Influence of Inventory Control on Performance of Kenya Vehicle Manufacturers Limited

Abstract

The vehicle assembling firms in Kenya have got a special role in the contribution of gross domestic product (GDP) to the country. The industry strongly influences the entire value chain in both upstream and downstream supply chain activities. Irrespective of this enormous influence, the complexity of business transactions, technological advances, globalization, speed of product cycles and the overall pace of change have made vehicle assembling firms in Kenya face unprecedented phenomenon. As a result of this backdrop, most of the organizations have also experienced uncertainties both in operational and transactional activities. Supply chain continues to have massive drawbacks such as logistical difficulties and operational challenges. These aspects paves way to non-performance outcomes that results to lack of progress in creation of profit margins and meeting customer requirements which turns out to be the impediments to any successful organization. Such alterations have completely made most of the supply chains to embrace better supply chain practices that can have possible influence on performance of motor vehicle assembling firms in Kenya. This study focused on the influence of inventory control on performance of Kenya Vehicle Manufacturers Limited. A descriptive research survey was used in the formulation of knowledge on the influence of inventory control on performance of Kenya vehicle manufacturers limited and provided solutions to areas that needed improvement. The target population for the study was 150 employees working at Kenya vehicle manufacturers limited. The researcher used stratified random sampling method since the target population was heterogeneous. To this extent therefore, the sample size was derived using Slovin’s formula n ꞊ N÷1+N (e2 ). A five-point Likert scale questionnaire was administered to the sample chosen. Both descriptive and inferential analysis was done using SPSS version 22. The study found out that inventory control, positively and significantly influence the performance of Kenya vehicle manufacturers limited. The correlation between inventory control and performance of Kenya vehicle manufacturers was significantly strong and positive with R= 0.734, P= 0.00˂0.05. This implied that when the firm embraces inventory control the performance improves positively making the firm to have a competitive edge. The study also showed that, a unit improvement in inventory control would lead to a 0.163 increase in the performance of Kenya vehicle assembling firms in Kenya. The study concludes that inventory control systems are considered to be key pillars towards performance of motor vehicle assembling firms. The study recommends that motor vehicle assembling firms should embrace inventory control in totality so as to achieve considerable performance. To add on that, the study recommends that the firm should revert from conventional inventory control metrics to modern performance indicators in order to have a competitive edge in the market. Further, the study recommends that a well-structured inventory blue print should be incorporated in the firm’s policy framework in order to ensure a seamless inventory management in the holistic motor industries in Kenya.