INFLUENCE OF INVENTORY MANAGEMENT PRACTICES ON PERFORMANCE OF FAST-MOVING CONSUMER GOODS MANUFACTURERS IN NAIROBI COUNTY, KENYA

Abstract

Inventory management practices play a vital role in minimizing costs and maximizing profits, also meeting customer demands by making sure there is enough stock at the right quantity, quality and available at the right time and the right place. To make sure inventory is managed properly, there needs to be adoption of inventory management systems. This study sought to establish the influence of inventory management practices on performance of fast-moving consumer goods manufacturers in Nairobi County, Kenya. This study adopted a descriptive research design for the purpose of accessing the study’s general intent. The target population was 51 fast moving consumer goods manufacturers in Nairobi County. The study focused on the logistics managers and IT managers of the 51 FMCG manufacturers located in Nairobi as the unit of observation where a census will be conducted on them. Hence a total of 102 respondents was sampled. The study used self-administered questionnaires. Primary data was collected through the administration of questionnaires to respondents.   A pilot study was conducted in order to establish the validity and reliability of data collection instruments . The analysis of the data was guided by the research objectives. The study brought up both qualitative and quantitative data. To analyze this data descriptive statistics used by use of questions that are close ended. Pearson R correlation was used to measure strength and the direction of linear relationship between variables. Multiple regression models was fitted to the data in order to test how far the independent variables affect the dependent variable. From the study findings it was found that lead time, top management support, supplier evaluation and e-procurement and performance of fast-moving consumer goods manufacturers have an association. From the finding the study recommends that factors that cause lead time variability need to be addressed with a view of managing the variability as influence the performance of first moving consumer goods manufacturer. There is need   for the manufacturers to find ways of reducing lead time variability so that lead time can be managed. There should be improvement of relationships with suppliers. The management of fast-moving consumer goods manufacturing companies needs to adopt proper inventory management practices  in order to reduce operation costs such as holding costs, ordering costs among others hence increasing company performance.