EFFECT OF INVENTORY MANAGEMENT PRACTICES ON SUPPLY CHAIN PERFORMANCE OF COUNTY GOVERNMENTS IN WESTERN REGION, KENYA

Abstract

Inventory management is the responsibility of the entire organization and it’s very critical to both county and national government growth and success. The focal point of the study was to establish the effect of inventory management practices on supply chain performance of county governments in western region, Kenya. Specific objectives of the study were to evaluate the effect of economic order quantity on supply chain performance, investigate the effect of vendor managed inventory system on supply chain performance, examine effect of just in time on supply chain performance and finally the effect of lean inventory practices on supply chain performance. The study was conducted in the county governments of western region, Kenya which included Kakamega, Busia, Bungoma and Vihiga after having carried out a pilot study in Kisumu County. The study was guided by four theories which included, Economic order model theory, the Network theory, Just –in time theory, and lastly Lean inventory theory. The study adopted descriptive survey research design. Reliability was tested using Cronbach’s alpha while validity ensured through content validity. The study employed Census approach where all 120 staffs from, procurement, stores and quality assurance departments were selected using purposive sampling techniques. Data was obtained using structured questionnaires. Descriptive statistics was tested through the use of mean, percentages and standard deviations while inferential statistics tested through the use of simple linear regression, Pearson correlation and multiple regression. Data was presented using tables, charts, and graphs. SPSS version 24 was used to aid in the data analysis. The results of simple linear regression established that economic order quantity had a positive and significant effect on the supply chain performance (β= 0.762; p< 0.000). secondly, vendor managed inventory system was positively and significantly affecting supply chain performance (β = 0.845; p < 0.000). in addition, just –in time was positively and significantly affecting supply chain performance ' (β =0.693; p < 0.001) and lastly, lean inventory practices positively and significantly affect supply chain performance of county governments in western region, Kenya (β = 0.834; p < 0.001). Multiple regression results showed that inventory management practices influences supply chain performance. The study therefore recommends that county governments adopt proactive attitudes towards the issue of proper inventory management practices as well as avoids the dangers that are inherent in keeping too little or too much of stock .The results would provide an input for future academic works to be conducted on counties and other institutions on performance. the study would help the government institutions and other various organizations to highlights inventory management methods that need major emphasis as regarding performance of an organization, it would provide an insight into the inventory management practices attributes that would guide the current and future made policies as well as providing a contemporary cornerstone for implementation of more inventory management practices for improved performance in county governments in western region, Kenya as well as other Counties that faces similar problem of inventory management practices.