

5. Discussion of the case studies

The five inventory projects studied show a rather broadrange of different inventory situations, aim and scope ofthe projects as well as of the final outcome of the projects.It is tempting to describe and analyse the flow of events ofeach inventory project in detail to unfold the process ofreshaping the inventory system and the influence differ-ent stakeholders had on this reshaping. In this section wewill restrict ourselves however, to an overall assessmentof how the projects were affected by the interests of thestakeholders. Furthermore the outcome of the projects isaddressed. We will start our discussion by exposing theareas covered by the projects.

5.1. Areas covered by the projects

As already mentioned in Section 2, inventory systemsnormally include a physical infrastructure, a planning andcontrol setting, a set of organisational arrangements aswell as a (management) information system. Although notall areas need to be covered by inventory projects, acareful assessment of each area as well as of the linkagebetween these areas can be considered crucial whenreshaping inventory systems (e.g. de Vries, 2005). It isinteresting to note that in all companies that were studiedseveral of these areas were included in the projectproposal. However, only company C explicitly addressedthe linkage and interrelationships between the areaswhen initiating the project by suggesting an integralapproach. The other companies mainly focused onimproving their management information system and onupgrading the inventory planning in order to reduce costs.It is furthermore interesting to note that during the courseof the projects, the focus of almost all projects haschanged significantly. Only the project group in companyC held on to their initial project goals. This projecthowever was cancelled by the Board of Management aftermore than 1 year. Apparently, two reasons contributed tothe abortion of the project. First of all, the Board of

Management felt, the outcome of the project probablywould not meet the reduction of cost objectives formu-lated at the start-up of the project. Moreover, the Boardsuspected the existence of an imbalance between poten-tial cost reductions and the required efforts necessary toachieve these reductions. The second reason for abortingthe project however, strongly related to the politicalcontext of the project. All attempts of the project teamto improve the allocation of authorities and responsibil-ities regarding the inventory management system and tointegrate inventory control more heavily into the produc-tion planning resulted in a political battle between Salesand Logistics. This political battle was founded in theconflicting interests and a lack of trust between the SalesManager and the Logistical Manager.

5.2. Involvement of stakeholders

As can be concluded from our case data, differentgroups of stakeholders were involved in the inventoryprojects. In almost all cases, a production manager (casesA, B, D, E) and a sales manager (cases A, B, C, D, E)participated in the project. Depending on the organisa-tional setting of the inventory system, furthermore arepresentative of a planning department (cases B, D, E) ora logistical manager (cases A, B) made part of the projectgroup. Only in one case (company E) top management(Board of management) actively participated in theproject. As can be derived from Table 2, the attributes interms of the salience stakeholder theory (power, urgencyand legitimacy) differed between the stakeholders in-volved in the projects. It will be of no surprise thatthe views of the stakeholders differed according to themanagement area they represented. In general, theproduction managers strongly focused on ensuringproduction objectives like optimising batch sizes andprotecting production resources against disturbancesand unpredictable demand. Additionally, in all cases theproduction managers were very concerned about the factthat a change of the inventory system ultimately wouldlead to an increase of rush orders and instable productionplans. In two cases (companies A and B) this point of viewwas supported by the logistical manager (company A)and/or the head of the planning department (company B).The sales managers, on the other hand, showed to have astrong interest in the disposal of relevant and up-to-dateinformation about stock levels (companies B, D, E), clearand well-defined replenishment procedures (companiesA, D) and safeguarding sales and marketing objectives(companies A, B, C, D, E). In four cases (companies A, B, Cand E), top management took a background role and actedas dormant stakeholders. Clearly, they had the power toimpose their will on the other stakeholders but they didin fact not have a legitimate relationship with the otheractors, neither had an urgent claim regarding theinventory system resulting in their power almost beingunused. In company A, top management overruledthe project group and imposed their will on the otherstakeholders only at the end of the project. Just incompany E, the Board of Management was activelyinvolved in the project.

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5.3. The influence of stakeholders on the course

of the projects

The five case studies clearly support the idea thatdifferent stakeholders affect the shaping of inventorysystems in a complex and dynamic way. In none of thecompanies that were studied, the shaping of the inventorysystem was a planned and well-defined process. More-over, during the course of the projects perceptions of thestakeholders on the aim of the project changed anddifferent stakeholders assigned different meanings to thereshaping of the inventory system. In company A forinstance, improving the co-ordination between produc-tion and sales decisions was generally considered themain objective of the project and apparently a strongconsensus existed between the project members aboutthe importance of this objective on improving theperformance of the inventory system. During the courseof the project however, the position of sales changed froma dependent stakeholder into a dominant stakeholder.Consequently, during the project meetings the underlyingagenda of both Production and Sales concentrated onshifting the responsibilities regarding the performance ofthe inventory system to the other party. In fact, neitherProduction nor Sales considered the performance of theinventory system as their responsibility which in itselfresulted in complicated discussions about the criteria thatneeded to be applied for classifying the products intoclasses (e.g. A, B, C classification).

In two companies (companies B and E), the redesign ofthe inventory system was closely linked to the imple-mentation of and ERP/MRP system. Recent research showsthat ‘‘implementation of an ERP is a socially, politicallyand technically complex undertaking that influencesnearly every aspect of organisational functioning and thusaffects the interests of many stakeholders during thevarious stages of the project’’ (Boonstra, 2006, p. 50). Incompany B all stakeholders agreed upon the necessity toreshape the inventory system but because of a powervacuum caused by an insufficient involvement of theManagement Board, a lack of agreement arose on theusefulness of implementing a sophisticated ERP system. Infact three of the four stakeholders (the sales manager, thewarehouse manager and the Head of the planningdepartment), considered a new system not being neces-sarily better. Moreover, it was in their interest to stick tofocusing on the inventory system and not on theimplementation of an ERP system for political andopportunistic reasons. The warehouse manager being adefinitive stakeholder for instance, considered a partialsolution in terms of refining planning procedures, theimplementation of a modified inventory informationsystem and reshaping the organisational setting of theinventory system both for rational reasons as well as forpolitical reasons more suitable to his interests. Contrary tocompany B, in company E the role of the project leader(Head of the IS department) as well as the view of theBoard of Management favoured the modification of theMRP system and the integration of inventory modules intothe MRP system. Both stakeholders, although for differentreasons, stimulated the modification of the MRP system.

The Board of Management, being a dormant stakeholder,associated a refinement of the MRP as a means to controlthe company in a more centralised and integrated way.The Head of the IS department (also being a dominantstakeholder) at the other hand considered a moreintegrated and complete MRP system also as a way tobring the IS department more in the centre of thecompany.

5.4. Results of the projects

Starting from the projects described in Section 4 it canbe concluded that in almost all companies a redesign ofthe inventory system has taken place. Only in company Cthe project was dismantled without making any improve-ments regarding the inventory system. In two companies(companies A and B) the results of the project focused onrefining the organisational setting of the inventorysystem. In these two cases, all stakeholders feel that theperformance of the inventory system ultimately willbenefit from the changes made. Additionally, some ofthe dominant stakeholders involved in the project gavesupport to the conclusion that the changes made regard-ing the organisational embedding of the inventory systemhave lead to a more consistent alignment between theorganisational embedding of the inventory system and theoverall organisational position of influential stakeholders.

It is furthermore interesting to note that in threecompanies (companies B, D and E) significant improve-ments have been made regarding the provision ofinventory-related information. There are some indicationsthat two reasons have contributed to this informationrelated result of the projects. Firstly, from a rational pointof view it can be argued that well-defined, suitableinformation systems will support the stakeholders tomake complex inventory decisions more properly. A largenumber of variables, complex interrelationships, uncer-tain outcomes of decisions and a linkage with differentmanagement areas in other words, require a wellstructured, robust inventory management system. Clearly,the necessity of such a system to enhance integratedinventory decision-making processes was generallyagreed upon in the companies that were studied. How-ever, our case study analyses also give some raise to theidea that by focusing on the informational aspects ofinventory systems, in some cases a political ‘neutraldirection’ of the project was chosen by the projectmembers. The focus as well as the results of the inventoryprojects in other words apparently is a mix of rational,political and opportunistic behaviour of the stakeholdersinvolved in the project.

Finally, analysing the results of the projects shows thatonly company B and to a small extent company Dsucceeded in upgrading the planning and control ofinventories. The question how inventories can be con-trolled more effectively in other words, was only on asmall scale covered by redesigning the content of theplanning and control setting of the inventory system.According to the respondents, the main reason for thislack of attention on the planning dimension of inventoriescan be found in the complexity of the decision-making

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processes. In practice, the companies needed to cope withhuge numbers of stock-keeping products serving manydifferent markets with unique (often uncertain) demandcharacteristics. Reinforced by often opposing interests andhard to understand interactions between productionplanning decisions and decisions on how to meet marketrequirements prevented many of the project groups fromfocusing on the content of inventory planning.

6. Conclusions

Several conclusions can be drawn from our casestudies. Most importantly, our case studies clearlyindicate that the outcome of projects in the area ofinventory management is often heavily influenced by theinterests of different stakeholders. Apparently, decisionsmade during the course of inventory projects are onlypartly based on rational, well-defined, straightforwardapproach. Although exploratory in nature, our case studiesalso suggest that applying the stakeholder salienceapproach might be beneficial when trying to findexplanations for the success or failure of inventoryprojects. The (re)shaping of inventory systems encom-passes many different dimensions like the organisationalsetting of the inventory system, a planning and controlaspect, an information infrastructure and a physicalcontext. Clearly, all these areas can be subjected tonegotiation behaviour between the stakeholders involvedin the (re)shaping process. For project managers it seemsto be important to be aware of the role stakeholders canplay and taking the different views of stakeholders intoaccount maybe be beneficial for projects in the area ofinventory management. Moreover, good project manage-ment goes far beyond the technical aspects of redefiningand reshaping inventory systems and apparently needs toinclude a thorough understanding of attributes like power,legitimacy and urgency as well.

Although our study has been of an exploratory nature,some practical guidelines can be derived from our casestudies. Clearly, these guidelines need to be studied inmore detail because of the limited number of case studieswe performed. Despite this lack of a solid theoreticalbackground, addressing some main practical implicationsof our study seems to be worthwhile however, because itcan frame future research in the area of inventorymanagement. Moreover, the practical implications statedbelow can help managers and project leaders to handleinventory management projects more efficient and effec-tive. To summarise, the following managerial implicationsseems to be worth mentioning

(1)

Often, inventory management projects include manydifferent aspects. Defining the scope of the projectcarefully seems to be a point of importance therefore.Our case studies show that inventory managementprojects often include organisational elements aswell as planning and control aspects. Moreover,inventory management projects often are of a multi-disciplinary nature. Applying a too narrow scope aswell as including too many aspects in the project is

hazardous. Special attention needs to be paid tothe project definition and the scope of the projecttherefore.

(2)

Because of the political dimension as well as of thedifferent aspects related to inventory management,various stakeholders often have different perceptionsof the inventory project. A careful assessment of theseperceptions during the start-up of the project seemsto be beneficial to a positive outcome of inventoryprojects. Our empirical study indicates that compa-nies being aware of the political setting of inventoryprojects as well as of the different perceptions variousstakeholders can have of inventory projects, appar-ently are more able to handle the project properly.Applying a stakeholder perspective during all phasesof the project in other words seems to be a necessarybut not sufficient condition for the success ofinventory management projects.

(3)

Clearly, inventory projects often seem to encompass apolitical dimension. Being aware of this aspect canhelp top management to avoid unnecessary delaysand side-effects of the project. As can be concludedfrom the case studies, in almost all companies severeproject delays were caused by political processes andconflicting interests. Addressing these conflictinginterests and making the political dimension ofinventory management projects explicit probably willhave a significant positive influence on the outcome ofinventory projects.

(4)

The outcome of an inventory project often affects theinterests of the stakeholders over time. This in itselfcan influence the course of the project significantly.Putting this interaction on the project agenda seemsto contribute to a more effective and efficient project.It is suggested by our case studies that top manage-ment needs to be aware of the effects inventorymanagement projects may have on the organisationalsetting of inventory management systems. Resistanceto changing inventory management systems is oftenrooted in altering attributes and relationships be-tween the stakeholders involved in the project. Topmanagement should carefully assess these changesand address them explicitly during the course of theproject therefore.

(5)

Inventory projects are often dynamic of nature due tothe changing role of stakeholders. Handling thisdynamic nature requires an explicit project policy interms of involvement of stakeholders, communicationand decision-making. Our research supports the ideathat a stakeholder perspective needs to be incorpo-rated in the project definition and implementationplan of inventory management projects. Moreover, theprocess dimension of inventory management is oftento a great extent responsible for the ultimate successof the project and needs to be explicitly managedtherefore.

The above-mentioned managerial implications of ourexploratory study are only a first step towards a designmethodology for inventory management systems. Clearly,the challenge of developing this design methodology is to

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integrate content decisions with process knowledge likethe stakeholder salience approach and game theory.Although our case studies have provided us with a morethorough understanding on how the process of (re)shap-ing inventory systems takes place in practice, furtherresearch is required for assessing inventory projects froma stakeholder perspective. Interestingly, only few studieshave addressed the question how the design and im-plementation of inventory systems is affected by differentstakeholders and only a limited number of empiricalstudies are available regarding the question how culturaldifferences, conflicting interests and power relationshipsof stakeholders influence the shaping and implementationof inventory systems. In particular, it seems to beworthwhile to explore the influence of stakeholdersin different settings. We feel that by unravelling thedeterminants that influence the behaviour of stakeholdersand by linking the area of project management, inventorymanagement and organisational theory, a more profoundintegrated body of knowledge will emerge which hope-fully will at the end also lead to more practical tools forinventory management.

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