The effect of inventory management on performance of manufacturing firms; Case study: Crown Beverages Limited

Abstract

This study considered inventory management as the independent variable and organizational performance as the dependent variable. The specific objectives of the study were; To identify inventory management systems used at Crown Beverages Ltd. Company Uganda, To examine the effect of inventory planning on performance of Crown Beverages Ltd. Company Uganda, To determine the effect of inventory management systems on performance of Crown Beverages Ltd. Company Uganda and To examine the effect of inventory turnover on performance of Crown Beverages Ltd. Company Uganda The study used a case study research design with quantitative and qualitative research techniques using a total sample size of 70 respondents. Data was collected using self-administered questionnaires and face to face interviews. It was observed that the Crown Beverages Limited uses vendor managed inventory, Fixed Order Quantity, Limited uses Just in Time, ABC method and Fixed Period Ordering as inventory management systems in order to minimize losses and maximize profits. It was also exposed that inventory planning has encouraged optimal quantity and timing of inventory, it has created forecasts to determine how much inventory should be on hand to meet consumer demand and it has also been used to generate higher profits and manage cash flow. From the study it was also discovered inventory management systems have increased on the efficiency, productivity, manage inventory levels and they have made everything from inputting information to taking inventory. It was also observed that inventory turnover has enabled the company to effectively measure the number of times inventory sold or used in a time period such as a year and it has brought decreased operating expenses, and increased asset turnover. Finally, it is recommended that The Management of Crown Beverages Limited-Pepsi should appoint a team of qualified employees to conduct inventory management. This will help the organization to avoid inefficiencies, damages and issues of overstocking. Inventory management should also be given priority as it is influential in relation to performance of the company. This means that policies and procedures should be set which are supposed to be followed by the company employees.