Introduction Maternal, newborn, and child health is a global priority, while most countries in sub-Saharan Africa have a poor implementation of maternal, newborn, and child health programs. Objective To assess inventory management practice and associated challenges of maternal, newborn, and child health life-saving drugs in public hospitals of Jimma zone and Jimma city. Methods Hospital-based mixed-method cross-sectional study was conducted from October 1 to 30, 2020. The quantitative data was collected using physical inventory and document reviews. Thus, seventy-eight bin cards and annual report and resupply forms were reviewed, and the collected data was analyzed using SPSS |Version 24| software. Statistical significance was determined at p < 0.05. Twelve semi-structured in-depth interviews were conducted to collect qualitative data and analysed manually using a thematic analysis technique. Results About half of the evaluated drugs experienced 22 stock-outs per year with a stock-out rate and mean stock-out duration of 83.3% and 1.69 months, respectively. All hospitals placed at least one emergency order. The wastage rate of products was 13.1%. The data quality of report and resupply forms such as the average data accuracy of 396 (84.61%) had a significant association with the increasing level of education, X 2 (16, N = 13) = 297.7, p = 0.019. Thirty-five (97.22%) reports and resupply forms were complete, while 24 (66.67%) of them were submitted to suppliers as per the predetermined timeline with an annual reporting rate of 94.44%. Conclusion Data quality of bin card records was more promising than report and resupply form reports. All hospitals encountered at least one stock-out and one emergency order per year. The wastage rate was twice more than the national normal. Storage management, human asset, and capacity building challenges were identified as inventory management challenges.