EFFECT OF INVENTORY MANAGEMENT PRACTICES ON PERFORMANCE OF MANUFACTURING FIRMS IN KENYA: A CASE STUDY OF SAMEER AFRICA

Faith Sang

College of Human Resource and Development,

Jomo Kenyatta University of Agriculture and Technology

P. O. Box 62000, 00200 Nairobi, Kenya.

Dr. Allan Kihara

College of Human Resource and Development,

Jomo Kenyatta University of Agriculture and Technology

Corresponding Author email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

CITATION: Sang, F. & Kihara, A. (2016). Effect Of Inventory Management Practices On Performance Of Manufacturing Firms In Kenya: A Case Study Of Sameer Africa. International Journal of Arts and Entrepreneurship. Vol 5.(10) pp 94-113.

ABSTRACT

The performance of manufacturing firms in Kenya has been unsteady. In the year 2014, while manufacturing output increased by 4.8 percent, agriculture output grew by 15.8 percent, building and construction grew by 13.1 percent , information and technology 12.7percent, transport and storage 13.7 percent among others. These negative trends reflect structural issues such as struggling with low productivity and structural inefficiencies in the supply chains as suggested by firm-level analysis based on data from the Census of Industrial Production and the World Bank’s Enterprise Survey. The study was hinged on the EOQ theory, lean theory, Theory of constraints and Systems theory of Logistics. The primary motivation behind this study was the problem facing performance of manufacturing firms attributed to supply chain. The study sought to establish the effects of inventory management on performance of manufacturing firms. The study specifically sought to establish the effects of inventory Stock takes, inventory information management system, supplier Partnership and lead time management practices on performance of manufacturing firms in Kenya. The research methodology involved collection of primary data through questionnaire. The study employed descriptive study design. The population of the study was 527 employees of Sameer Africa and the sample size was 96 managers and supervisors. The study used a multiple linear regression and correlation analysis to show the relationship between the variables. The study findings indicated a positive and significant correlation between all the predictor variables used and the performance of manufacturing firms. The study also established a positive and significant relationship between the variables and performance apart from inventory stock takes. Based on the study findings the study recommends that more inventory stock taking practices should be embraced by manufacturing firms in Kenya for instance development of new accession registers for stocks to replace the old one, entering the records captured into the automated systems, taking of stock differences at the end of each day, documenting all goods in the store by tracking and reconciling stock frequently. The study also recommends that manufacturing firms in Kenya should encourage more inventory information management practices for example automating inventory management system, ensuring sufficiency of inventory management systems and tools and using e-procurement.

Keywords: Inventory Stock takes, Inventory information management system, Supplier Partnership, lead time management practices, Performance of manufacturing firms in Kenya

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