INFLUENCE OF INVENTORY MANAGEMENT ON PERFORMANCE OF THE PRIVATE COMMERCIAL BANKS IN KENYA
DOI:
https://doi.org/10.47941/ijscl.215Keywords:
inventory control techniques, information technology, warehouse management system, inventory cycle countingAbstract
Purpose: The goal of the study was to examine the influence of inventory management on performance of private commercial banks in Kenya, with an aim of making recommendations on proper use of inventory management practices.
Methodology: This research study adopted a descriptive research design approach. The researcher preferred this method because it allowed an in-depth study of the subject. The target population was all the 220 procurement officers in the private commercial banks in Kenya. From the three strata, a sample of 142 respondents was selected using simple random sampling. Data was collected using self-administered questionnaires. The data collected was analyzed by use of descriptive and inferential statistics. Multiple regression model was used to show the relationship between the dependent variable and the independent variables.
Results: In regard to information technology, the regression coefficients of the study show that it has a significant influence of 0.752 on performance of private commercial banks. Second in regard to warehouse management system, the regression coefficients of the study show that it has a significant influence of 0.156 on performance of private commercial banks.With regard to the third objective, the regression coefficients of the study show inventory cycle counting has a significant influence of 0.06 on performance of private commercial banks. Lastly, in regard to the fourth objective, the regression coefficients of the study show warehousing management system has a significant influence of 0.02 on performance of private commercial banks.
Conclusion: The findings of the study concluded that information technology, inventory control techniques, inventory cycle counting and warehousing management system have a positive relationship with performance in private commercial banks.
Policy recommendation: the study recommended that private institutions should embrace inventory management practices so as to improve their performance and further researches should to be carried out in other private institutions to find out if the same results can be obtained.
Downloads
References
Abdifatah, H. M. (2012). Supply chain management practices and their impact on performance among humanitarian organizations in Kenya. An MBA Research Project Submitted to the University of Nairobi.
Arrowsmith, S., & Quinot, G. (2013). Public procurement regulation in Africa. Cambridge, UK: Cambridge University Press.
Arrowsmith, S., Linarelli, J. & Wallace, D. (2010). Regulating Public Procurement: National and International Perspectives. Kluwer Law International
Berg, J. (2009). Rethinking Technical Cooperation – Reforms for Capacity Building in Africa, Development Alternatives Inc
Birchogo, M. J & Ochiri, G. (2015). Factors Affecting Implementation of Inventory Control Systems in Manufacturing Industries in Kenya. International Journal of Human Resource and Procurement, 4 (4), 1-12.
Brealey, R.A., Myers, S.C. & Marcus, A.J. (2009). Fundamentals of Corporate Finance. London, McGraw-Hill Irwin
Buxey, G. (2016). “Reconstructing Inventory Management Theory”: International Journal of Operations and Production Management, 26(9), 996 -1012
Byaman, A. & Bell, E. (2013). Business Research Method, Oxford University Press, New York.
CBK, (2014). Directory of Commercial Banks and Mortgage Finance Companies. Central Bank of Kenya (CBK).
Chan, C. K., & Lee, H. (2015). Successful strategies in supply chain management. Harrisburg, Pa: Idea Group.
Chen, H., Frank, M., & Wu, Q. (2015). U.S. retail and wholesale inventory performance.
Cooper, D.R & Schindler, P.S. (2013). Business Research Methods (8th ed) McGraw-Hill: New York
Gachon, G. & Fisher, M. (2010). Supply Chain Inventory Management and the Value of Shared Information: Management Science Journal, 46(8), 1032-1048.
Gitman, L.J. (2013). Principles of Managerial Finance Brief: Boston, Addison-Wesley Series
Gunasekaran, A. (2013). Agile manufacturing: The 21st century competitive strategy. Oxford: Elsevier.
Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring corporate strategy. Harlow: Financial Times Prentice Hall.
Kannan, G., Grigore, M.C., Devika, K., & Senthikumar, A. (2013). An analysis of the general benefits of a centralized VMI system based on the EOQ model. International Journal of Production Research, 51(1), 172-188.
KBA, (2011). Supporting the developing of inclusive financial markets in Kenya: Financial sector deepening. FSD Kenya 2011 Annual Report
Kimutai, G. (2010). Factors affecting inventory management in Kenya’s Public sector, focusing on KISE in Nairobi; unpublished Thesis University of Nairobi
Koumanakos, D.P. (2008). “The Effect of Inventory on Firm Performance”, International Journal of Productivity and Performance Management, 5(7), 32-45
Lyson, K. (2016). Purchasing and Chartered Institute of Purchasing and Supply, London: Pitman Publishing.
Mamiro, R. G. (2010). Value for Money, The Limping Pillar in Public Procurement.
Markland, J. (2014). “Centralized Inventory in a Two Level Distribution System with Passion Demand”. Leeds School of Business, International Journal of Physical Distribution and Logistics Management, 3(4), 23-56
Mattson, S.A. (2009). “Inventory Control in Environments with Short Lead Times”, International Journal of Physical Distribution and Logistics Management, 3(7), 19-30
McLaren, T.S., Head, M. & Yuan, Y. (2014). “Supply chain management information systems capabilities: an exploratory study of electronics manufacturers”, Information Systems an e-Business Management, 4(2), 207- 222
Ming-Ling, C., & Shaw, W. (2015). A Roadmap for E-Business Implementation. Engineering Management Journal, 17(2), 3-13
Muiruri, G. (2015). The effects of outsourcing logistics services on operational efficiency in manufacturing industry: case study of Del Monte Kenya Ltd, 2(16), 291-316
Nicosia, N., & Moore, N. Y. (2016). Implementing purchasing and supply chain management: Best practices in market research. Santa Monica, California: Rand.
Nyeko, P. K. (2014). Procurement Processes and Performance: Efficiency and Effectiveness of the Procurement Function.
Oso, Y. & Onen, D. (2015). A general Guide to Writing Research Proposal and Report. Kisumu: Options Printers and Publishers.
Otieno, J. (2014). Procurement activities in public institutions. Unpublished thesis. Jomo Kenyatta University of Science and Technology, Kenya
Otto, A. & Kotzab, H. (2014). “General Process Oriented Management Principles to Manage Supply Chains: Theoretical Identification and Discussion”, Business Process Management Journal, 1(3), 12-32
Oyuke, O.H., & Shale, N. (2014). Role of Strategic Procurement Practices on Organizational Performance; A Case Study of Kenya National Audit Office County. European Journal of Business Management, 2(1), 336-341.
Pawlak, M. & Malyset, E. (2008). “A Local Collaboration as the Most Successful Co-Ordination Scenario in the Supply Chain”, Journal of Industrial Management and Data Systems, 1(8), 23-45
Pedersen, T. (2014). Orchestration of the global network organization. Bingley, U.K: Emerald.
Qu, Z. & Brocklehurst, M. (2003). ‘‘What will it take for China to become a competitive force in offshore outsourcing? An analysis of the role of transaction costs in supplier selection’’, Journal of Information Technology, 18(1), 53-67
Robert, G. (2010). Transaction-Cost Economics: Past, Present, and Future? Scandinavian Journal of Economics, April 13, 2017.
Rolfstam, M. (2013). Public procurement and innovation: The role of institutions. Northampton, Mass: Edward Elgar Pub.
Rudzki, R. A., & Trent, R. J. (2011). Next level supply management excellence: Your straight to the bottom line roadmap. Ft. Lauderdale, FL: J. Ross Pub.
Sandelowski, M. (2010). Combining qualitative and quantitative sampling, data collection, and analysis techniques in mixed‐method studies. Research in nursing & health, 23(3), 246-255
Sari, K. (2008). Inventory in Accuracy and Performance of Collaborative Supply Chain Practices, Journal of Industrial Management and Data Systems, 7(6), 108-118
Schmidt, R. (2009). “Information Sharing Versus Order Aggregation Strategies in Supply Chains”, Journal of Manufacturing Technology Management, 5(2), 804–816
Seleim, A. (2009). Knowledge Management and Organizational Performance in Egyptian Software Firms. International Journal of Knowledge Management, 3(4), 29-48.
Shiati, M., Kibet, Y., & Musiega, D. (2014). Determinants of Supplier Selection on the Performance of Public Institutions in Kenya. International Journal of Management Research & Review
Silver, E.A. (2008). “Inventory Management – An Overview, Canadian Publications, Practical Applications and Suggestions for Future Research”, INFOR Journal 4(6), 15-28
Simeka, O. (2016). Influence of supplier development on procurement performance in the banking sector in Kenya: a case of Barclays bank. International Journal of Innovations, Business and Management. 1(7), 20-36
Smaros, J, Lehtonen, J., & Holmstrom, J. (2013). ‘The Impact of Increasing Demand Visibility and Inventory Control efficiency”, International Journal of Physical Distribution and Logistics Management
Sushma, V., & Phubesh, S. (2009). Effect of working capital management policies on corporate performance an empirical study. Global Business Review
Talluri, S., Cetin, K. & Gardner, A. J. (2009). “Integrating Demand and Supply Variability Into Safety Stock Evaluations”, International Journal of Physical Distribution and Logistics Management
Tanskanen, K. & Holmstrom, J. (2009). ”Vendor Management Inventory in Construction”, International of Productivity and Performance Management
Tarus, T.T (2015). Effects of strategic procurement on competitiveness of commercial banks operating in Kenya: A case of Standard Chartered Bank Limited Kenya. Journal of Business and Management, 17(2), 77-89
Tokar, T. & Williams, D. (2008). “A Review of Inventory Management Research in Major Logistics Journals in Themes and Future Directions”, International Journal of Logistics Management
Wad, P. (2008). The Development of Automotive Parts Suppliers in Korea and Malaysia: A Global Value Chain Perspective. Asia Pacific Business Review, 14(1), 47–64.
Wambui, M. (2010). Analysis of Outsourcing at Kenya Armed Forces, Unpublished MBA Project, and University of Nairobi
Wanyama, J. (2013). The effectiveness of the Procurement Regulations in Kenya. Nairobi: Pr Academics Press.
Waweru, S. (2010). The effects of inventory levels and stock outs on procurement performance at Kenya Forestry Research Institute’; unpublished Thesis University of Nairobi
William, B. (2008). Entrepreneurship in Economic Theory. American Economic Review
Wong, K.Y., & Aspinwall, E. (2014). Characterizing knowledge management in the small business environment. Journal of Knowledge Management, 8(3), 44-61.
Downloads
Published
How to Cite
Issue
Section
License
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
