Relationship between Vendor Managed Inventory and Operational Performance of Stores Function in Commercial State Corporations in Kenya.

Abstract

Vendor Managed Inventory practices play a major role in the operation of many organizations. These practices help to improve firm’s production scheduling, Information sharing, Stock replenishment and ultimately increase its operational performance. With the reported 46.4% of state corporations making losses, achieving Vision 2030 would be impossible without a critical look into how some of the practices including Vendor Managed Inventory. This study intended to fill this knowledge gap by examining the influence of Vendor Managed Inventory on operational performance of stores function in commercial state corporations in Kenya. The study was anchored on the Network Theory. The target population for the study was 906 Senior Management, Procurement Managers and Inventory Management Officers in the 54 Commercial State Corporations in Kenya. The researcher used the sampling formula recommended by Nassiuma to arrive at 99 sample size. Data collection was done through a structured open and closed ended questionnaire. Before embarking on data collection, the instruments were piloted to ensure they are valid and reliable. The study established significant influence of maintained Vendor Managed Inventory practices on operation performance of stores functions. The study recommendation that Kenyan commercial state enterprises to continue allowing their inventory providers to participate in inventory management. The vendors should synchronize inventory classification with the companies, supply goods based on demand forecasts, and advise on inventory control. These guidelines will help vendors manage inventory to meet store operating requirements for the corporations' smooth operation. The companies should also create internal vendor-managed inventory management procedures to improve inventory flow and store operations. This can be achieved by corporations giving vendors with replenishment information on agreed timelines and integrating suppliers in product design processes to develop acquired inventories that meet their ultimate goal. Inventory and demand data should be provided to vendors in advance for timely delivery. The organizations should also allow vendors to develop products in time for shop operations. Corporate partners should provide technical support to vendors to achieve quality inventories and store function operations performance.