JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 683 The Relationship Between Inventory Management Practices. Inventory Efficiency, and Supply Chain Information on the Business Performance of Indonesian MSMEs Bryan Aubrey 1*. Cindy Patricia. Glent Febrian 1. Gregorius Bagas Yogiswara 1. Yenny Suvena 1. Rudi Prasetyo Ardi 1 Universitas Bina Nusantara Article Info Article history: Received 6 January 2026 Revised 9 January 2026 Accepted 12 January 2026 Keywords: Business Performance. Inventory Leanness. Inventory Management Practices. Supply Chain Information ABSTRACT This study aims to analyze the effect of Inventory Management Practices. Inventory Efficiency (Inventory Leannes. , and Supply Chain Information on the Business Performance of MSMEs in Indonesia. This study employs a quantitative approach using explanatory research design. Data were collected through an online questionnaire distributed to 73 MSME owners across different regions in Indonesia using purposive sampling. The research instrument was developed based on established indicators for each variable and measured using a Likert scale. Data analysis was conducted using SPSS, including validity and reliability tests, multiple linear regression analysis, coefficient of determination (RA). F-test, and t-test to examine both simultaneous and partial effects among variables. The results indicate that Inventory Management Practices. Inventory Efficiency, and Supply Chain Information simultaneously have a significant effect on MSME Business Performance. The coefficient of determination (RA) value of 612 suggests that 61. 2% of the variation in business performance can be explained by the three independent However, partial testing reveals that Inventory Management Practices do not have a statistically significant effect on Business Performance . = 0. , despite showing a positive relationship. In contrast. Inventory Efficiency . = . and Supply Chain Information . = 0. have a significant and positive effect on Business Performance. These findings suggest that the ability of MSMEs to maintain lean and efficient inventory levels, along with fast, clear, and transparent supply chain information flow, contributes more substantially to business performance improvement than inventory management practices when implemented independently. This is an open access article under the CC BY-SA license. Corresponding Author: Bryan Aubrey | Universitas Bina Nusantara Email: bryan. aubrey@binus. Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 684 Introduction Micro. Small, and Medium Enterprises (MSME. represent a sector that makes a significant contribution to the Indonesian economy. More than 99% of business actors in Indonesia come from the MSME sector, making it the largest contributor to national employment. However, despite their strategic role. MSMEs continue to face various operational challenges, particularly in inventory management and supply chain management. These challenges often hinder business performance and reduce the ability of MSMEs to compete in an increasingly competitive market. One of the main problems frequently experienced by MSMEs is suboptimal inventory Many business owners still rely on manual record-keeping, lack clear demand planning, and do not have adequate stock control systems. This condition leads to two common issues: overstock and stock-out. Overstock causes business capital to be tied up for long periods, increases storage costs, and raises the risk of product damage. Meanwhile, stock-outs can result in lost sales opportunities and decreased customer satisfaction. This phenomenon indicates that proper Inventory Management Practices are essential for the smooth operation of MSMEs. In addition to inventory management practices. Inventory Efficiency or inventory leanness is also a crucial factor for the sustainability of MSMEs. Inventory efficiency refers to the ability of a business to maintain lean stock levels, avoiding excess inventory while still meeting customer demand. Efficient inventory management can improve capital turnover, reduce operational costs, and prevent waste. Conversely, inefficient inventory management can disrupt cash flow, reduce productivity, and increase the risk of losses for MSMEs. In the modern business era, the operational performance of MSMEs is also strongly influenced by the quality of information flow within the supply chain. Slow, inaccurate, or non-transparent information from suppliers can lead to delivery delays, quantity mismatches, and difficulties in inventory planning. Many MSMEs still rely on simple communication tools such as WhatsApp, phone calls, or text messages. Although easy to use, these methods often result in miscommunication and do not provide sufficient historical data. In contrast, effective information flow enables MSMEs to plan inventory more accurately, avoid excess stock, and improve responsiveness to changes in market demand. Therefore. Supply Chain Information plays a vital role in enhancing business performance. The phenomena described above indicate that challenges in inventory management and supply chain uncertainty remain real issues faced by Indonesian MSMEs. At the same time, increasingly intense business competition requires MSMEs to be more efficient, adaptive, and responsive to market needs. Effective inventory management, efficient product distribution, and smooth information flow within the supply chain can be key determinants of MSMEsAo success in achieving optimal business performance. Therefore, research on the Relationship between Inventory Management Practices. Inventory Efficiency, and Supply Chain Information on the Business Performance of Indonesian MSMEs is important to conduct. This study is expected to provide a deeper understanding of the role of these three variables in improving MSME performance and to Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 685 assist business owners in designing more effective and competitive operational strategies in the modern competitive era. Literature Review and Research Framework Inventory Management Practices Inventory management practices are an essential part of a companyAos operational activities, as they determine the smooth flow of goods supply, cost efficiency, and the companyAos ability to meet customer demand. Inventory is even considered a core management function that determines operational success and supply chain efficiency. As stated by Munyaka and Yadavalli . in Simanullang et al. AuInventory is a central management function that directly determines operational success and supply chain efficiency. Ay In the context of this study, inventory management practices are measured using four core indicators that reflect how companies manage inventory in practical terms. The theoretical review for each indicator is presented as follows. Inventory Planning According to Onyango and Mungai . , planning is part of the organizing process that ensures inventory can meet demand without causing excess or shortages. Inventory planning is also supported by methods such as the Economic Order Quantity (EOQ) model (Triagustin & Himawa. , which helps determine the most optimal purchase quantity to minimize holding and ordering costs. Without proper planning, companies are prone to understock and overstock conditions, which can ultimately disrupt operational activities. Inventory Inflow & Outflow Recording Accurate inventory recording is a critical component in ensuring that stock data aligns with the physical condition of goods in the warehouse. Haslindah et al. emphasize that accurate record-keeping is an integral part of good inventory management practices. Recording inventory inflows and outflows is necessary to monitor product movement in real time, prevent stock recording errors, and provide reliable information for inventory replanning and stock control. Stock Quantity Control Stock control is closely related to the concept of efficiency. According to Awheda . in Onyango and Mungai . , inventory management practices involve methods aimed at minimizing costs while still meeting requirements in terms of quality, quantity, time, and place. Stock control can also be supported by techniques such as ABC analysis (Pratiwi, 2. , which classifies inventory based on value priority and helps focus control efforts on high-value items. Reorder According to Heizer and Render . , various techniques such as EOQ and Just in Time (JIT) play an important role in determining the appropriate timing and quantity for Just in Time (JIT), for example, emphasizes ordering goods only when Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 686 needed to reduce waste and avoid excessive inventory accumulation (Agha, 2013 in Goo et al. , 2. Inventory Leanness Inventory efficiency or inventory leanness is a concept that has developed in modern inventory management and focuses on how companies can maintain optimal inventory levels without creating waste or reducing their ability to meet customer demand. According to Liu. Li, and Yang . , inventory leanness describes a condition in which inventory is maintained at an ideal level, allowing companies to avoid holding costly excess stock while also minimizing the risk of stock shortages. This concept originates from the principles of lean manufacturing, as explained by Hofer. Eroglu, and Hofer . , which emphasize waste reduction, faster inventory turnover, and improved financial efficiency. In this study, inventory efficiency is measured using four indicators that represent the extent to which companies can maintain inventory levels efficiently. The theoretical explanation for each indicator is presented as follows. Inventory Level Limitation According to Hofer et al. , maintaining inventory at a minimal yet safe level can increase inventory turnover and improve a firmAos financial performance. Liu et al. add that inventory limitation must always consider demand forecast accuracy so that companies can meet customer needs without holding stock beyond their capacity. Frequency of Stock Accumulation According to Megaventory . , stock accumulation represents a nonAevalue-added activity, as idle inventory only increases holding costs, raises the risk of product damage, and slows capital turnover. Hofer et al. emphasize that excessive stock accumulation hinders financial efficiency and reduces supply chain flexibility. Management of Excess Inventory (Dead Stoc. Pramudya . explains that companies should conduct periodic evaluations of unsold inventory to determine appropriate actions, such as discounting, bundling, returning products to suppliers, or product elimination. Megaventory . further notes that lean techniques such as Kanban and demand planning can minimize the occurrence of dead stock by ensuring that inventory replenishment is more controlled and demand-driven. Replenishment Scheduling Liu et al. emphasize that accurate replenishment scheduling depends on precise demand forecasting, as forecasting errors can trigger stock-outs or excess inventory. Under lean principles, inventory replenishment is conducted based on a pull system, where orders are placed only when they are truly needed (Megaventory, 2. Duman et al. state that the digitalization of inventory systems strengthens replenishment scheduling through real-time data, enabling firms to respond to demand quickly and in a measurable manner. Supply Chain Information Supply chain information is one of the key components in the success of modern supply chain systems. The supply chain itself refers to the processes and networks that move Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 687 products from the acquisition of raw materials to the delivery of finished goods to end Huda. Hartati. Moch Jerry, and Lutfi . add that the supply chain is an important element that helps companies enhance competitiveness, maintain quality, reduce costs, and improve process accuracy and responsiveness. These benefits can only be achieved when the information flowing along the supply chain is fast, clear, transparent, and In this study, supply chain information is measured using four indicators that represent the quality of information flow between businesses and their suppliers. Speed of Information Receipt In modern supply chain management, information speed is critical because supply chains face limited buffers, long cycle times, and the risk of delays (Garcya & Garcya, 2. Delayed information can lead to production disruptions, inaccurate inventory planning, and the accumulation of unfulfilled demand. Information Clarity Information clarity relates to the level of detail, completeness, and accuracy of information provided by suppliers regarding orders and product conditions. Marcinekova and Sujova . emphasize that effective coordination can only occur when the information communicated is clear and reliable. Transparency of Delivery Status Delivery transparency becomes increasingly crucial when supply chains face risks of delays or instability in raw material supply. According to Arianto and Pondaag . , a lack of clarity regarding delivery status can cause serious disruptions to production, especially during periods of high consumer demand. Two-Way Communication between Businesses and Suppliers/Distributors Two-way communication enables active information exchange between companies and their suppliers. Not only do suppliers provide information, but companies can also communicate specific needs, constraints, and requests. Strong partnerships and integrated information-sharing systems (Arianto & Pondaag, 2. allow supply chains to operate more efficiently and responsively. Business Performance Business performance represents the accumulation of outcomes resulting from activities carried out within the company itself. In this study, business performance is measured using four indicators that describe how an MSME performs in managing and operating its Customer Satisfaction Business performance, particularly in MSMEs, is strongly influenced by customer According to Indrasari . in Muhtarom et al. , satisfying customer needs is the aspiration of every company. It is not only a critical factor for business survival but also contributes to the enhancement of competitive advantage. When customers are satisfied with MSME products, business performance growth is more likely to occur in line with this satisfaction. Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 688 Sales Target Achievement Sales targets are essential for determining the direction and objectives of a business. this context, sales targets can be used to measure the level of business performance that a firm aims to achieve. According to Safitri . , a sales target is the predetermined quantity of goods or services that must be sold by a company. Profit Growth According to Auliyah and Saleh . in Suhar et al. , achieving optimal financial performance requires effective organizational management. A firmAos financial performance provides important data for tax calculation, asset management, and strategic decision-making. Operational Efficiency Operational efficiency influences the performance of MSMEs in carrying out their business processes. Improved operational efficiency is aligned with increased profitability, which positively impacts MSME performance. According to Porawouw . in Prasetyo and Darmayanti . , operational efficiency has a significant positive effect on profitability. Methodology This study employs a quantitative research design with an explanatory research approach. This approach is used to explain the relationships and effects between the independent variables. Inventory Management Practices. Inventory Leanness, and Supply Chain Information, on the dependent variable, namely the Business Performance of MSMEs in Indonesia. Quantitative research is selected because it allows for objective measurement and enables hypothesis testing through statistical analysis. The population of this study consists of Micro. Small, and Medium Enterprise (MSME) owners operating in Indonesia. The sampling technique used is non-probability sampling with a purposive sampling method, in which respondents must meet the following criteria. - MSME owners operating in Indonesia. - Businesses that conduct inventory management activities as part of their operations. - Willingness to complete the research questionnaire. The study was conducted online by distributing questionnaires to MSMEs across Indonesia. Data collection was carried out within a period determined by the researcher, resulting in a total of 73 valid respondents. Data analysis was conducted using SPSS software and consisted of the following stages: Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 689 Reliability Test Reliability was assessed using CronbachAos Alpha. An item is considered reliable if the Alpha value is greater than 0. Validity Test The validity test was used to determine whether each questionnaire item accurately measures the intended variable. An item is considered valid if the calculated r-value . is greater than the r-table value at a significance level of = 0. Multiple Linear Regression Analysis This analysis was used to examine the effect of each independent variable on the dependent variable. Coefficient of Determination (RA) The coefficient of determination measures the extent to which all independent variables jointly explain the variance in the dependent variable. F-Test (Simultaneous Tes. The F-test was conducted to determine the simultaneous effect of the three independent variables on MSME business performance. t-Test (Partial Tes. The t-test was used to examine the individual effect of each independent variable on the dependent variable. The regression equation used in this study is as follows: ycU = yca yca1 ycU1 yca2 ycU2 yca3 ycU3 yce Y = Business Performance XCA = Inventory Management Practices XCC = Inventory Efficiency XCE = Supply Chain Information a = constant b = regression coefficient e = error term Result and Discussion This study obtained a total of 73 respondents from various regions across Indonesia, allowing the collected data to represent a general overview of MSME practices at the national level. Each respondent was asked to complete a questionnaire based on a Rating scale ranging from 1 to 5, covering four research variables: Inventory Management Practices. Inventory Efficiency . nventory leannes. Supply Chain Information, and MSME Business Performance. Each statement was scored from 1 (AuStrongly DisagreeA. to 4 (AuStrongly AgreeA. All respondentsAo answers were then compiled by summing the scores for each item, both at the indicator level and the variable level. These total scores were used to identify respondentsAo assessment tendencies toward each measured aspect. The score recapitulation Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 690 served as the basis for calculating mean values, standard deviations, and as the main input for further analysis using SPSS with multiple linear regression methods. Through this approach, the respondent data were quantitatively analyzed to examine the relationships and effects of each independent variable on MSME business performance. Table 1. Output of Multiple Linear Regression Test (RA) Source: SPSS Output Version 22, 2025 Table 2. Output of Multiple Linear Regression Test (F-Tes. Source: SPSS Output Version 22, 2025 Table 3. Output of Multiple Linear Regression Test . -Tes. Source: SPSS Output Version 22, 2025 The Role of Inventory Management Practices on Business Performance Table 4. Reliability Test Output for Inventory Management Practices and Business Performance Based on the SPSS output. CronbachAos Alpha values for the Inventory Management Practices and Business Performance variables were 0. 844 and 0. 854, respectively, both exceeding the threshold value of 0. Therefore, it can be concluded that the Inventory Management Practices and Business Performance variables are reliable. Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 691 The SPSS results show that the p-value for the Inventory Management Practices variable is 076, which is greater than the alpha value of 0. 05, and is supported by a t-statistic value of 802, which is lower than the t-table value of 1. Thus, it can be concluded that Inventory Management Practices do not have a statistically significant effect on Business Performance. The regression coefficient for XCA is Oe0. 246 and is not statistically significant . = 0. This indicates that although the coefficient direction suggests a small negative relationship between inventory management practice scores and business performance, the effect cannot be considered significant at the 5% significance level. This finding may indicate several possibilities, such as limited variation or inconsistency in inventory management practices among MSMEs, the presence of mediating or moderating effects . , practices may require support from inventory efficiency or information quality to impact performanc. , or that some inventory management practice indicators may not fully capture the most influential aspects in the Indonesian MSME context. Therefore, although inventory management practices are theoretically important, these results suggest caution: without adequate inventory efficiency and supply chain information support, improvements in practices alone may not directly enhance business performance. The Role of Inventory Efficiency on Business Performance Table 5. Reliability Test Output for Inventory Efficiency and Business Performance Based on the SPSS output, the CronbachAos Alpha values for the Inventory Efficiency and Business Performance variables were 0. 786 and 0. 854, respectively, both exceeding 0. Thus, the Inventory Efficiency and Business Performance variables are considered reliable. The SPSS results show that the p-value for Inventory Efficiency is 0. 009, which is lower than the alpha value of 0. 05, and is supported by a t-statistic value of 2. 672, which exceeds the t-table value of 1. Therefore, it can be concluded that Inventory Efficiency has a statistically significant effect on Business Performance. The regression coefficient for XCC is positive . and significant . = 0. This indicates that higher inventory efficiency, such as leaner stock levels, minimal dead stock, and effective replenishment scheduling, significantly improves MSME business This finding is consistent with lean inventory literature, which suggests that better inventory turnover improves cash flow and reduces holding costs, thereby enhancing financial and operational performance. Practically, focusing on appropriate inventory limitations, managing slow-moving items, and optimizing replenishment schedules can have a tangible impact on business performance. Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 692 The Role of Supply Chain Information on Business Performance Table 6. Reliability Test Output for Supply Chain Information and Business Performance Based on the SPSS output, the CronbachAos Alpha values for the Supply Chain Information and Business Performance variables were 0. 808 and 0. 854, respectively, both exceeding Thus, the Supply Chain Information and Business Performance variables are considered reliable. The SPSS results show that the p-value for Supply Chain Information is 0. 001, which is lower than the alpha value of 0. 05, and is supported by a t-statistic value of 3. 540, which is higher than the t-table value of 1. Therefore, it can be concluded that Supply Chain Information has a statistically significant effect on Business Performance. The regression coefficient for XCE is positive . and highly significant . = 0. This indicates that the quality of information flow, covering speed, clarity, delivery status transparency, and two-way communication with suppliers, is a critical determinant of MSME business performance improvement. This finding supports the argument that information sharing and supply chain coordination enhances inventory decision accuracy, reduces stockouts and overstock, and improves customer satisfaction and productivity. The Global Effect of Inventory Management Practices. Inventory Efficiency, and Supply Chain Information on Business Performance The regression equation obtained is as follows: ycU = 4. 879 Oe 0. 246 ycU1 0. 479 ycU2 0. 553 ycU3 The coefficient of determination (RA = 0. indicates that the three independent variables explain approximately 61. 2% of the variation in business performance, while the remaining variation is influenced by other factors outside the model . , working capital, marketing capabilities, and local market condition. Practically, this implies that interventions in inventory management, inventory efficiency, and information flow have strong potential to improve MSME performance, although they are not the sole determinants. The relatively high RA value confirms that the integration of internal inventory management and external information flow is an important factor influencing MSME competitiveness and operational resilience. These results align with supply chain management and operations management theories, which state that business performance is influenced by structured inventory processes, efficient stock levels, and high-quality supply chain information (Marcinekova & Sujova, 2015. Hofer et al. , 2012. Huda et al. , 2. The F-test was conducted to examine whether all independent variables in the regression model jointly have a significant effect on the dependent variable. The F-test is used to determine whether all independent variables in the regression model jointly have a Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 693 significant effect on the dependent variable. The results of the F-test in this study indicate that the calculated F-value . is greater than the F-table value . , with a significance level . -value = 0. lower than 0. These results indicate that the regression model is statistically significant, the three independent variables collectively influence MSME business performance, and the model is fit to be used as a predictive tool. All independent variables jointly contribute to explaining the variation in MSME These findings support the conceptual framework that MSME business performance in Indonesia is strongly influenced by internal operational practices, inventory management efficiency, and the quality of external coordination through supply chain information. integrated supply chain management approach requires fast information flow, controlled inventory planning, and efficient inventory levels to generate more stable and competitive The F-test results further reinforce the view that these three elements are interrelated and work collectively to enhance MSMEAos operational effectiveness. Conclusions This study aims to analyze the effects of inventory management practices, inventory efficiency, and supply chain information on the business performance of MSMEs in Indonesia. Based on the results of data analysis and discussion, it can be concluded that these three variables simultaneously have a significant effect on MSME business performance, indicating that inventory management and the quality of information within the supply chain are important aspects in improving business performance. However, the effects of each variable do not exhibit the same level of significance. The findings show that inventory management practices do not have a significant effect on MSME business performance. This result indicates that the implementation of inventory management practices among Indonesian MSMEs remains largely operational and administrative in nature, and therefore has not been able to directly enhance business In other words, the existence of inventory management practices alone is not sufficient to serve as a primary driver of MSME performance improvement if it is not accompanied by effective inventory efficiency and adequate information support. In contrast, inventory efficiency is proven to have a positive and significant effect on MSME business performance. This finding confirms that the ability of MSMEs to manage inventory levels efficiently, such as reducing excess stock, managing slow-moving items, and aligning inventory with market demand, directly contributes to improved business performance. addition, supply chain information is also found to have a positive and significant effect on MSME business performance. The availability of accurate, timely, and transparent information enables MSMEs to make more effective decisions regarding inventory planning and coordination with suppliers, thereby enhancing productivity and business The novelty of this study lies in the finding that, within the context of Indonesian MSMEs, improvements in business performance are more strongly determined by inventory Journal homepage: http://w. id/index. php/jiem JOURNAL INFORMATIC. EDUCATION AND MANAGEMENT (JIEM) Vol 8 No 1 . : September 2025 - February 2026, pp. ISSN: 2716-0696. DOI: 10. 61992/jiem. A 694 efficiency and the quality of supply chain information than by formal inventory management This finding contributes to the development of operations management literature by emphasizing the need to shift the focus from merely implementing managerial practices toward strengthening efficiency and information integration as the primary foundations for improving MSME performance. Therefore, this study is expected to serve as a reference for the development of more contextual and adaptive inventory management theories and practices for MSMEs in developing countries. References