Descriptive statistics was used to test the impact of inventory management practices and correlation analysis was used to determine the nature and magnitude of the. Inventory, inventory management practices, performance of production department, manufacturing firms introduction inventories are the stocks of raw materials, work in progress, finished goods and supplies held by a business organization to facilitate operations in the production process pandey, 2005. Inventory management therefore has been defined in many ways by many authors. The results indicate that higher levels of inventory management practice can lead to an enhanced competitive advantage and improved organizational performance. An analysis of the effects of inventory management on the performance of the procurement function of sugar manufacturing companies in the western kenya sugar belt cynthia mito mukopi1, dr. It looks at how food companies have been under pressure to streamline their.
Inventory management for bus and rail public transit systems. Key words supply chain management, performance, competitive priorities. Get the most out of your inventory management system. Performance management and performance appraisal 12.
Specifically, the study intended to assess how inventory control systems and lead time affect organizational performance. The impact of inventory management practice on firms. The impact of effective inventory control management on. Every organization constantly strives to maintain optimum inventory to be able to meet its requirements and avoid over or under inventory that can impact the financial figures. Pdf the impact of effective inventory control management on.
The main objective of the study was to assess the role of materials management on organizational performance. To identify the effect of kenya ferry services strategic ict initiative on inventory control implementation. An effective inventory management improves the firms total performance through matching inventory management practices and a competitive. As expected, these authors defined inventory management based on their perception of the subject matter. Consequently understanding and practicing supply chain management scm has become a mandate to compete and improve supply chain surplus in the global arena 1. Inventory management definition, types of inventory and. Bridging the gap abstract the aim of this paper is to bridge the gap between the organizational effectiveness oe models developed in the field of organizational theory and the performance measurement models presented within the management accounting literature. The effect of inventory management on organizational performance among textile manufacturing firms in kenya enock gideon musau phd. It was found that organizations benefits from inventory control management by way of easy storage and retrieval of material, improved sales effectiveness and reduced operational cost. Inventory management, organizational performance and manufacturing firms. They help manage a businesss inventory and stock items, keeping track of exactly where assets are and what theyre worth. Inventory management and its effects on customer satisfaction. How important is inventory management in an organization.
In phase four, rigorous statistical analysis was used to determine the validity and reliability of the scm practice, competitive advantage, and organizational performance instruments. The effect of inventory management on organizational. Therefore, inventory management approaches are essential aspects of any organisation. Tags effect of inventory management on organisational effectiveness effective production effectiveness of inventory management in a manufacturing company pdf impact of inventory control on profitability of the organization impact of inventory management on organisational performance pdf inventory inventory management and control. The items for these instruments are listed in appendix a. Inventory management, financial performance, return on sales. Prempeh 2015 studied the impact of efficient inventory management on the profitability of manufacturing firms in ghana, using raw material inventory management and profit as variables. Inventory management for bus and rail public transit. Reexamining the relationship between inventory management. The study sought to ascertain the extent at which inventory control affect the productivity of selected manufacturing firms, to determine the nature of. Inventory management, organizational performance and manufacturing firms introduction. The effect of inventory management on organizational performance.
Inventory management systems are important in many industries. An analysis of the effects of inventory management on the. Inventory management practices and performance of consumer. The sales department may argue for a large amount of stock but the. Effective inventory management effective inventory management is the result of outstanding inventory control and inventory management.
Inventory management and its effects on customer satisfaction scott grant eckert1 abstract this study examines inventory management and the role it plays in improving customer satisfaction. Effect of inventory management on organisational effectiveness. The result of the analysis showed that flexibility in inventory control management is an important approach to achieving organizational performance. The impact of effective inventory control management on organisational performance. Jun 20, 2008 lean management is getting more and more attention in todays highly competitive environment. In this context, the aim of this study is to test the hypothesis that efficient lean inventory management leads to an improvement in a firms financial performance. A study on relationship between inventory management and. The impact of inventory management practices on financial performance of sugar manufacturing firms in kenya. In greece, koumanakos 2008 studied the effect of inventory management on firm performance.
Lean management is getting more and more attention in todays highly competitive environment. This study took into consideration the relationship between effective system of inventory management and organization performance in the sevenup bottling company, nile mile enugu. The objective of the study was to assess the impact of information communication technology on inventory systems in the transport organization. Profit maximization is all about cost minimization and revenue maximization. Syed jamal abdul nasir bin syed mohamad, nurul nadia suraidi, nabihah amirah abd. Introduction adequate inventories facilitates production activities and help to customers satisfaction by providing good service. A study on relationship between inventory management and company performance. The study used a cross sectional secondary data designed to test whether there is any relationship between inventory management and firms performance of listed manufacturing firms in ghana. It looks at how food companies have been under pressure to streamline their inventory systems, and the consequences of such actions. An inventory management system also analyzes a businesss inventory needs.
The basic financial aim of an enterprise is maximization of its value. Despite numerous research on inventory management on firm performance, and manufacturing firms contribution to the ghanaian economy, its contextual impact still need much investigation because of lack of clarity and divergent findings. The impact of supply chain management practices on. The impact of inventory management practices on financial. The impact of supply chain management practices on competitive advantage and organizational performance. Today, logistics networks and supply chain are seen as a matter of survival and. Amuhaya mike iravo2 1 master of science in procurement and logisti. Inventory management is the process of ordering, handling, storing, and using a companys noncapitalised assets aka its inventory. Federal agencies have different challenges when defining and measuring results than private sector organizations, whose results are usually tied exclusively to financial goals. The study aims to investigate the impact of inventory management on firm performance of listed manufacturing firms in ghana. Specific objectives however, the study will specifically seek to. Also, competitive advantage can have a direct, positive impact on organizational performance. To determine the effect of on inventory shrinkage organizational performance of kenyatta national hospital.
Eckert 2007 examined inventory management and role it plays in improving customer satisfaction. In order to maximize profits and grow, it is critical that companies work on their inventory management processes. Pdf the impact of effective inventory control management. Thus, organizational performance is one of the most important variables in the management research and arguably the most important indicator of the organizational performance. This study examined the effect of inventory management on firm performance and controlled for key covariate, namely company size, capital size, and industry.
It includes outcomes achieved, or accomplished through contribution of individuals or teams to the organizations strategic goals. Inventory control involves managing the inventory that is already in the warehouse, stockroom or store. For a inventory management to be effective, there must be a system which is managed by a group of employees who are experts in this area. Impact of inventory management on firm performance. Profit of an organization can easily be maximized with the help of an effective inventory management system in places. Presenting this literature in a chronological way may make it is very hard to follow. Organizational performance management focuses on individual employees, as well as on teams, programs, processes, and the organization as a whole. The effect of inventory management on firm profitability and. The effect of inventory management on organizational performance among textile manufacturing firms in kenya, international journal of academic research in business and social sciences, human resource management academic research society, international journal of academic research in business and social sciences, vol. Analyzing the impact of supply chain management practices on. The study of the effects of inventory management on organizational effectiveness in selected organizations in. The general objective of the study is to determine the effect of inventory management practices on organizational performance of health institutions in kenya. Thus the study focuses on how inventory management enhances performance of manufacturing firms in kenya.
Pdf this study examines inventory control and organizational performance, using dansa food limited for study. That is knowing, what products are out there, have much you have each item and where it is. Analyzing the impact of supply chain management practices. Performance management edinburgh business school xi module 11 managing team performance 111 11. The california state performance management handbook is divided into four parts. For some businesses, this involves raw materials and components, while others may only deal with finished stock items ready for sale. A study of 7up bottling company nile mile enugu, nigeria. Analyzing the impact of supply chain management practices on organizational performance through competitive priorities. Unit i performance management the concept performance is understood as achievement of the organization in relation with its set goals. Inventory management is a very important function that determines the health of the supply chain as well as the impacts the financial health of the balance sheet. Competitive advantage and organizational performance are concepts that have been operationalized in the existing literature. The effect of inventory management on firm performance. Thus the study focuses on how inventory management enhances. The term performance encompasses economic as well as behavioural outcomes.
The early attempts of empirical research in scm have been limited at developing instruments capable of measuring scm practices. The researchers were motivated to embark on this study, in order to. Pdf the effect of inventory management on firm performance. Therefore, the focus of this study is achieving profitability through effective management of inventory with emphasis on procurement, receipt of materials, holding and ordering costs, inventory control, and foreign currency for import. The right software program in this regard will provide you with a variety of features to boost up inventory utilization. A study of 7up bottling company nile mile enugu, nigeria, authorann i. He found a positive relationship between customer satisfaction and supplier partnerships, education and training of employees, and technology.
Supply chain candidate jomo kenyatta university of agriculture and technology, school of entrepreneurship, procurement and management, nairobi, kenya professor. The purpose of this study was to investigate inventory management practices and organizational productivity in parastatals in kenya. Importance of inventory management systems bizfluent. The importance of inventory management in an organization is vast. The effect of inventory management on firm profitability. Instruments that measure competitive advantage and organizational performance were adopted from zhang.
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