VENDOR MANAGED INVENTORY ON FINANCIAL PERFORMANCE OF FLOUR PROCESSING SMEs IN NAIROBI CITY COUNTY, KENYA
VENDOR MANAGED INVENTORY ON FINANCIAL PERFORMANCE OF FLOUR PROCESSING SMEs IN NAIROBI CITY COUNTY, KENYA
Charles Njoroge Ng’ang’a - Master of Business Administration (Finance Option) of Kenyatta University, Kenya
Dr. Geoffrey Mbuva - Kenyatta University, Kenya
ABSTRACT
Small and Medium Sized manufacturing firms involved in processing flour play a key role in mitigating food insecurity issues in most of the economies. Be it developed or emerging ones. However, the Nairobi City County based flour processing Small Medium Enterprises (SME) has not been exempted from declining financial performance in addition to other small firms over the years. Therefore, this inquiry aimed at determining the influence of vendor managed inventory on financial performance of flour processing SMEs in Nairobi County, Kenya; To underpin this investigation, the researcher considered twofold theoretical viewpoints, namely; lean inventory theory and economic order quantity theory. This inquiry incorporated descriptive survey research design to develop the research problem. The 18- Nairobi City County based flour processing Small Medium Enterprises (SME) is the size of the populace selected for the purposes of achieving the study’s main objective with the corresponding 18 top officials of the aforementioned SMEs being used as the unit of observation. Further, it should be noted that since the populace was dismal, the researcher planned to rely on survey methodology for data collect purposes. The whole process of collection of the data aforementioned was based on a drop and pick approach whereby structured questionnaires were used as the tool for that purpose. The research findings portrayed that vendor managed inventory had statistically significant influence on the financial performance of flour processing SMEs in Nairobi City County, Kenya. Majority of the respondents were of the opinion that firms should direct their efforts toward adopting advanced forecasting tools and data analytics, leveraging these technologies to gain better insights into customer demand patterns, ultimately reducing the risks associated with shortages or excessive inventory. The study recommendations were as follows; comprehensive inventory management studies that explore the combined impact of various strategies, including JIT, EOQ, and lean inventory, on financial performance should be conducted. The studies would provide insights into the synergies and trade-offs between these practices. Comparative studies would assess the effectiveness of different inventory management strategies, taking into account their combined application. These studies can help businesses identify the most effective combinations of strategies for their specific contexts.
