Accessing the inventory management practices in a manufacturing company: ( a case study of Juaben Oil Mills Ltd)
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Date
2008-09-13
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Abstract
Effective inventory control is a vital function to help ensure the success of manufacturing and distribution companies. This effectiveness of inventory control is directory measurable by how successful a company is in providing high levels of customer services, low inventory investment and low costs. Certainly, an area where management should apply a philosophy of aggressive improvment.
(http://www.rmdonovan.com/inventory -contorl .htm)
Although the amount and value of inventories carried by different types of firms varies widely, a typical firm probably has about 30 percent of its current assets and perhaps as much as 90 percent of its working capital invested in inventory (J. Stevenson, 1999).
Open and closed ended questionnaire and interview were used to assess all the primary data while reports and records were used for the secondary data. Graph tool of Microsoft Excel software was used to analyze the data obtained.\
The study tried to identify the inventory management system adopted by JOML with its challenges and how these systems can further be improved.
The study revealed the urgent need for a well documented procedure to be adopted by the company in managing inventories. The study further indentified a lot of problems chief amongst these were shortages, overstocking and delays in deliveries. This study also revealed that the stores personnel do not have any professional training on the effect and cost of bad inventory practices. The store’s manager, however, does not take part in decision making and this poses a threat to effective inventory management.
It is therefore recommended that Management considers inventory management as part of corporate planning so as to save cost in managing inventories.
Management is also advised to computerized stores activities which will help improve the smooth transfer of information within and outside the stores. This will also ensure proper documentation of items to facilitate the company adopting an inventory model in the future. Although this is a demanding task, the resulting benefits of proper management of stores activities proposed by the research make the task worthwhile.
Further studies must be done to implement pragmatic inventory management models relating to JOML after recommendations have been fully implemented
Description
A thesis submitted To the Department of Information and Decision Sciences, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the Degree of Master of Business Administration (MBA), 2008