Inventory Management and Sustainable Performance of State Corporations in Kenya

Abstract

Purpose: The purpose of this study was to examine the effect of inventory management on sustainable performance of state corporations in Kenya.
 Methodology: The descriptive research design was applied in carrying out the study. The respondents of the study included the heads of finance and procurement department in all 187 state corporations in Kenya. Census was used in this study where the head of procurement department and the head of finance in each state corporation that resulted to 374 study respondents. This study used a questionnaire as the main research tool to collect primary data. Descriptive analysis and inferential analysis was carried out which was made possible through the use of Statistical Package for Social Sciences (SPSS) version 26. 
 Findings: Inventory management significantly affected the sustainability of state corporations in Kenya at p<0.05. This shows that upholding inventory management would be essential in steering the sustainable performance of the state corporations. The regression model established that the R value was 0.633 while the R2 was 0.401 which indicated that the variability of the inventory management on the sustainable performance of the state corporations in Kenya could be explained by up to 40.1% of the model and the P-value was 0.000<0.05. This implies that the model was fit to determine the relationship between the inventory management and sustainable performance and therein make conclusions and recommendations.
 Unique contribution to theory, practice and policy: While the existing inventory management theory used in this study was validated, the study recommends that the accounting as well as procurement officer in each state procuring entity need to ensure that all proper stock levels are kept as per the regulation through proper verification and processing of all requirements, adhering to prescribed stock policies in the Regulation and ensuring that they duly consider safety stock and lead time when replenishing to ensure appropriate stock levels are kept at all time. The study recommended that public procuring entities policy makers need to establish a policy framework to expedite effective adoption of best inventory management systems to facilitate sustainable performance.

Impact of Inventory Management on Financial Performance of MSMEs in Santiago City

“…Despite this, the owners/managers of MSMEs generally perceive their inventory management as efficient, indicating a level of confidence in their processes. This finding supports the previous studies which emphasized the significance of accurate inventory records, the adoption of technology, qualified human resources, and the utilization of various inventory management techniques such as JIT, FIFO, ABC analysis, EOQ, and VMI (Cvetkovic, 2022;Gatari et al, 2022;Hedrick et al, 2008;Hugos, 2018;Islam et al, 2019;Khan & Siddiqui, 2019;Kumar & Garg, 2017;Mulandi & Ismail, 2019;Namusonge et al, 2015;Patterson et al, 2010;Prajogo & Olhager, 2012;Smith & Johnson, 2019;Viloria & Robayo, 2016;Wang et al, 2017). Evidence supports the second research question, which states that MSMEs are operationally efficient (M=3.96, SD=0.12).…”

“…The survey questionnaire is divided into four sections. Part one is the inventory management scale adapted from the study of Gatari, Shale, and Osoro (2022) and Orobia, Nakibuuka, Bananuka, and Akisimire (2020). The questionnaire consists of 16 items with a Likert scale of 1 as Strongly Disagree, 2 as Disagree, 3 as Neutral, 4 as Agree, and 5 as Strongly Agree.…”

“…It has been acknowledged that keeping accurate inventory records and using efficient inventory control strategies are crucial. It is also found that state firms adopted technology less readily than other industries in inventory management, which may impact how well they manage their inventories (Gatari et al, 2022). Similarly, Khan and Siddiqui (2019) assert that effective inventory management does not treat every product similarly; instead, it utilizes control and analytical techniques by the relative economic relevance of each good.…”