Determinants of Implementation of Inventory Management Practices in Fast Moving Consumer Goods Manufacturing Firms in Nairobi County, Kenya

Abstract

The aim of the study was to establish the determinants of inventory management practices in fast moving consumer goods manufacturing firms in Nairobi County, Kenya. The study focused on 120 FMCG manufacturing firms who were members of Kenya Association of Manufacturers. Statistical Package for Social Science (SPSS) was used to analyse the data. The data showed that the high R square was 0.620. It showed that the independent variables in the study were able to explain 62.00% variation in the implementation of inventory management practices in fast moving consumer goods manufacturing firms in Nairobi County, Kenya.The remaining 38% was explained by the variables or other aspects outside the model. This implied that these variables were very significant and they therefore needed to be considered in any effort to boost implementation of inventory management practices in fast moving consumer goods manufacturing firms in Nairobi County, Kenya. The study recommended that there is need for setting up purchase volumes which is based on usage, urgency and perishability and the guidelines and the level of implementation of procurement practices need to be well articulated. The study established that procurement outsourcing strategies plays a significant role on the implementation of inventory management practices in manufacturing firms. The study recommended for the adoption of supply chain forecasting enhancing implementation of inventory management practices in manufacturing firms. There is need the organization to have the correct forecasting methods thus reduction of stock outs in the organization. The study recommended for the enhancement of manufacturer and supplier collaboration plays a significant role on the implementation of inventory management practices in manufacturing firms. The study recommended for the appraisal of manufacturers and suppliers annually and they ensure the suppliers are paid in time.