Inventory Management Practices and Organizational Productivity in Nigerian Manufacturing Firms

Abstract

This study examined the relationship between inventory management practices and productivity of selected manufacturing firms in Nigeria. The inventory management practices examined include inventory record accuracy, lean inventory system, buffer stock management and Information and Communication Technology. In addition, organizational productivity was measured along two dimensions namely: organizational effectiveness and organizational efficiency. A survey research design was adopted for the study. The population of the study comprises employees in the following departments – commercial, finance, production, distribution and inventory – of five selected manufacturing companies in Benin City. A sample size of two hundred and sixteen (216) employees from Seven-Up Bottling Company Ltd, Global Horn Industry PVC Ceiling Limited, Integrated Rubber product Nigeria Plc., Livestock Feeds Plc and Nigeria German Chemicals in Nigeria were selected for the study. The instrument for data collection was a questionnaire. Data collected from the questionnaire were analysed using frequency distribution, mean, correlation and regression. All analyses were done using the Statistical Package for the Social Sciences (SPSS) software. The findings of the study revealed that inventory record accuracy, lean inventory system and information technology have a positive and significant effect on organizational productivity in Nigeria while buffer stock management was found to be insignificant. The study recommends the need for manufacturing firms to improve their inventory record accuracy by using system-based inventory management practices to enhance organisational performance.