The Impact of Inventory Management on Sales Performance.

Abstract

The study was carried out in Mukwano Group of Companies, Kampala District. It was intended to establish relationship between inventory management and performance of manufacturing sectors. The study objectives included; to establish the inventory management practices used in Mukwano Group of Companies, to examine the challenges of inventory management, and to examine the solutions to the challenges .The researcher opted to use a case study. Questionnaires guides were used in the study. Purposive and systematic random sampling was used to get a representative sample size of 60 respondents. The selected respondents were top management, production staff, accounts staff and support employees. It was quantitatively analyzed. The study findings revealed inventories are always given attentions basing on their valuations (values), high valued products are always given much attention under tight control, the least value inventories are always provided low attention and under simple control are the major inventory management practices used in Mukwano Group of Companies. It was also revealed that the challenges in inventory management vary in difficulty. Balancing inventory levels to meet customer demand without overstocking or understocking is moderately rated, indicating some variability in how organizations handle it. Several solutions have been proposed to address challenges in inventory management, each with its own level of effectiveness. These solutions include categorizing inventory items based on importance through ABC analysis, utilizing historical sales data, market trends, and demand forecasting tools for improved accuracy, diversifying supplier bases to reduce dependency on a single source while establishing strong supplier relationships and contingency plans, and implementing security measures like surveillance cameras, access controls, and inventory audits The researcher concluded that inventory management and performance of manufacturing companies are significantly correlated. It is recommended that in order to carryout proper inventory management the researcher recommended that the firm must carry out regular stock audit and work in progress plus stock at least monthly in order to reconcile stock at hand with recorded stock to avoid losses due to excessive inventory and stock outs.