Exploring the Nexus of inventory optimization and operational efficiency: Data-driven insights from public sector organizations in Ethiopia

Abstract

This study explores the link between inventory optimization and operational efficiency in public sector organizations in Ethiopia. The study specifically examines the role of Capacity utilization, Inventory precision, IT infrastructure, administrative purchasing procedures, Workforce competence and proficiency, Record-keeping towards achieving optimal inventory management and operational efficiency in these organizations. The research is based on a quantitative approach, with primary data collected through a survey of 186 public sector organizations in Ethiopia. Utilizing a descriptive and explanatory research design, primary and secondary data were collected and analyzed through the application of SPSS version 24 and presented with descriptive and inferential statistics. The results indicate a significant and positive correlation between Inventory Optimization and operational efficiency. Additionally, multiple regression analysis revealed that inventory utilization, administrative purchasing procedures, record-keeping and documentation, staff skills and knowledge, inventory accuracy, and IT infrastructure have a significant impact on operational efficiency. Consequently, the study provides data-driven insights into the importance of inventory optimization in enhancing operational efficiency in public sector organizations in Ethiopia. This study recommends that the management of Ethiopian public sector organizations should focus on developing short administrative purchasing procedures, ensuring good record-keeping and documentation, utilizing adequate information and communication technology, and investing in staff skills training to enhance Inventory Optimization and overall organizational operational efficiency.