EFFECTIVE INVENTORY MANAGEMENT AND CONTROL ON ORGANIZATIONAL PRODUCTIVITY

ABSTRACT

The purpose of this study was to investigate inventory management practices and organizational productivity in Lagos, Nigeria using Cadbury Nigeria Plc., Ikeja as a focus. The research hypothesis were: Inventory management has no effect on organizational productivity, inventory management techniques used in the organization are not effective and efficient, management of firm does not see the role of inventory management as contribution towards achievement of firm’s goals, management of firm sees the role of inventory management as contribution towards achievement of firm’s goals. A survey research design was used in this study. The target population was all the staff of Cadbury Nig. Ltd. The sample size was 138 respondents. An indication that firm profitability is negatively influenced by inventory period, size of firm and inefficient management of inventory. Again, from the study, it was found that the operating cash flow of manufacturing firms in Nigeria is related to inventory conversion period. The study concluded that inventory management practices affect the productivity of large manufacturing firms in Cadbury Nigeria Plc., Ikeja, Nigeria. Use of Just-in-time inventory model allows the firms to reduce overhead expenses while ensuring that parts are available for manufacturing products. Manufacturing firms should fully adopt lean inventory systems in inventory management as this will greatly improve the performance of the procurement function. Just-in-time systems should also be integrated by the firms. Also the study recommends that the management should constantly expose its staff to training in order to improve their skills on inventory management and enable the employees to understand the current inventory systems which when used will help the organization reduce on costs associated with holding inventory.