INFLUENCE OF INVENTORY MANAGEMENT SYSTEMS ON PERFORMANCE OF SOFT DRINKS MANUFACTURING FIRMS IN KENYA
Abstract
There has been a question for management about the efficiency of inventory management procedures in place resulting from inconsistencies of inventory levels leading to various weaknesses like losses that come as a result of over, under-stocking, expiry inventory, failure to meet targets and low morale of the company members. As a result, the company’s stores are overcrowded making the work of a store-keeper difficult, late issue of materials to the department and these in turn result into poor inventory service delivery. This study examined the influence of inventory management systems being the independent variable on the performance of soft drinks manufacturing firms being the dependent variable. The specific objectives of the study assessed the influence of Material Requirement Planning in firm’s performance, determine the influence of Just in Time on firm’s performance, and examine the influence of Vendor Managed inventory on firm’s performance and to explore the influence of bar coding on firm’s performance. The research used descriptive research design. The target population for the study was 455 employees in the soft drink manufacturing firms in Kenya. The study population was soft drinks manufacturing firms registered by Kenya National Bureau of Statistics (KNBS) 2016 and respondents designated heads of supply chain of these firms. A sample population of 213 was selected by using Slovin’s fomula. Questionnaires were administered through both e- mails and hand delivery. Secondary data were obtained from both published and unpublished records. Questionnaires were tested for both reliability and validity. Qualitative and quantitative techniques were used to analyze data with the assistance of SPSS software program version 22. A good response rate of 63% was realized. It was established that most of the inventory management systems indicators have positive impact on performance of the firm. The study further adopted a regression analysis to determine the relationship between the variables at 5% confidence level of significance. The study findings showed that the four variables had a significant influence on performance of the firms.
Key Words: Material Requirement Planning, Just in Time, Vendor Managed Inventory , Bar Coding , Inventory Management
Full Text:
PDFReferences
Achuora, J. O., Guyo, W., Arasa, R. and Odhiambo, R., (2015), Effect of Green Supply Chain Management Practices on the Performance of Manufacturing Firms in Kenya, Ph.D (SCM). Dissertation .Jomo Kenyatta University of Agriculture and Technology: Kenya
Akindipe, O. S. (2014). Inventory Management – A Tool for Optimal Use of Resources and Overall Efficiency in Manufacturing SMEs. Journal of Entrepreneurship Management and Innovation, 10(4), 93-113
Anichebe, N. A. & Agu, O. A. (2013). Effect of Inventory Management on Organizational Effectiveness. Information and Knowledge Management, 3(8), 92 – 100
Cronbach, L. (1951). Coefficient alpha and internal structure of tests: Psychometrika, 16,
-334
Kootanaee, A. J., Nagendra, B. & Hamidreza, F. T. (2013). Just-in-Time Manufacturing
System: From Introduction to Implement. International Journal of Economics, Business and Finance, 1(2), 07 – 25
Koumanakos, D. P. (2008). The Effect of Inventory Management on Firm Performance.
International Journal of Productivity and Performance Management, 57(5), 355-369
Mahidin, F., Saad, R., Mohd, N. M. & Yusoff, R. (2015). The Influence of Inventory
Management Practices towards Inventory Management Performance in Malaysian Public Hospitals. International Academic Research Journal of Business and Technology, 1(2), 142-148
Miller, R. (2010). Inventors Control: Theory and Practice. New Jersey: Prentice Hall.
Ogbo, A. I & Onekanma I.V. (2014) “The Impact of Effective Inventory Control
Management on Organizational Performance”: Mediterranean Journal of Social Sciences, MCSER Publishing ,Rome-Italy, Vol. 5 No 10 June 2014
Olhager, J. (2013). Evolution of operations planning and control: from production to supply chains. International journal of production research.
Mungu, S. (2013).Supply chain management practices and stock levels of essential drugs in public health facilities in Bungoma East Sub County, Unpublished Research Project, University of Nairobi, Nairobi
Navon, R., &Berkovich, O. (2006).Anautomated model for materials management and Control, Construction Management and Economics, 24(6), 635-646.
Onyango, A. (2011). Supply Chain Management Practices and Performance in Cement Industry in Kenya, Unpublished MBA Project, University of Nairobi School of Business, Nairobi
Orodho, A. (2003). Elements of Education and Social Sciences, Research Methods, Gaborone, Botswana, Mozila Publication, 221-231.
Palevich, R. (2012). The lean sustainable supply chain: how to create a green infrastructure with lean technologies, Pearson Education, Inc., London
Porteus, E. (2008). Stochastic inventory theory, Journal Operations Research and Management Science 2, 605-652
Sandeep, K. (2007). Supply chain management: New Trends and Strategies, Infosys.
Schonberger, R. (2008). Supplier partnering contributes and supply chain performance: a deeper look. Hoboken, New Jersey, USA: Published by John Wiley & Sons Inc.
Shapiro, J. (2009). Modeling the supply chain (2nd ed.). Cengage, USA: Cengage Learning
Silver, A. (2007).Inventory management: University of Calgary, Haskayne School of Business, Calgary
Song, J. &Zipkin, P. (2011). Inventory control with information about supply condition, Management Science 42, 1409-1419
Stewart, G. (2005). Supply chain performance benchmarking study reveals keys to supply chain excellence, Logistics Information Management, 8 (2), 38-44
Water, D. (2013).Global logistics and distribution planning: strategies for management (4th edition), Kogan Page Limited, London
Watson N. & Zhang Y. (2005) Decentralized serial supply chains subject to order delays and information distortion, Manufacturing and Service Operations Management 7, 152-168
Watson, N. (2010). Strategic supply chain planning & the role of forecasting, Research Associate, CTL, MIT
Wisner, T. & Leong, G. (2011). Principles of supply chain management: A Balanced Approach (3rd Edition), USA
DOI: http://dx.doi.org/10.61426/sjbcm.v5i4.989
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.