EFFECTS OF INVENTORY MANAGEMENT SYSTEMS ON PERFORMANCE OF MANUFACTURING COMPANIES IN ELDORET TOWN, KENYA
Abstract
This study examined effect of inventory management systems on performance of manufacturing companies in Eldoret Town, Kenya. A cross sectional research design was used. Manufacturing companies’ staff benefited to know the contributions of inventory management systems and how it enhances effectiveness and efficiency of inventory in manufacturing companies. It also benefited them to know the challenges faced in the adoption of inventory management systems and how to improve the performance of the manufacturing company. The study found out that Material Requirement Planning (MRP) affects manufacturing companies performance in Eldoret Town, Kenya with p=0.048. It was reported that Distribution Resource Planning (DRP) System affects performance of manufacturing companies in Eldoret Town, Kenya with p=0.000. It was found that Vendor Managed Inventory (VMI) system affects performance of manufacturing companies in Eldoret Town, Kenya with p=0.000. In addition the study revealed that Just in Time (JIT) System affects performance of manufacturing companies in Eldoret Town, Kenya with p=0.000. The study concluded that manufacturing companies benefit from adoption of inventory management systems. The study recommended that the management of manufacturing companies need to adopt proper inventory management systems in order to reduce operation costs such as holding costs, ordering costs among others hence increasing company performance. The management of manufacturing companies need to train employees on how to use the inventory management systems in order for them to understand how it operates efficiently and effectively hence increasing firm performance; and the supply chain department needs to provide policies and rules to govern the inventory management systems in order to protect the system.
Keywords: Inventory Management Systems; Performance of Manufacturing Companies; Material Requirement Planning (MRP); Distribution Resource Planning (DRP) System; Vendor Manage Inventory (VMI) System; and Just in Time (JIT) System.
CITATION: Ngugi, E. N., Kimutai, G., & Kibet, Y. (2019). Effects of inventory management systems on performance of manufacturing companies in Eldoret Town, Kenya. The Strategic Journal of Business & Change Management, 6 (2), 1431 –1345.
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DOI: http://dx.doi.org/10.61426/sjbcm.v6i2.1195
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