Inventory Management Practices and Operational Performance of Manufacturing Firms in Ghana
Richard Kofi Opoku *
Department of Business Studies, College of Distance Education (CoDE), University of Cape Coast, Cape Coast, Ghana.
Helen Mawuena Fiati
Department of Business Studies, College of Distance Education (CoDE), University of Cape Coast, Cape Coast, Ghana.
Gregory Kaku
Department of Business Studies, College of Distance Education (CoDE), University of Cape Coast, Cape Coast, Ghana.
Joseph Ankomah
Department of Marketing and Supply Chain Management, University of Cape Coast, Cape Coast, Ghana.
Faustina Opoku- Agyemang
Department of Audit, Ghana Revenue Authority, Accra, Ghana.
*Author to whom correspondence should be addressed.
Abstract
Aims: The study examined the effect of different inventory management practices on the operational performance of manufacturing firms in Ghana.
Study Design: The study adopted the descriptive survey design.
Place and Duration of Study: The study was conducted among manufacturing firms within the Accra, Tema and Kumasi metropolises in Ghana between November 2019 and February 2020.
Methodology: The study randomly sampled 152 Procurement and Operations managers and officers from 246 registered manufacturing firms with the Association of Ghana Industries. The manufacturing firms are specifically located within the Accra, Tema and Kumasi metropolises. The study gathered primary data using structured questionnaires of which analysis was done using both descriptive and inferential statistical tools including mean, standard deviation and ordinary least square regression.
Results: Using 114 valid responses, the study found manufacturing firms in Ghana to have high preference for Strategic Supplier Partnership (M=3.63) and Activity Based Costing (M=3.56, whereas they had least preference for Just In Time (M=3.06). The ordinary least square regression analysis showed that all the different inventory management practices: strategic supplier partnership (P=.000), activity based costing (P=.025), vendor managed inventory (P=.008), economic order quantity (P=.19), material resource planning (P=.000) and just in time (P=.009) are significantly and positively associated with operational performance.
Conclusion: The study concluded that inventory management practices especially strategic supplier partnership plays tremendous roles in improving the operational performance levels of manufacturing firms in a developing economy notably Ghana.
Keywords: Inventory management, activity based costing, economic order quantity, just-in-time, strategic supplier partnership, vendor managed inventory, material resource planning, operational performance.