Kiplagat Kennedy Kimaiyo
Jomo Kenyatta University of Agriculture and Technology
Mr. George Ochiri
Jomo Kenyatta University of Agriculture and Technology
CITATION: Kimaiyo, K. K. & Ochiri, G (2014). Role of Inventory Management on Performance of Manufacturing Firms in Kenya – A case of new Kenya Cooperative Creameries. European Journal of Business Management, 2 (1), 336-341.
ABSTRACT
The past 15-20 years have seen an increase in research focusing on operational issues relating to supply chain management. Most of the research has been related to multi-echelon inventory models. The general objective of this study was to examine the role of inventory management on performance of manufacturing firms in Kenya. The specific objectives of the study were to determine how inventory management cost reduction affects performance of manufacturing firms in Kenya, to assess how the use of inventory control systems affects performance of manufacturing firms in Kenya, to investigate how lead time affects performance of manufacturing firms in Kenya and to establish how supplier demand affects performance of manufacturing firms in Kenya. The study population was 500 respondents. The sample size of the study was 83 respondents. A descriptive research design was used in this study. Quantitative data was analyzed by employing descriptive statistics and inferential analysis using statistical package for social science (SPSS). The data was then presented using frequency distribution tables, bar charts and pie charts for easier understanding. The study concluded that holding stocks and ordering costs may increase the performance of an organization, cost reduction helps in preparing employees towards managing the inventory ideology, that cost reduction equips organization with sufficient resources and that inventory cost reduction helps in achieving profitability objective. Inventory control system, organizational development, information sharing and channels relationships affect the performance of the manufacturing firms. The study recommended that improved anticipation of future developments in manufacturing firms in Kenya will improve their performance. The study further recommended that unified data gives firms the information integrity and should be used. IT is a competitive tool in organizations for realizing its corporate competitive strategy.
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