Effect Of Inventory Control Systems On Operational Performance Of Tea Processing Firms: A Case Study Of Gianchore Tea Factory, Nyamira County, Kenya

Abstract

Literature on supply chain management and firm's operational performance indicate increased need for improved quality of operations. Tea processing firms face problems of fluctuating inventories, inaccurate forecasts and low utilization of inventories due to inadequate coordination of operations. The existing literature indicated that not all inventory control systems were necessarily best for application in given firms. The purpose of the study was to assess the effect of inventory control systems on operational performance of tea processing firms with a focus on Gianchore tea factory. Objectives of the study were to: Determine the effect of material requirement planning on operational performance, establish the influence of continuous replenishment on operational performance, establish the extent to which distribution resource planning influence operational performance and the effect of vendor managed inventory on operational performance of Gianchore Tea Factory. The study target population was 119 respondents consisting of one (1) factory manager, sixteen (16) middle level managers, thirty six (36) factory supervisors and sixty six (66) employees working at Gianchore tea factory. Purposive sampling and stratified random sampling techniques were applied to select a sample of fifty five (55) respondents for this study. The main data collection instrument was a structured questionnaire. Quantitative data was analyzed using descriptive and inferential statistics, and regression analysis to assess the association between the variables in the study. The findings of this study are expected to be beneficial to the management of tea processing firms to improve their operational performance and also inform policy makers. The study findings will contribute towards academic paradigms and fill the gap between researched work and unresearched areas. The expected outcome in this study is that there can be a significant correlation between the use of inventory control systems and operational performance of a tea processing firm.