Industry Report on Inventory Management Challenges at Daraz E-commerce

This industry report examines the inventory management practices of Daraz, a prominent e-commerce retailer. The report begins with an introduction, outlining the methodology, which involves qualitative research using company websites and annual reports. It provides a company background, detailing Daraz's founding, operations, and acquisition by the Alibaba Group. The report defines the aims and objectives, focusing on the role of inventory management in the supply chain and the challenges faced by Daraz. It then describes the products and services offered by Daraz, followed by a literature review that explores inventory management, its integration with supply chain management, and the associated challenges. The report highlights the importance of inventory management for e-commerce businesses, discussing the integration of supply chain management and the need for effective inventory control to address issues like delayed product arrivals and changing customer preferences. The conclusion summarizes the key findings, emphasizing the significance of inventory management in ensuring product availability, optimizing supply chain efficiency, and maintaining a competitive edge in the digital marketplace. The report underscores the importance of integrating product and services to create flexibility and product availability. The report concludes that inventory management plays an effective role within an organization, helping to know the flexibility of the products among the people.

Industry
Report

Table of Contents
INTRODUCTION...........................................................................................................................1
Methodology (Qualitative methodology)....................................................................................1
Company Background.................................................................................................................1
Aims and objectives ...................................................................................................................1
Product and services offered.......................................................................................................2
Literature review.........................................................................................................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Digital marketing is growing and developing rapidly such as online store are emerging
which is convenient and easy to navigate for both customers and business owners. For such
purpose inventory management is necessary weather the business exist online or on physical
location it is always working with warehouse, stockroom or another area(Ashworth,and Perera,
2018). This report is based on Daraz e-commerce retailer who are facing problems in managing
inventory management. Apart from this, identifying aims and objectives , product and services
offered by them in competitive marketplace. Moreover, focusing on Literature review of
inventory management its integration and links in supply chain management with suitable
diagram.
Methodology (Qualitative methodology)
Methodology is the process of collecting information and data for the purpose of making
appropriate business decision(Finkel, 2015). Herein, Daraz are adopting qualitative research
method in collecting relevant information. In this case information is collected from company
website, company's annual report and other sources of internet.
Company Background
Daraz online marketing shopping platform that was founded in South Asian in 2012 by a
German venture capital known as Rocket Internet. It operates on e-commerce platform and
logistic services in Pakistan, Bangladesh, Nepal, Sri Lanka and Myanmar. Later on it was
acquired by well known Chinese e-commerce company named by, Alibaba Group.
Aims and objectives
Aim: “To determine the role of inventory management in supply chain and the issues that
are facing by company in managing its inventories.” A case study on Daraz e-commerce
retailer.
Objectives:
 To determine the concept of supply chain management and inventory management.
 To analyse the issues face by Daraz in managing its inventory and impact of integration
in supply chain management.
 To identify ways by which Daraz can resolve the issues related to inventory management.
1

Product and services offered
The product and services offered by Daraz are electronic devices and appliances, health
and beauty, groceries and pets, home and lifestyle, fashion and accessories, sports and outdoors,
automotive and motorbike etc..
Literature review
As per the views Finkel 2015, inventory management is refers as process of ordering,
storing and using a company's inventory. It consist of raw material, components and finished
product as well as where housing and process of different items. It is one of the most valuable
assets as it help in manufacturing, food service and other inventory intensive sector which help
in delivering core products in competitive market place. On the other hand it is critical too in
bottom line because inventory is major assets that remains an investment until the product is sell
out.
Herein, Daraz are integrating are linking up with supply chain management. Supply
chain management is a network of suppliers, factories, warehouse, distribution centres from
which raw material are acquired, transformed and delivered to customers. Now, a respective
company is coming up with health and lifestyle in the over seas market place of Sri Lanka. In
order to optimise performance, supply chain function which operates with integrated manner.
Moreover, it also face difficulties in dynamic of enterprise from which product do not arrive on
time, production facilities fails or else change in taste of customers or cancel orders. Thus, for
such instance inventory manage is very much useful for an organisation so that they can maintain
their inventory process in an effective manner.
It is also evaluated with coordination problem at both tactical and operational level. This
function is composed of cooperating, intelligent agents as this are performing o9ne or more
supply chain function and coordinating decision with other agents that is described as Logistic
execution system. For such purpose a theory of problem solving that enables agents in their
explore of solution and reason in ant time and manner. Moreover, they can adopt a theory of
agency and support tools that enables an user to build up multi agents system with minimal
programming efforts based upon trusted reusable components. The main aim to the Daraz is
remove problems on inventory management in order to develop a shareable representation of
supply chain knowledge that will help a respective organisation to identify and demonstrate an
appropriate decomposition of supply chain function in an effective manner. Moreover, they can
2

develop an incremental anytime model of problem solving for each functional agent so that they
can provide rapid response for some of the unplanned events. As its main aim is to develop
protocols, strategies and tools of their usage such as communication of information, coordination
of decision and management of change within multi agent environment. Consequently supply
chain management must have coordination and revision of plans and schedules across supply
chain functions(Lee, Bagheri and Kao, 2015). Apart from this it also consist of problem solving
skills which basically influences agents each other behaviour through which communication of
con strains. Where as negotiation occurs when agents develop plans in order to satisfy internal
circumstances of an organisation.
Integration: Business integration is defined as a strategy whose main objective is to
achieve gaol and synchronize information and business culture and objective which is aligned
with business strategy and gaols(Fowlie, Reguant and Ryan, 2016 ). Integration basically
involves in operating earlier in supply chain management it also involves combination of firms
that are involved with the unrelated business activities.
(Source: SUPPLY CHAIN MANAGEMENT, 2019)
Supply chain management: Supply chain management is management of flow of goods
and services that includes all process that transform of raw material into final products. It consist
3
Illustration 1: SUPPLY CHAIN MANAGEMENT

of active streamlining of business supply side activities in order to maximize customer value and
gain competitive advantage in marketplace. Eventually, it represent an efforts of suppliers to
develop and implement supply chain that are as efficient and economical as possible. It consist
of production to product development of information system needed to direct theses
undertakings.
Thus, a respective organisation have integrated their product and services so that they
can create flexibility of their product and services as well as make availability of its product
quality to its potential customers. It it will help a respective organisation to attain gaols and
objectives within stipulated period of time.
CONCLUSION
From the above discussion it has been concluded that digital marketing is emerging at
constraint rate in today's marketplace. Herein, a respective organisation are dealing with e-
commerce activity in different departments in order to have flexibility in their product and
services. Moreover, with the help of integration and supply chain management an organisation is
able to develop their product accessibility in competitive marketplace. Thus, in this manner a
respective organisation is able to attain high level of stability in competitive marketplace by
providing better quality of goods and services to its potential customers. Hence, inventory
management play's an effective within an organisation as it help to know flexibility of their
product among people
4

REFERENCES
Books & Journals
Ashworth, A. and Perera, S., 2018. Contractual procedures in the construction industry.
Routledge.
Finkel, G., 2015. The economics of the construction industry. Routledge.
Fowlie, M., Reguant, M. and Ryan, S.P., 2016. Market-based emissions regulation and industry
dynamics. Journal of Political Economy, 124(1), pp.249-302.
Lee, J., Bagheri, B. and Kao, H.A., 2015. A cyber-physical systems architecture for industry 4.0-
based manufacturing systems. Manufacturing letters, 3, pp.18-23.
Materna, R., Mansfield, R.E. and Walton, R.O., 2015. Aerospace industry report. Lulu. Com.
Clawson, P. and Lee, R., 2016. The Andean cocaine industry. Springer.
Online
SUPPLY CHAIN MANAGEMENT. 2019. [Online]. Available through:
<https://arovent.com/products/sap-erp/aro-erp-industries/supply-chain-management>
5