Inventory management on organizational production efficiency.

Abstract

The study was set to find out the effect of inventory management on the organizational production efficiency and a case study of Sadolin Paints was chosen. The study was guided with a number of objectives that is to say; to assess the relationship between lead time and production efficiency; to determine the relationship between stock levels and organisational production efficiency and to assess the effect of material usage on the production efficiency of the organisation. The study took a case study design were both qualitative and quantitative data was collected was used basing on both primary and secondary data sources as used in the research study. The study was based on the company staff who belonged to different departments such as production, marketing, procurement and accounting department. The study researcher employed random sampling technique and a sample size of 50 respondents who provided enough reliable information effectively. Findings revealed that lead time is an influential tool towards determining its customer’s behaviors as records are based on to assess the trend, inventory management decisions provide a platform for right quantity orders, time management is also effective and tracking of actual supply is considered effective for each order and delivery. It was revealed that there is a positive correlation between Lead Time and Production Efficiency were a significant relationship (r =0 .708, p 0.01). This means that proper management of lead time enhances production efficiency of the manufacturing firms. Findings further revealed that stock levels of the organization are exercised which secures free from theft, portrays right quantity needed, order time is manageable, stock level values are controlled effective. It was revealed that there is a positive correlation between Stock Level Management and Production Efficiency were a significant relationship (r =0 .882, p 0.01). This implies that proper stock level control and management is an aiding tool in fostering production efficiency. Findings also revealed that the organisations computers its material quantity variance, purchase, right quantities and costs are assessed, variance was explicated as a problem to the manufacturing firm and proper material quantity standards are maintained to keep production efficient and productive.