The Effect of Inventory Management Practices on Operational Performance of Warehousing Firms in Mombasa County

Abstract

The focal point of the study was conducted to determine the effect of inventory management practices in Warehousing firms in Mombasa County. From the early literature, man kept in reserve surplus foods from both the large and small harvests plus carried out animal rearing for catastrophes, emergencies and periods of food scarcity or famine. These foods were stored in elevated food cache. As time passed and new technology was acquired, so was the building of warehouses were introduced (Tompkins, Smith & Jerry, 1998). In the operations of various organisations, a very crucial division is warehousing. Thus ensuring the operational performance in a firm is well catered for. Inventory management as explained by Lavely, 1996 as the active control program that permits to govern its running of the various departments in a firm. This includes the production, research and development (R&D), purchasing, marketing, human resource, accounting and finance. The research design applied was the cross-sectional descriptive census survey of 48 Warehousing firms in Mombasa County. Also correlation survey was applied to show the link between the inventory management variables an operational performance. Data collection was by use of a questionnaire that was deduced by the “drop and pick” method and also e-mail for respondents who were not physically reachable. Cronbach's alpha test was used to test reliability of the questionnaires. This test was to measure internal consistency of the independent variables. According to Cronbach (1951), reliability coefficient of 0.70 is deemed “acceptable". From the results attained, most of the parameters had high internal consistency thus very acceptable. The computerized package that was used to carry out the data analysis was Microsoft excel and SPSS software. The R2, Durbin-Watson analysis, ANOVA analysis, multicollinearity model and multivariate regression analysis was used to determine the correlation between the inventory management practices and operational performance of the Warehousing firms in Mombasa County. The findings are presented in tables. It was clear that there was a significant relationship between inventory management practices and operational performance which was shown by a significance level 0.033 which was less than the 0.05 that was accepted in checking the significance level explained by the three independent variables of inventory management systems, strategic supplier partnerships and information communication technology. The study only focused on the Warehousing firms in Mombasa County. Accordingly, the researcher recommends further research on other firms that are not located in Mombasa County and are not in the Warehousing sector. The researcher has also recommended that all Warehousing firms and other organizations adopt inventory management practices so that they can relish the advantages.