Strategic Inventory Management and Operational Performance of Small-Scale Manufacturing Companies in Nigeria.
This study determined the level of awareness of inventory management at operational level among small-scale manufacturing companies in Nigeria and examined the availability and applicability of inventory management tools in the small-scale manufacturing companies. It also determined the best method of managing inventory among small-scale manufacturing companies, and examined the effect of strategic inventory management on operational performance of small-scale manufacturing companies in Nigeria. These were with view to provide information on the strategic inventory management and operational performance among small-scale manufacturing companies in Nigeria The study adopted a descriptive survey design, and used primary data to obtain necessary information from selected firms. The population size included 331 small-scale manufacturing organizations situated in Lagos. A simple random technique was used to select 31 firms from the population. Copies of questionnaire were administered on 220staff in production, marketing and administration departments of the selected organisations.Data collected were analyzed with descriptive statistical tools like tables, and weighted average. Chi-square statistical tool was used to test the hypothesis formulated for this study. Findings showed that there is awareness of inventory management practices among small-scale manufacturing companies with weighted mean of 4.32 (in a scale of 1-5, with 1= Never and 5= Always). The administration, production, and marketing staff departments are familiar with inventory management tools such as two-way bin, ABC, EOQ, quantity discount, and EPLS models. The level of agreement on usage of inventory tools like two-way bin, ABC, EOQ, quantity discount, and EPLS models among small-scale manufacturing companies was ascertained with weighted mean of ( = 1.28), ( = 1.38), ( = 1.63), ( = 1.71) respectively. Strategic inventory policies adopted by the small-scale manufacturing companies affect their operational performance variables like production cost, product quality, material wastage, delivery time, and customer satisfaction. Findings also showed that firms that have stock-taking policy had increasing operational performance index with average mean of 3.53 (in a scale of 1-5, with 1= Decreasing Steadily and 5= Increasing Steadily), and firms that did not have stock-taking policy had a static operational performance index with average mean of 2.81. The Chi-square result showsthat there is significant relationship (,t = 21.226, c = 63.51, P< 0.05) between strategic inventory management and operational performance among small-scale manufacturing .The study concluded that strategic inventory management is one of the feasible and viable strategies for improving operational performances among small-scale manufacturing companies through the use of inventory management tools, and policy.