E-commerce Adoption on Inventory Management for Manufacturing Companies in Nigeria: An Econometric Study

Electronic commerce, otherwise known as e-commerce is increasingly evolving itself into a dynamic force changing the logistics activities within the Nigerian manufacturing industry. Inventory management is an essential element of supply chain management, involving the supervision and control of the order, storage, and utilisation of components essential for production, as well as the management of finished products awaiting sale. The study examined the effect of Business-to-Business E-commerce adoption on inventory management using manufacturing companies in Nigeria under the category of consumer goods as a case study. Inefficient inventory management leading to a rise in costs and a decrease in customer satisfaction level is one of the major challenges encountered by Nigerian manufacturing companies but this can be resolved through the implementation of e-commerce hence the study focussed on inventory management variables which are; inventory accuracy, stockout frequency, inventory turnover rate, demand forecasting accuracy, storage optimisation, inventory holding costs, supplier reliability, inventory audit frequency, obsolete inventory and inventory replenishment. The explosion of e-commerce in the logistics sector has posed a challenge that must be effectively managed to sustain the volume of goods across long distances, the interface between e-commerce and in particular inventory management, for instance via stocks and warehousing has become so important to be overlooked. The study was carried out in Nigeria and the population of the study includes staff of 20 manufacturing companies listed on the Nigerian Stock Exchange as of 2023. A simple random sampling technique was used to select 718 respondents. Data was collected through a structured questionnaire and was analysed using both one-sample t-test analysis and multivariant regression analysis. E-commerce has a positive and significant effect on stockout frequency (P = 0.000), inventory turnover rate (P=0.000), demand forecasting accuracy (P=0.000), storage optimisation (P=0.000), and inventory replenishment (P=0.000). The findings revealed significant improvements in inventory accuracy, reduced stockout frequency, increased inventory turnover rate, and improved demand forecasting accuracy. Evidently, these findings imply that the adoption of e-commerce is essential in optimising inventory management processes and thus recommends that manufacturing companies should further utilise digital tools to enable better forecasting in inventory management and efficient stock handling in order to efficiently track stock levels, enhance demand forecasting and then improve the overall inventory control.