Abdullahi Mohamed, Abdirahman
(2009)
Effectiveness of Inventory Control Methods in Improving Efficiency In Beverage Industry: A Case Study of Coastal Bottlers Ltd Mombasa, Kenya.
[Dissertation (University of Nottingham only)]
(Unpublished)
Abstract
This study aims to assessing the effectiveness of inventory control methods in increasing efficiency in the beverage industry. The selected case study is the COASTAL BOTTLERS Ltd, a regional processing plant that produces packages and distributes COCA COLA brands, soft drinks in the entire coast region and neighboring district. The study identifies objectives, which focus on identifying the inventory methods employed by the COASTAL BOTTLERS ltd, identifying problems encountered as a result of using these methods, and finally suggesting ways of improving inventory methods in order to improve the company’s efficiency and profitability. Inventory management has become a source of competitive advantage in recent year; good inventory management can increase efficiency of operations and profitability. By employing good inventory management techniques, companies can have low stock-outs, which means that the customers orders are fulfilled on time and this increases customer loyalty which in turn increase the sales of company. In addition, good inventory management ensures that the company spends less on warehousing and reduces the chances of goods getting spoilt in the stores. With good inventory system, it will be quick to trace items in the warehouse and ensures that less space is used to store good, this reduces cost. In addition automated inventory reduces the need for more staff in stores. All this contribute to saving costs of operations and increased profitability. Therefore, good inventory method improves efficiency. The study used a case study technique. Three types of questionnaires were designed; questionnaires for the employees, questionnaires for the vendor, and the questionnaire for the consumers. This was complimented with observation and interviews. The study was carried out in Magongo, Mikindani area and the Coastal Bottlers plant in Mombasa. In addition descriptive statistics was used to analyze the data, this included use of pie charts, bar charts, and histograms. The findings showed that the company employs a hybrid approach in its inventory control, the main emphasis is on a pull model where it uses just in time and KANBAN inventory control method, and it also employs economic order quantity and materials requirement planning. The main triggers of restocking are stock-outs and departmental requisition. COASTAL BOTTLERS Ltd has a high frequency of stock-outs; stock-outs are the major indicators of effectiveness of inventory control methods. This means that the consumers’ orders are not fulfilled on time and popular brands are always hard to find in the market. These is caused by poor inventory system in the companies operations. The phenomenon of poor inventory control method could endanger the company and cause the company to loss its customers and its market share. The company should develop a comprehensive inventory control policy, train its staff on the importance of coordination among departments. Another area of training should be on customer care management and market intelligence so as to improve market responsiveness.
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