Inventory management practices and operational performance of flour milling firms in Lagos, Nigeria.

Abstract

This study examines inventory management practices in flour milling manufacturing firms and their effects on operational performance. Five flour manufacturing firms with aggregate staff population of 2569 constituted the unit of study. From the population space, 150 respondents were randomly selected. Structured questionnaire was the major instrument for the collection of relevant primary data while mean and standard deviation was used to analyze descriptive data. Results showed that exception of the large manufacturing companies, most of the medium-sized flour milling firms adopts different inventory management strategies from the scientific models. Their inventory management strategies and policies were rather based on factors such as changing level of customer demand, prevailing industry practices, forecast estimates and guesses, and available production capacity. Findings also revealed significant differences between effective management of inventory and optimal operating performance. For instance, while firms that scientific inventory management approaches reported efficiency in capacity utilization, increased service level, and reduced lead time, others with unscientific strategies had minimal utilization of material resources. There is need for flour manufacturing firms to implement scientific inventory management models to adequately handle material shortages, product stock outs, and component pile up with consequent penalties.