INFLUENCE OF INVENTORY MANAGEMENT PRACTICES ON ORGANIZATIONAL COMPETITIVENESS: A CASE OF SAFARICOM KENYA LTD
Kamau Lucy Wangari - Master of Science in Procurement and Logistics of Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Assumpta W. Kagiri - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
In order for an organization to survive and be effective in meeting their market demand, the organization must be cognizant of its supply chain management for better performance and sustained survival. The reason of carrying inventory management practices is to ensure regular supply of materials as and when required. A robust inventory management is required to be in place to ensure timely delivery and quality standards are observed. For organizations to survive they need to embrace the changing competitive trends in the market. The general objective of the study was to assess the influence of inventory management on organizational competitiveness, with particular focus on Safaricom Ltd Kenya. The specific objectives of the study were to determine the effects of inventory shrinkage, inventory investment and inventory turnover on competitiveness of Safaricom Ltd. A descriptive research design was used in this study. The target population comprised of Safaricom Kenya Ltd senior personnel in the following departments; Finance division, customer care, supply and administration, commercial (sales and marketing) department. The study targeted personnel in those departments as they are better placed to answer questions relating to inventory control and the company’s competitiveness. The target respondents included the 103 management staffs from the Company’s Head Offices in Nairobi. Stratified random sampling was applied where a sample was calculated using Fishers Formula. This generated a sample of 80 respondents. The study collected primary data using a questionnaire with both open ended and closed ended questions and administered using drop and pick later method. The quantitative data that was obtained from the questionnaires were coded and keyed into statistical package of social science (SPSS) analysis software. Both descriptive and inferential statistics were utilized to analyze the results interpreted in terms of percentages and means score and presented in tables and figures. The study found that inventory shrinkage, inventory investment and inventory turnover affects the competitiveness of Safaricom Ltd. The study concludes that inventory management practices are very vital to the competitiveness of organizations. As such, inventory management practices affect profit maximization, customer satisfaction, market share growth and product quality targeting return on investment, Inventory shrinkage, inventory investment and inventory turnover affects the competitiveness of Safaricom. To avoid carrying of excess inventory that might be a risk to the Company, accurate forecast, (supply & demand) should be in place. The management of Safaricom Ltd needs to modernize its inventory management system to increase efficiency. To curb various challenges in the Company, Safaricom should consider implementation of a vendor managed inventory to lower incidences of stock-out situations, increase the levels of customer services and reduce costs due to an increase in inventory turnovers and a decrease in the levels of safety stock and greater transparency in supply chain management.
