To assess the existing inventory management’s techniques employed in Roofings Rolling Mills Limited
To examine the relationship between inventory managements and the delivery effectiveness of Roofings Rolling Mills Limited.
To establish the challenges faced in implementing inventory management’s techniques employed in Roofing Rolling Mills Limited.

The purpose of the study is to establish the impact of inventory managements towards the delivery effectiveness of an organization.

The research design to be used in the study is qualitative in nature, the researcher will use sample size of 30 respondents and they will be categorized as Procurement Officers, Accountants, Human Resource Personnel and the employees in the organization. During this process the sample size of the study will selected using purposive sampling method. A questionnaire will used as data collection instrument.

The results will further assess the relationship between inventory managements and the delivery effectiveness including; reduction of routine costs, reduction in labour costs, reduction in manufacturing costs, reduction of purchasing costs and increased organizational savings.

The study also aims at finding out the challenges faced in implementing inventory management techniques employed in the Organization.

CHAPTER ONE

1.0 Introduction

This chapter will present the background of the study, statement of the study, purpose of the study, the objectives and research questions, scope of the study and significance of the study.

1.1 Background of the study

Inventory is defined as the value of a firm’s current assets including raw materials, work in progress and finished goods or an itemized list of merchandise or supplies on hand, (Anderson, 2004). Nair, (2004) asserts that inventory management is the function of planning and maintaining the right quantity of materials for a given production programme with the minimum of investment. Inventory management is the science based art of controlling the amount of stock held in various forms within an organization to meet economically the demands placed upon that organization. It exercises control over four types of stocks that is raw-materials, supplies, work in progress and finished goods (Fredrick, 2001).

In the past, managers of manufacturing enterprise assumed that accumulation of adequate stocks of materials (inventory) was beneficial and therefore, they did not fill the necessity of filling them. They used Eye ball materials control method where a materials manager and materials controller could stand in the middle of a purchasing organization’s storage area and look around. If the materials controller happened to notice that, some of the materials are not stocked then they would reorder. The biggest challenge with such a system was that an important material could be out of stock before anyone noticing and doing something about it. Production would be interrupted and sales lost and thus such a kind of materials control system was very expensive to organisations. Today however, large inventories are often viewed with alarm and are referred to as the grave yard of business, (Alex, 2003).

Every organisation has to move materials, manufacturers have factories that collect raw materials from suppliers and deliver finished goods to customers; retail shops have deliveries from wholesalers and all these require complex management of the inventory visa vie delivery effectiveness. Kenneth Lysons, (2006) asserts that inventory management in many companies is the most important asset, so efficient inventory management will increase the delivery effectiveness and thus increase profitability since costs associated with over stocking inventory such as pilferage, theft, defects and expiry are somehow overcome. On the other hand, Too much of the inventory stocks result in to high costs of operating such as insurance, security, stock taking and storage costs.

In Uganda, inventory management has been in existence since the ancient years but mainly treated as partial storage for commodities yet to be transported. However currently, inventory management is being recognized as an entity of itself in most organization as many other functional aspects.

Roofing group was established in 1994 following licensing facilitated by the Uganda investment authority. As part of the Roofings group, Roofings rolling mills limited is one of the major and modern steel complex operating in East and Central Africa. Roofing rolling mills limited is situated in Namave industrial park, which exports its products to Rwanda, Burundi, the Democratic Republic of Congo, southern Sudan, Kenya and Tanzania. It consists of three production units which in combination have a production capacity of 240,000 tons per annum. Together with roofing Lubowa which produces the 14,000 tons of steel, this takes the groups’ total capacity to produce steel to the tune of 380,000 tons per annum. Roofing rolling mills has managed to introduce a variety of brands such as Galvanized and pre- painted iron sheets, hollow sections, mild steel plates, open profiles wire products, among others. Within the shortest time possible and are very competitive within the market. Inventory management is the backbone of the business since without stock they cannot operate because they will have nothing to sell to their customers and it’ highly dependent on inventory management techniques to ensure delivery effectiveness through ensuring the availability of the rightful quality, quantity and a sustainable production throughoutits operations thus the organization becomes an ideal study for the investigation.

1.2 Statement of the Problem

Detecting mismanaged inventory operations is not easy as the symptoms vary a great deal. Some symptoms such as rising amount of inventory than growth of sales, stock outs of items occurrence causing interruptions in production or delayed deliveries to customers, clerical costs for procuring, expediting and maintaining inventories becomes too high, there is much quantity in stock for some items and too little for others, long lead and cycle times, inefficient classification and coding of materials, items missing or misplaced and spoilage and obsolesce rates are too high.Martins (2005).

Roofings rolling limited has managed to introduce a variety of brand such as galvanized and pre-painted iron sheets, hollow sections, mild steels among others within the shortest time possible and are very competitive within the market. It is also believed that this company employs a number of inventory management techniques not limited to JIT, Materials Requirements Planning and Economic Order Quantity (EOQ) to ensure that the movement and storage of materials on their journey from origin suppliers through to final customers are handled efficiently. Inspite of roofing rolling mills Limited’s elaborate efforts in inspection, stock keeping, coding and stock taking in the procurement department, the company has continued to incur high inventory costs like unfavorable lead time, increased customer complainants and discrepancies in stock taking exercise. Could it be due to inefficiency of the inventory management? It is therefore, the interest of the researcher to conduct an investigation to determine whether delivery effectiveness is dependent on the inventory managements undertaken by an organization.

1.3 Purpose of the Study

The purpose of the study was to establish the impact of inventory managements towards the delivery effectiveness of an organization.

1.4. Specific objectives of the Study

The study will be guided by the following research objectives;

To assess the existing inventory management’s techniques employed in Roofings Rolling Mills Limited
To examine the relationship between inventory managements and the delivery effectiveness of Roofings Rolling Mills Limited.

To establish the challenges faced in implementing inventory management’s techniques employed in Roofing Rolling Mills Limited.

1.5 Research Questions

What are the existing inventory management’s techniques employed in Roofings Rolling Mills Limited?
What is the relationship between inventory management’s and the delivery effectiveness of an organization?
What are the challenges faced in implementing inventory management’s techniques in Roofings Rolling Mills Limited?

1.6 Scope of the Study

1.6.1Geographical Scope

The study will be carried out at Roofings Rolling Mills Limited Kampala (U) located in Namanve industrial park along Kampala Jinja Road in Mukono District.

1.6.2 Content Scope

The study will explore the impact of inventory management on the delivery effectiveness of the organization. Inventory Management being the “independent variable” while “delivery effectiveness” will be the dependent variable of the study.

1.6.3 Time Scope

The research will cover a period of 3 months.

1.7 Significance of the Study

The study will avail data about the benefits of integrating Inventory Managements in Roofings Rolling mills thus, organizations benefiting from the study by adopting the various inventory management techniques.
The study might assist future researchers and students who may consider conducting investigations relating to Inventory Managements and delivery effectiveness.
The study might also enable the organizations to stream line their inventory management techniques towards ensuring effective delivery.

1.8 Definition of Key Terms

Inventory: The materials owned by an organization and they can be raw materials, work in progress and finished goods (Nair, 2004).

Delivery Effectiveness: This refers to the management of daily activities in accordance with strategic and tactical plans to ensure that goals of an organization such as lead-times are achieved in an economical way.

Organization: A social entity that is goal directed, deliberately structured activity systems with an identifiable boundary.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter is mainly going to deal with literature on the impact of inventory management on delivery effectiveness. The researcher will consult the works of accredited scholars and researchers in order to understand and investigate the research problem, sources such as books, magazines, journals, internet and dissertations will be analyzed to deepen the theoretical foundation of the research.

2.1 Existing inventory management techniques employed in organizations

According to Anthony (2007), Inventory management requires a set of rules for deciding how the number held in stores to be controlled so as to ensure delivery effectiveness. Various inventory management techniques are employed in organisations today however some of them include;

Just in Time inventory management technique, Donald (2009) argues that JIT offers another approach which does not use rigid plans but gives a way of organizing all activities to occur exactly the time they are needed. They are not done too early which would leave materials having around until they are actually needed and they are not done too late which would give poor customer service. JIT looks for improvements to solve problems rather than accept current bad practice with stocks. Colin (2008) states that JIT involves delivery of materials immediately they precede their use. By arranging with suppliers for more frequent deliveries; stocks can be cut to a minimum, considerable savings in material handling expenses can be obtained by requiring suppliers to inspect materials before their delivery and guaranteeing their quality. The companies have managed to have substantially reduced their investment in raw materials and work in progress stocks. Other advantages include a substantial saving in factory space, large quantity discounts, and savings in time from negotiating with few suppliers and a reduction in paperwork ensuring from issuing blanket long term orders to a few suppliers rather than individual purchase orders to many suppliers.

JIT is based on planned elimination of all waste and continuous improvement of inventory productivity. It encompasses the successful execution of all manufacturing activities required to produce a final product right away from design engineering to delivery including all stages of conversion from raw material on ward making provision of inventories to customers as needed in right quantities and at the right time. Kenneth Lyson, (2006).

Peter Bailey, (2005), urges that it requires production when and not before a customer requires something and the pursuit and elimination of waste in production and associated planning and purchasing. The basic idea is simple, if made in parts are produced in just the quantity required for the next stage in the process just in time for the next operation to be carried out, if bought out parts are delivered direct to the production line without delays in stores, inspection just on time for the needs of production and in just the quantity needed, then material stocks are largely eliminated too.

Burt et al, (2003), states that JIT involves specification of the minimal lead time in terms of days or weeks of material usage that the supplier will accept prior to supplying the modified material. Both parties should know what the suppliers planned inventory levels are so as the firm is not likely to be left with an unusable stock built to the buyer’s specifications. This encourages responding quickly to demand changes because of their right scheduling and low inventory characteristics on the buyers side.

JIT means that components and raw materials arrive at work centers exactly as they are needed. This feature greatly reduces queues of work in progress inventory.JIT is a mixture of high quality working environment, excellent industrial engineering practice and a healthy focused factory attitude that operations are strategically important. The order and discipline are achieved through management effort to develop streamlined plant configurations that remove variability (Lenders Fearon, 2007).

Material requirements planning, Ronald Ballou, (2004), says MRP primarily is used for scheduling high valued custom made parts, materials and supplies whose demand is reasonably well known. The purpose of MRP from logistics point of view is to avoid as much as possible carrying these items in inventory. A new product is stocked in a field warehouse and is controlled using a reorder point inventory control procedure. The result of this policy is to send intermittent replenishment orders to the inventories at the plant. Because of the intermittent depletions of the component inventory, high inventory levels must be maintained when they are not needed. If the depletion rate of the inventory level can even roughly be anticipated, components may be ordered just ahead of the depletion with a result substantial saving in inventory carrying costs.

MRP is a computer based information system for scheduling production and purchases of dependent demand items. It uses information about end product demands, product structure and component requirements, production and purchase lead times and current inventory levels to develop lost effective production and purchasing schedules. The system assumes that the end product is made up of hierarchy of assemblies, subassemblies, components or raw materials. A schedule of end products requirements based on demand forecasts or actual customer orders. Joseph Martinich, (2007).

Jessop, Alex Morrison, (2006) states that MRP is an approach to stock and scheduling that is widely employed in situations where demand is dependent that is to say where demand can be planned or predicted on the basis of a known program of future activity. MRP begins with knowledge of how much end product is desired and when it’s needed. This information is broken down into the timing and quantity details suited to a large manufacturing organization which produces some components in the organization, buys other components from suppliers and ultimately assembles them all into finished products. MRP involves recognition of products to be maintained or assembled which is represented by a bill of material. Jamie Brown et al, (2006) notes that a bill of material describes the parental relationship between an assembly and its components parts or material .The bill of material may have an arbitrary number of levels and will typically have purchased items at the bottom level.

Zenz (2004), states that this system is derived from four central elements including; the bill of materials file, the inventory control status file, the master file and the production schedules and material planning packages. The bill of material file contains information of all end products, including its relationship to sub-assemblies and finished products. This is an essential logic of material requirement planning that is a fact that the demand for material parts and components depends on demand for an end product.

Elwood (2007) urges that MRP exploits the information about dependence on demand in managing inventories and controlling their production lot sizes of the numerous parts that go into the making of a final product. The managerial objective in using MRP is to avoid inventory stock outs so that production runs smoothly according to plans and to reduce investment in raw material and work on progress inventories. One input of MRP system is a bill of material constructed a way that recognize the dependence of certain components on subassemblies which are in turn dependent on the final product.

Shane (2004) urges that many manufacturers use a closed loop MRP system to schedule and control production, inventory levels and deliveries from outside suppliers. Supplier finished data can be used by the individuals controlling the firm’s incoming materials schedules as they monitor the system reports. Daily or weekly status reports flow from the supplier to the scheduler who then inputs the data for the next MRP run.

ABC Analysis, Donald waters, (2009), have it that ABC puts items into categories that show the amount of effort worsening on inventory control. This is a standard Pareto Analysis or rule of 80/20 which suggests that 20% of inventory items need 80% of the attention while the remaining 80% of items need only 20% of the attention. The categories are defined in terms of the value of annual demand, so ABC analysis starts by calculating the annual usage by value of each item. This means that it multiplies the number of units used in a year by the unit cost. Inevitably, a few expensive items account for a lot of use, while many cheap ones account for little soliciting the items in order of decreasing annual use by value, leaves a items at the top of the list items in the middle and c items at the bottom.

Christopher Martins,(2005), urges that ABC can be used as a basis for classic inventory control whereby the highest level of service(as represented by safety stock) is provided for the “A” products slightly lower level for the “B” products and lower still for the “C”s. Alternatively and probably to be preferred, we might differentiate the stock holding by holding the “A” items as close as possible to the customer and the “B” and “C” items further up the supply chain. The savings in stock holding costs can be achieved by consolidating loans would normally cover the additional costs of dispatching them to the customer by a faster means of transport for example overnight delivery.

Peter Bailey, (2005), states that Pareto Analysis often called ABC analysis was named after an Italian philosopher and economists Wilfred Pareto and it brings out a range of stock items split into three classes called A, B&C. Typically 70% of the total demand for stock is due to only 10% of the items; class A. another 20% of the items account for a further 20% of demand; class B.And that leaves class C comprising 70% of the items or lines in stock but accounting for only 10% of the demand in monetary terms. Most of the money goes on “A” items so it’s economical to order frequently, control highly, calculate requirements as exactly as possible. Shortages are presented by frequent checks and energetic chasing rather than buffer stocks. Very little money goes to “C” items and it’s economical to order infrequently, control loosely, estimate requirements roughly and prevent shortages by ample buffer stocks.

According to Ronald h. Ballou, (2004), ABC is a common practice in aggregate inventory control to differentiate products into a limited number of categories and then to apply a separate inventory control policy to each category. This makes sense since not all products are of equal importance to a firm in terms of sales, profit margin, market share or competiveness. By selectively applying inventory policy to these different groups, inventory service goals can be achieved with lower inventory levels then with a single policy applied collectively to all products. This disproportionate relationship between the percent of items in inventory and percentage of sales has generally been referred to as the 80-20 principle where “A” items are the fast movers, “B” items the medium movers and “C” items the slow movers.

Tetsuo, (2004), urges that ABC analysis underlines a very important principle ‘vital few-trivial many’. It’s a technique of material control where items are classified into high value (class A), medium value (class B), low value (class C).depending upon the relative economic value, the materials are designated as ABC. In most of the companies about 10% of the items constitute 70% of the total value of the materials, the next 20 accounts for about 20% of the total value of materials and the last 70% of items constitute about 10% of the material value.

Alan Muhlemann et al, (2002), stated that ABC or Pareto analysis is a systematic structured approach to distinguish between ‘vital’ few and ‘trivial’ many. In many organizations undertaking large tasks, an ABC will often reveal that detailed control of a few orders will control the bulky of the organization’s workload. Analysis of annual usage commonly shows a concentration of value in a comparatively small number of items so that if there are 10,000 items in stock at any one time, control of 20% of these will effect control 80% of annual spending. This leads to a stock classification system whereby by the first slice is closely controlled, the next slice (say from 20% to 50%) of the ranked items as is controlled with less precision and the remaining slice (from 50% to 100% of the ranked items is controlled very loosely. The three slices are often known as A items, B items and C items.

Economic order quantity, Donald waters, (2009), has it that EOQ is the optimal size for an order in a simple inventory control. This analysis was done early in the last century and it remains the best way of controlling many stocks with independent demand. Its flexible and easy to use and gives good guidelines for a wide range of circumstances. Imagine a single item that is held in stock to meet a constant demand of D per unit time. Assume that we know the unit cost (U), reorder cost(r) and holding cost (H) but the shortage cost is so high than no shortages are allowed and all demands must be met. The Economic Order Quantity (EOQ) is the number of units that a company should add to inventory with each order to minimize the total costs of inventory such as holding costs, order costs, and shortage costs. The EOQ is used as part of a continuous review inventory system, in which the level of inventory is monitored at all times, and a fixed quantity is ordered each time the inventory level reaches a specific reorder point. The EOQ provides a model for calculating the appropriate reorder point and the optimal reorder quantity to ensure the instantaneous replenishment of inventory with no shortages. Krupp, James A, (2004).

Shane Moriarty, (2004), defines EOQ as the optimal order size (number of units) an organization buys every time it places an order. It assumes a known demand and uniform usage. It’s the square root of twice annual demand and uniform usage an order divided by the cost to carry a unit of inventory for a year. The quantity of inventory that should be purchase every time an order is placed, the actual timing of purchase should take into account these factors: average daily demand for the units of inventory, lead time to receive an order and desired level of safety stock.

EOQ involves weighing the costs of getting stock against the costs of keeping stock. Should establish how operating costs change and when order quantities are changed. The aim of EOQ is to find for each stock item the order quantity which gives the lowest cost allowing both for stock holding costs that increase when we make the order bigger because this leads to larger stocks and for ordering costs that increase when we make the order smaller because this leads to more orders (PeterBailey, 2004).

Inventory verification system, Rao, (2000), notes that this is a system under which inventories physically present in the storeroom are checked with the store records to know whether all the inventories are intact. This process is also known as stock taking which helps accounting purposes. The physicals verification of inventories of inventories with the store records reveals the discrepancy and condition of materials.

According to Jessop and Alex Morrison, (2006), this involves the process of verifying of quantity balance of entire range of inventories held in stores and may be applied either regularly (continuous), or periodic. It encourages verifying of accuracy of inventory records, to support the value of inventory down in the balance sheet by physical verification. Ronald H Ballou, (2004), urges that it requires constant monitoring of the inventory levels. Alternatively under periodic review control, inventory levels for multiple items can be reviewed at the same time so that they may be ordered together, thus realizing production, transportation or purchasing economies. Periodic review control results in slightly more inventory but the added carrying costs may be more than offset by reduced administration costs, lower prices or lower procurement costs.

According to Donald waters, (2009), orders vary in amounts at regular intervals. The operating cost of this system is generally lower and its better suited to high regular demand of low value items. Supermarkets traditionally use periodic review and every night the tills pass message to suppliers to replenish products that were sold during the day. But the systems becomes more responsive and reduces stock levels, if it sends messages more frequently say two or three times a day, suppliers consolidate these orders and send deliveries as often as necessary.

Ordering cycles can be varied by reviewing different classes of stock at different intervals. Peter Baily, (2005), for instance says class A items can be reviewed frequently, class B items less frequently and class C items every 6-12 months. Review work can be planned to give an even work load. Inventory obtained from the same source can be reviewed at the same time and ordered together. Since orders are placed at fixed intervals, variations in usage or demand have to be covered by varying the order quantity, enough goods are ordered to replace what has been used and to cover expected requirement for the next cycle or period.

Computerised systems,Zenz (2004) says that computerised systems use code numbers that correspond to specific items. Each item in inventory is coded and any adjustment made to the item is effect through use of the items in the code number. He continues that computerised systems make an inventory adjustment each time an order for a particular item is processed for either an internal requisition or an outside sale. When an item is ordered, the amount of the item remaining in inventory is adjusted accordingly.

Computerized system will receive input data; carry out a computation or process on it, and output results: the input may be typed in directly on the keyboard or read by appropriate device from printed character, barcodes, magnetic or tape, punched cards and other media. A detailed list necessary for inventory and components is computed from a simple statement of how many units of which particular inventory are to be assessed (Jessop 2006).

Peter Bialey, (2005) states that now computers have become so cheap and even small machines come equipped with large random access memories and they have become standard tool for stock control. They can provide all kinds of useful features, in addition to recording items such as order level, order quantity, unit cost, allocated stock and free stock, what is on order, and consumption records

Manual systems, According to N.K Nair, (2000), manual systems involving the use of stock cards which includes a date column, receipt and issue. In the receipt column number and quantity received are recorded wherever any receipt or issue is made the increased or decreased balance were shown in the stock column and finally shown in the inventory sheets at the end of financial year. Inventory record cards are usually kept together in one place. This encourages contact between the clerks keeping the records and the store house staff responsible for the receipts, and issues. Stock taking is easy and queries or mistakes can be settled quickly, the need for telephone calls or written inquiries and explanations. Here inventory records can be kept to encourage sharing the total value of the balance of stock. Jessop, Alex Morrison (2006),

Peter Bailey, (2005), states that this system involves the use of a typical stock record form with item description and code at its bottom consisting of columns in which quantities in and out and stock balances are entered with ‘REF’ column for requisition number job number etc. Spaces are provided in which other data such as stock location, stock check dates and results, order dates and prices; maximum and minimum stock level and order level are shown.

2.2 The relationship between inventory managements and the delivery effectiveness

Delivery effectiveness of organizations is what occurs when the right combination of people, process, and technology come together to enhance the productivity and value of any business operation, while driving down the cost of routine operations to a desired level. Ensynch, (2009) states that the end result is that resources previously needed to manage operational tasks can be redirected to new, high value initiatives that bring additional capabilities tothe organization. Organizations must be able to examine baseline operational processes that support the business, and then plan, implement, and support the right procedures. Being process-driven means the operations that support business activities become highly efficient.

Ravishankar et al, (2006), states that delivery effectiveness is reflected in terms of productivity, profitability, morale of employees, customer service improvement, adaptiveness to changes, competitive edges among others. He continues that to make an organisation operate efficiently factors related to the management and determinations of organisational efficiency are essential. Many suggestions have been made by academicians regarding different criteria that can be employed, and in the assessment of organisations Delivery effectiveness including: profitability measured in terms of gross profit, growth, productivity relating a unit of output to the input required to produce, new innovations in terms of new services, new technology and managerial systems and procedures.

Thukaram, (2009) notes that delivery effectiveness can be measured on the following criteria; reduction in operating cost by not producing defective goods, identification of the process faults and defects of products and thus control scrap and waste, setting and resetting of processes and machinery to know the performance of similar machines and operations, increase in the profit earning capacity of the business, reduction in product line bottlenecks and customers’ satisfaction, easy management of working capital, earning and dividends, efficient operation of workers, reduction in material handling costs and efficient installation of new techniques of production and automation if necessary.

Delivery effectiveness of organisations is reflected in the ability to control costs and manage the material flow in some uniform way .(A.K.Datta,2000) continues that potentiality of this control is again highly related to the quality of decision making, information available with respect to the quantity and location of materials. A little reflection on the basic needs of the functional units of any organisation will confirm that an effective interrelationship at the various stages of materials utilisation, conversion, location and their movement will ultimately control costs. If the quantity and movement of materials have to be controlled, information flow must be timely, accurate and without disruption.

Delivery effectiveness involves understanding clearly the demands of each customer and every to cut down on costs and increase productivity as well as quality. Since no one knows a job more than the people who do it every day, hearing their advice on how to reduce costs without limiting quality is often a smart idea. Some organizations now offer an incentive to workers who can resolve the problem of how to save money without hindering efficiency. The purpose of manufacturing cost reduction through design optimization is to make money by reducing the overhead. Keeping the manufacturing process simple, reducing the costs of material and increasing the efficiency of the manufacturing process are the best ways to achieve this objective. Manufacturing cost reduction through design optimization is definitely a good business practice.

Buffa, (2007), a well organised management system can lead to Delivery effectiveness hence substantial savings for a company and these savings are realised in different forms depending on the particular situation of the company. Some common sources of such savings are low purchase cost, lower interest expenses or an increase in the availability of internal funds, lower operating costs (clerical, expediting, transportation, receiving etc.), lower production cost per unit, dependable delivery of production and better customer service in the supply of goods

Delivery effectiveness is measured through the use of new technologies that reduces labor costs and/or increase revenue levels, expenses reduction, competitively, and boosting of the bottom line, identification of all the hidden costs in a company, efficient detection of all the weaknesses in the company’s financial control systems and design improvements that reduces operating costs. Effective Management of company cash flows, increase in gross tax margins and net profits, and reduction of the overall tax rates of the organization.

David M. Anderson, (2004), believes that Delivery effectiveness can be reflected in terms of purchasing Leverage. Being able to order larger quantities of standard parts and materials provides purchasing leverage where buyers can benefit from suppliers economies-of-scale and arrange more frequent deliveries, to support just-in-time operations. Processes must be coordinated and common enough to ensure that all parts and products in the mass customization platform can be built without the setup changes that would undermine flexible manufacturing.

2.3 The challenges faced in implementing inventory management techniques employed in Organizations

Bonny Conrad, (2010), states that implementing an inventory control system allows businesses to keep a tighter lid on the products on their shelves. Once the inventory control system is in place, it is easy to determine how much of every product is on the shelf. This makes it easier for companies to manage their inventories and control their costs. Integrating the ordering system with inventory control makes it easier for companies to get the products they need from the factory to the store shelves.

A formal inventory control system can produce substantial savings for a company. These savings are realized in several different forms, depending on the particular situation of a company. Some common sources of such savings are lower purchase cost, lower interest expenses or an increase in the availability of internal funds, lower operating costs (clerical expediting, transportation, receiving etc.), lower production cost per unit, dependable delivery of production and the better customer service in the supply of goods. Elwood S Buffa, (1987).

According to Abo, Tetsuo, (1994), inventory control ensures regular supply of materials so as to enable uninterrupted production; it minimizes investment of capital on purchase of materials. It also reduces damage of obsolesce, reduces inventory carrying costs, avoids duplication in ordering the materials, avoids theft or loss of material, simplifies accounting of materials and it makes use of modern technique such as standardization; value analysis: input substitution which cut down the material costs.

Gary Zenz, (1994), states that inventory control encourages reduction of production costs because of smooth flow of materials, efficient use of invested capital that is balancing of the three preceding elements in the cost of capital encouraging good financial management of inventory, optimal customer service that is quantity purchase (low production runs) assure optimal customer service and provide efficient scheduling of internal operations.

According to Luanne keichner, (2010), the sales department depends on accurate inventory numbers to plan their sales strategies. A salesman on a retail sales floor must be able to produce the item that they are selling to the customers. Production planning depends on an accurate inventory to schedule and plan the widgets that are produced by the manufacturing department each day. The planning department develops a schedule by consulting available inventory and resources to determine orders which are produced first and lastly ensures that the numbers are accurate for production planning.

Alan muhlemann,(2002),states that inventory control encourages a stock item file, which consists of the basic information on all items with one record(or card in a manual system) for each item including basic information, ensure that stocks for a particular job are earmarked before actually issuing it to the job. Since some types of items go into quarantine on annual in stock only to be free for issue when some tests have been successfully completed and materials issued to a job back to a particular delivery can easily be traced and stocks of some items may be held at several locations.

Inventory control policy requires a set of rules for deciding how the number held in stores to be controlled so that the stores objective were met .one of the most commonly used for example is for moving parts and is based on the notion of a cost optimal reorder level(for any particular part, the stores holding which when reached will trigger the process of re-ordering) and cost optimal economic order quantity (the number to be ordered at any one time).This stock control monitors the usage and delivery of parts and uses the inventory policy to control replenishment. Anthony Kelly, (1997)

Good inventory control system is essential to the success of a business, both for its own records and for records that were reviewed by the IRS and other outside entities. Inventory control software aids management to easily track company investments and see where improvements might be made. Robin Lewis Montanye, (2010) notes that inventory control software helps the inventory manager to save time by keeping calculations up-to-date giving the manager easy access to the numbers that are needed for reporting and restocking information. These figures can easily be accessed by Purchasing for fast, up-to-the-minute information on what will need to be bought.

According to Lee Morgan, (2010), with a proper inventory control system in place, it is easy to compare physical inventory counts to the numbers in the system. If there is a discrepancy, management will know about it immediately instead of the missing or excess items being overlooked for weeks or months. Chris Joseph, (2010), tighter inventory control can allow for the implementation of a leaner inventory management process such as just in time (JIT) ordering. With this technique, the lead time required to order materials and merchandise decreases, resulting in a more efficient process. For this to be successful, however, tighter inventory control is necessary because the margin for error is also lower. Buyers and other purchasing personnel can gain a better handle on how much inventory is on hand, taking much of the guesswork out of their purchasing decisions.

SkeChay of http://www, notes that with effective control and management over inventory stock, as well as accurate visibility and fast efficient fulfillments, comparative pricing can be given on a customer-to-customer basis. In addition to cutting down on operating costs, it will also bring satisfied customers back for more businesses in the near future.

Effective inventory control reduces expenses including cost of capital, storage and risks (including obsolescence, damage, theft and deterioration) plus the appropriate taxable amounts because it reduces the total amount of inventory required to manage the business. (Kenneth H.2010), points out that inventory control monitors the level of inventory and proactively manages obsolescence and deterioration by ordering in the appropriate quantities. Effective inventory control also reduces storage costs, because it orders enough inventory Well-defined inventory control policies can reduce the labor costs associated with managing the inventory

According to Herbert, (2010) with an inventory control system in place you can easily track the movement of the inventories on daily basis, go down basis, date-wise, category-wise, item-wise, party-wise etc. This helps you to stock the materials in the required quantity and avoid overstocking. The inventory management system helps you to generate different kinds of reports on the available data which will help the management to take informed decisions. If this software is integrated with the POS system, then you will get data related to the daily sales of an item. With this information you can chart out the demand for a particular product. This helps you to stock the inventory related to the product in demand. Thus this software helps you to meet the demand in the market and increase the profitability.

Ravishankar, (2006), notes that inventory control encourages maintaining a constantly available of raw materials, purchased parts and supplies that are required for the manufacture of products. Functional responsibilities include the requisition of materials for the purchase in economic quantities at the proper time and their receipts, storage and protection, issuing of materials to production upon authorized request and the maintenance and verification of inventory records. To many business owners, inventory control impacts cash flow directly; a good automated system will help immensely in calculating inventory turnovers. Total inventory turnover is stated either in number of turnovers per year or number of days of inventory on hand. Broome (2009)

CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter shows how the study will be conducted. It reveals the research design to be used: sampling method and criteria, data collection tools will be used , the procedures of collecting data, and, how data will be analyzed.

3.1 Research Design

The researcher will use a combination of descriptive and analytical research designs that will be based on well administered questionnaires. The researcher will also use both qualitative and quantitative methods to enable all involved parties understand the study findings and the recommendations.

3.2 Area of Study

The study will be carried out in Roofings Rolling Mills Limited located in Kampala Uganda, Namanve industrial park along Kampala-Jinja road in Mukono district.

3.3 Population of the Study

This study will involve a cross section of Stores Personnel, Procurement Officers, Human Resource Managers, Accountants as well as a wide range of mid-level workers in Roofing Rolling Mills Limited.

3.4 Sampling Technique, Sampling procedure, Sample Size and composition

3.4.1 Sampling Technique

The researcher will use purposive sampling techniques to attain responses from the top management staff. On the other hand, Simple random sampling will be employed to attain responses from the employees in the organization.

3.4.2 Sampling procedure

The sampling procedure will encompass both the use of simple random sampling as well as explicit techniques. Random sampling will be used to target respondents with similar characteristics while explicit techniques will be used to obtain responses from the planned respondents.

3.4.3 Sample Size and Composition

The sample size will constitute of 30 respondents and they include Stores Personnel, Procurement Officers, Accountants, Human Resource Personnel and Operations Managers.

3.5 Sources of Data

The researcher will use both primary and secondary sources of data to conduct the investigation.

3.5.1 Primary sources

Primary data will be acquired from the research questionnaires and interview questions; these will be mainly from the respondents from the organization and this will basically focus on the impact of Inventory Management on delivery effectiveness.

3.5.2 Secondary sources

The researcher will obtain secondary data from the published articles such as journals, theses, and previous researchers’ published texts.

3.6 Research Instruments

3.6.1 Questionnaires

Well-designed questionnaires will be used to collect data, these will be both open ended and closed. Questionnaires will be used to acquire information from mid-level employees in Roofing Rolling Mills Limited for the purpose of having all questions answered; questionnaires will be used as better tool for data collection.

3.6.2 Interviews

The researcher will employ the use of Semi-structured interviews, this will be used because it enables the researcher to compare and contrast information obtained in other interviews.

3.7 Data Quality Control

3.7.1 Validity of the tools

The questionnaires will be pre-tested to ensure the validity and reliability in order to reduce on ambiguity of the questions. The respondents will be selected at random to answer the questions asked to confirm their validity and reliability.

3.7.2 Data Reliability

The researcher will ensure data reliability by subjecting the questionnaire to her peers before using it for actual sampling.

3.8 Procedure of the Study

3.9 Data Processing, Data Analysis and presentation

3.9.1 Data processing

Data processing will be undertaken through sorting, editing, coding and entry of the data into the computer for analysis, opinions and ideas will be categorized and conveyed into their specific objectives.

3.9.2 Data Analysis

Data analysis will involve the use of both quantitative and Qualitative methods. Quantitative methods will be used to quantify numerical data while qualitative methods will be used to tabulate the findings for easy interpretation and completeness, each question will be looked at to ascertain whether it was answered.

3.9.3 Data Presentation

Data presentation will involve the use of both Quantitative and qualitative techniques. Quantitative techniques will be used to present numerical data using statistical software’s such as Microsoft Excel and SPSS. These will be used to tabulate numerical figures into frequencies and percentages so as to make visual impressions of the findings to enable the researcher to come up with logical and specific conclusions. Lastly, Microsoft Word will be used to present Qualitative data through employing descriptive techniques.

3.10 Limitations of the Study

In the process of carrying out the research, the researcher is most likely to encounter the following hindrances:-

Language barrier due to the heterogeneous composition of the employees..
The time allocated may not sufficient enough to acquire all the required information on inventory management and delivery effectiveness.
There might be limited response from the staff in fear of exposing the organization’s confidential records to the researcher.

REFERENCES

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