EFFECT OF INVENTORY MANAGEMENT PRACTICES ON PERFORMANCE OF COMMERCIAL STATE CORPORATIONS IN KENYA
Charles Makau Mulandi - Masters Students, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Noor Ismail - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
The increased forces of competition at the market place and globalization have meant that firms need to come up with the best way for survival hence inventory management. It is estimated that about 60-70% of the overall funds of firms in the manufacturing concern are tied up and represented by the values of the current asset and out of this, inventory takes up a largest portion. Organizations including commercial state corporations are faced by various challenges including excessive built up of inventories that increases tied up capital which limits investment in alternative channels, poor efficiency and effectiveness. The study sought to determine the effect of inventory management practices on performance of commercial state corporations in Kenya. The specific objectives of the study were; to determine the effect of just-in-time inventory system on performance of commercial state corporations in Kenya and to assess the effect material requirement planning on performance of commercial state corporations in Kenya. The study adopted a descriptive research design and the 33 commercial state-owned enterprises were targeted. A total of 33 supply chain managers or their equivalent from these state-owned enterprises formed the study population. A census was adopted and thus the sample size comprised of 33 respondents. The study collected primary data using questionnaires and the analysis of the collected data was done using descriptive and inferential statistics. The findings were presented using tables and figures. The study established that just-in-time inventory system and material requirement planning have positive and significant relationship with performance. The study concludes that inventory management has positive and significant relationship with the performance of commercial state corporations in Kenya. The study recommends to the management of all commercial state-owned enterprises in Kenya to invest more resources in enhancing the functionalities of their JIT systems and MRP systems.
