Investigation of inventory management practices at m. products bakery and confectionary limited

Abstract

Managing stock effectively is important for any organization, running a bakery firm is no exception because without enough stock, services to the customers will come to an abrupt stop. M. Products Bakery and Confectionary Limited provides services for 24 hours and accordingly, needs to keep stock of certain materials and other supplies in order to fulfill its duties effectively. It is generally held opinion that where stock management is poor, it greatly affects the company’s operations as well. Hence this study investigated the Inventory management Practices, M. Products Bakery and Confectionary Limited taken as a case study. A sample of 50 respondents was selected for the study. Questionnaires, interviews and observation were used in attaining data from respondents. The study revealed that the company ensured lean inventory management systems and strategic supplier optimization and most importantly the use of inventory recording technique (stock valuation using FIFO, inventory and issue methods) to manage its inventory. The study also revealed that the company had a computerized system as an inventory management practice but it had no existing inventory model. The study revealed that Inventory Management Practices have impacted on the company’s operations, profitability and the ability of the company to meet customer demand. However, among the gaps within the inventory management practices at M. Products Bakery and Confectionary Limited was limited space, delayed orders from suppliers leading to insufficient inventories, poor quality products from suppliers, bureaucratic process in procurement, purchase of raw materials with early expiration date, increased damages due to poor handling during production, overstocking/under stocking, weak management system , lack of training of the employees and un qualified employees, use of manual inventory management system in some departments, scattered storage facilities and poor transportation mechanism (resulting into spoilage of materials), theft and attacks from rats which reduces the amount of inventory available for sale, reduced demand from some customers especially during the covid19 outbreak and heavy taxes from the government. It was therefore recommended that there is need to expand on its production facility and also adopt advanced warehouse techniques, management to emphasize the importance of inventory management, company should improve its relationship with its suppliers, adopt accurate forecasting techniques, should train more executives and employees and also adopt an advanced information system such as Electronic Data Interchange.