INVENTORY MANAGEMENT STRATEGY AND PERFORMANCE OF MANUFACTURING FIRMS IN KENYA

Oscar Barasa Awory, Dr. Denis Chege, Dr. Eric Namusonge

Abstract


In developed and some emerging economies, push and pull strategies have been shown to be an important means for sustaining competitive advantage for all successful industries and businesses. However, despite the clear benefit of inventory management strategy, most of manufacturing firms are still experiencing challenges in their performance. Thus, the main objective of this study was to establish the effect of inventory management strategy on the performance of manufacturing firms in Kenya. This study was guided by Stochastic Inventory Model. Cross-sectional research design was adopted. The KAM 2023 directory has listing of members (firms) by sectors, which contains a register of 13 sectors of those in manufacturing firms spread all over the country. The population of this study was 1032 manufacturing firms in Kenya from which a study sample of 288 respondents was selected using Yamane formula. The study used purposive sampling to select senior managers from production and Supply Chain management. Primary data was obtained from the respondents using a self-administered questionnaire. On the other hand, secondary data was obtained from relevant published records, journals, magazines, and newspapers among other public sources. Pilot study was conducted with 10% of the sample size. Data analysis was conducted using descriptive and inferential analysis with the aid of the statistical package for social science. Descriptive analysis was presented using means and standard deviation. The study concluded that inventory management strategy has a positive and significant influence on the performance of manufacturing firms in Kenya. The study recommended that firms should focus on implementing effective inventory management strategies such as accurate demand forecasting, efficient inventory control, and optimized inventory levels. This can help reduce costs, improve customer satisfaction, and enhance overall firm performance.

 

Key Words: Inventory Management Strategy, Performance of Manufacturing Firms


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