Inventory Management Practices And Supply Chain Performance Of Construction Firms In Nairobi

Abstract

Inventory management practices have gained recognition in today’s businesses in order to deliver products and services that customers want to a great level of excellence, to keep inventory costs at minimum and to enhance supply chain performance. The study sought to determine inventory management practices employed by construction companies in Nairobi and to establish the effect of inventory management practices on supply chain performance. The descriptive research design was employed. Stratified sampling was used. The study used a questionnaire to gather data, out of 370 questionnaires distributed to respondents only 309 questionnaires were completely filled and returned back. SPSS helped to analyze data. Descriptive statistics were used in determining the inventory management practices adopted by construction firms in Nairobi. Correlation and multiple regression analysis were carried out to establishing the effect of inventory management practices on supply chain performance. The results of this study were that construction firms in Nairobi adopt inventory management practices which include vendor managed inventory, economic order quantity, just in time, and material requirement planning and that these practices positively affect supply chain performance of construction firms in Nairobi. Inventory management practices explained 69.8%(R2= 0.69.8) of the variation in supply chain cost of construction firms in Nairobi, 58.6% (R2= 0.586) of the variation in supply chain flexibility of construction firms in Nairobi, 53.8% (R2= 0.538) of the variation in supply chain reliability of construction firms in Nairobi, and 73.9% (R2= 0.739) of the variation in asset utilization of construction firms in Nairobi. The research concluded that inventory management practices positively impact supply chain performance of construction firms in Nairobi. The study recommends that firms in other sectors to adopt inventory management practices in managing their inventories. The study investigated four inventory management practices, future studies should consider to examine other inventory management practices which were not examined in this study.