research methodology

ASSESSING THE EFFECT OF STORES MANAGEMENT ON ORGANIZATIONAL PERFORMANCE: A CASE STUDY OF SADOLINE PAINTS LIMITED

LIST OF TABLES

Table 3.1: Sample Size

Table 4.1: Distribution of Respondents by Sex

Table 4.2: Age of Respondents

Table 4.3: Highest Level of Education

Table 4.4: Number of Years in Service

Table 4.5: Objectives of Store Management

Table 4.6: Performance of Sadoline paints limited

Table 4.7: Effect of store management on organizational performance

ABSTRACT

The study was carried out at Sadoline paints limited with the purpose of examining the effect of stores management on organizational performance. The research objectives were (i) to examine the objectives of store management at Sadoline paints limited, (ii) to establish the performance of Sadoline paints limited, Uganda and (iii) to establish the effect of stores management on performance of Sadoline paints limited, Uganda.

The literature review was done basing on study objectives and a descriptive research design was used where both qualitative and quantitative approaches of data collection were adopted on 50 respondents using questionnaires. 

The found out that stores management has made materials to arrive at the right time, holding costs have reduced, also products are produced in right amounts, waste have reduced, production costs have reduced and general storage costs have reduced since less is stored, however stores management does not totally remove the cleaning costs and has not reduced inspecting and ordering costs. 

The study concludes that objectives of stores management is to ensure continuous supply of materials, maintain sufficient stocks of raw materials in periods of short supply, minimize carrying costs, also maintain sufficient finished goods for smooth sales operation and maintain investment in inventory to maximize profitability. The performance of Sadoline paint has been realized since customer demand are met, there is increased market share, profits are maximized, financial obligations are met on time and there is improved rate of return on assets. As a result of store management carrying costs have been minimized, customers are satisfied, profits and market share have increased.

It was recommended that installation of a strong control and inspecting system so as to detect fraud and theft of stock, the stores should be enlarged and tidy so as to ensure maximum usage of space among others and there is need to segregate duties of receipt and recording of stock in order to reduce fraud and theft.

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

According to Richardet al (2009) organizational performance encompasses three specific areas of firm outcomes one of which is financial performance concerned with profits, returns on assets, and return on investment; product market share and shareholder return that involves total shareholder return and economic value added. Organizational performance comprises the actual output or results of an organization as measured against its intended outputs which are its goals and objectives (Jabareen, 2009). It deals with the cost minimization and revenue maximization (Konke, 2003). Organizations that do not increase performance quickly lose competitive advantage. Increases in performance can be gained by increasing output while input remains the same, increasing output while input increases at a slower rate, maintaining the same output while the input decreases or by declining output while input falls at a faster rate (Needharm & Dransfield, 1995). 

Store management involves the planning, control of issues of stores (Kortz2003).  The objective of store management is to efficiently and economically provide the right materials at the time when it is required and in the condition in which it is required (Ogbo & Onekanma, 2014). A professionally managed store has a process and a space within, to receive the incoming materials (Receiving Bay), keep them for as long as they are not required for use (Custody) and then to move them out of stores for use (Miller,2010).In a manufacturing firm this process forms a cycle to maintain and run the activities of Stores (Kortz2003). 

The role of the store manager hence is to receive the goods and act as a caretaker of the materials and issue them as and when Production demands it. Needless to say store management activity does not add any value to the product but may be costly if poorly managed which may impact on organization performance interms of profits, market share (Schonsleben, 2000). The organization has to spend money on space that is to say expenditure on land, building and roads, equipment, machinery and other facilities provided such as electricity, people (salaries and wages), insurance, maintenance costs, stationary, communication expenses and the cost to maintain the inventory among others(Ogbo & Onekanma, 2014).  All of these get added to the organizational overheads and finally get reflected in the costing of the finished product. 

Sadoline paints limited now requires that costs and cost centers be well managed and controlled. Consequently stores as a cost centers must be well managed. In practice Sadoline paints limited spends huge amount of resources (i.e. time and money) managing and directing their suppliers to ensure that critical inventory/stock levels are maintained and the vital flow of product needs for operations continue. Sadoline paints limited stores are set up to provide safe custody of its properties and goods in stores (Ayad, 2011). Sadoline paints limited ensures that there are proper stock control systems and adequate measures to prevent abuse, unauthorized disposal of serviceable stores for personal gain, misappropriation of the assets and theft; this has enabled it to improve its performance in terms of high profits and a big market share (Mulondo, 2010). Thus, the study made an assessment on the effect of stores management on organizational performance, a case study of Sadoline paints limited.

1.2 Statement of the problem

Performance of Sadoline paints limited in terms of profits, sales, and revenues is low and management continues to complain on the way stores are managed (Mulondo, 2010). It was against this background that the study sought to assess the effect of stores management on organizational performance.

1.3 Purpose of the study

The purpose of the study made an assessment on the effect of stores management on the performance Sadoline paints limited, Uganda.

1.4 Specific objectives

1. To examine the objectives of store management at Sadoline paints limited.
2. To establish the performance of Sadoline paints limited, Uganda.
3. To establish the effect of stores management on performance of Sadoline paints limited, Uganda.

1.5 Research questions

1. What are the objectives of store management at Sadoline paints limited?
2. What is the performance of Sadoline paints limited, Uganda?
3. What is the effect of stores management on performance of Sadoline paints limited, Uganda?

1.6 Scope of the study

The area of the study was carried out at Sadoline paints limited. The study was interested in trying to understand the objectives of store management, the performance of Sadoline and the effect of stores management on performance. The study considered 2012-2016 as the period of data considered in the organization. The study was carried out for a period from May to October, 2017.

1.7 Significance of the study

1. Other stakeholders such as customers, suppliers who need knowledge about stores management can use the research as a reference.
2. The findings would help customers by receiving good service from the organization as a result of the improvement in store management practices in the organization.
3. Stakeholders would find it useful since they would be able to know about the performance of store management in the organization and its general performance.
4. Suppliers would find the findings useful since they would have access to know the criteria followed in store management in the organization.
5. The research would benefit the management and the workers of the organization to know why there are challenges in their stores management system and what to do to improve stores management since the research was conducted among them.
6. The study findings would to be useful to future researchers who would be studying a similar topic as they would use it as literature review.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter provides the reader with important facts in order to increase the understanding of the area under investigation. The chapter also identifies what other authors have found out in the area of stores management and organizational performance.

2.1 Stores Management

Stores refers to an organization as an area within the company in which all kinds of materials needed for production, distribution, maintenance, packaging etc. are kept received and issue (Carter and Price, 1993). While management refers to the function that coordinates the efforts of people to accomplish the goals and objectives by using available resources efficiently and effectively. This includes planning, organizing, staffing leading or directing and controlling an organization to accomplish the goal or target (Wikipedia).

According to Emmett et al (2005) stores management make sense if the following contributions is provided: to make available balance flow of materials, tools, equipment and stationary necessary to meet operational requirement; To provide maintenance materials, spare parts and general stock that is required; To accept and store scrap and other discarded materials as it arises; To account for all receipts; To issue goods in bulk and break bulks.

Store management involves the planning, control of issues of stores (Kortz2003).  The objective of store management is to efficiently and economically provide the right materials at the time when it is required and in the condition in which it is required (Ogbo & Onekanma, 2014). A professionally managed store has a process and a space within, to receive the incoming materials (Receiving Bay), keep them for as long as they are not required for use (Custody) and then to move them out of stores for use (Miller, 2010).In a manufacturing firm this process forms a cycle to maintain and run the activities of Stores (Kortz2003). 

The role of the store manager hence is to receive the goods and act as a caretaker of the materials and issue them as and when Production demands it. Needless to say store management activity does not add any value to the product but may be costly if poorly managed which may impact on organization performance interms of profits, market share (Schonsleben, 2000). The organization has to spend money on space that is to say expenditure on land, building and roads, equipment, machinery and other facilities provided such as electricity, people (salaries and wages), insurance, maintenance costs, stationary, communication expenses and the cost to maintain the inventory among others(Ogbo & Onekanma, 2014).  All of these get added to the organizational overheads and finally get reflected in the costing of the finished product. 

With increasing need for effective operations management, organizations now requires that costs and cost centers be well managed and controlled. Consequently stores as a cost centers must be well managed. In practice firms spend an inordinate amount of resources i.e. time and money managing and directing their suppliers to ensure that critical inventory/stock levels are maintained and the vital flow of product needs for operations continue. New Vision stores are set up to provide safe custody of its properties and goods (Ayad, 2011). New Vision ensures that there are proper stock control systems and adequate measures to prevent abuse, unauthorized disposal of serviceable stores for personal gain, misappropriation of the assets and theft (Mulondo, 2010). 

2.2 Organizational Performance

With the increasing number of analyses and research papers referencing financial performances, there is a need to have basic understanding of definition of financial performance and its various measures, (Burkhardt, 2013). Therefore, choosing a particular measure of financial performance depends on how well it meets the intended purpose. Financial performance of a bank is defined as its capacity to generate sustainable profitability, (European Central Bank (ECB), 2010). Therefore we can say that financial performance of a bank is its ability to employ the available resources to increase shareholders’ wealth and generate sustainable profits to strengthen its capital base through retained earnings to ensure future profitability.

Measurement of financial performance of any firm is crucial in deciding the strategies to be formulated to ensure that the firm is in the right path. This is particularly important in order to establish if a firm is making losses which if they become consistent may lead a firm to depleting its capital base, (ECB, 2010). Key drivers of measuring bank performances are earnings, efficiency, risk taking and leverage, (ECB, 2010). Firstly, a bank must be able to generate earnings to remain in operation, secondly, it should be efficient meaning it should be able to generate revenue from the given assets and make profits, thirdly, it should be able to adjust its earnings to overcome the various risks involved such as credit risk and finally it should be able to improve its results through the way it functions. 

2.2.1 Measure of Performance in an organization 

The main measure of financial performance is through ratio analysis which has been identified as convenient and efficient method of assessment since it combines information from financial statements and comes up with numbers that are more easily interpreted financial meaning, (Burkhardt, 2013). Financial measures are regarded as “lag” indicators of performance whereas Intellectual capital measures (like non-financial measures) are regarded as “lead” indicators since they are mainly intended to generate future earnings power (Kaplan & Norton, 2001). While all future earnings are uncertain, it is greater for intellectual capital than for tangible assets. Traditionally, firms relied on their tangible assets to drive their performance and firm-level strategy.

The traditional measures are similar to those used by other firms which include Return on Assets (ROA) which is the net income for the year divided by the total assets. The other measure is Return of Equity (ROE) which is the internal performance measure of shareholder’s value and this is the most famous measure of financial performance. The market based measures depend on the way the capital market value the performance of firm as compared to its economic and accounting value. 

Profitability measures the extent to which a business generates a profit from the use of land, labor, management, and capital. It is measured by net firm income from operations (NFIFO), rate of return on firm assets (ROA), rate of return on firm equity (ROE) and operating profit margin (OPM) (Miller & Modigliani, 1966). Net revenues available from normal operations after fixed and variable expenses have been deducted and for accuracy, it is calculated on an accrual basis. Operating profit reflects ability to generate revenues and control costs. It is revenue available to compensate debt and equity capital. 

The measure of operating profit at divisional level is EBIT (earnings before interest and taxes). EBIT is calculated before interest and income taxes, and hence reflects the divisions’ profit and loss responsibility. It comprises the EBIT of the divisions as well as profit and loss effects that the divisions are not held responsible for, including income taxes and other reconciliation items.

The book value of assets is used as a measure of firm size. Rate of return on Equity (ROE) is the return after all labor and interest expenses have been deducted from the earnings. It measures the return to the owner of the business for their capital investment and can be compared to alternative investments. Liquidity (cash flow) is the ability of a firm business to meet financial obligations as they come due in the short term, without disrupting the normal operations of the business. It is measured by the Current ratio which is Current assets divided by the Current liabilities. It is a basic indicator of short-term debt servicing and/or cash flow capacity and also indicates the extent to which current assets, when liquidated, will cover current obligations. Firms with highly liquid assets or high profitability have less incentive to engage in hedging because they are exposed to a lower probability of financial distress. Liquidity is measured by the quick ratio, i.e. quick assets divided by current liabilities). Profitability is measured as EBIT divided by book assets. Cash flow refers to the amount of money available to meet the financial obligations of the company. 

Solvency on the other hand gauges the firm’s ability to pay all financial obligations if all assets are sold and to continue viable operations after financial adversity (Miller et al., 1966). It is measured by Debt to asset ratio, Debt to equity ratio and Equity to asset ratio. Finally yet importantly are ratios. Commonly used financial ratios can be applied to evaluate the performances of operators and top management more accurately. Performance measurement is perhaps the most important, yet most misunderstood and most difficult, task in management accounting. Traditional accounting performance measurement employs financial techniques such as Return on Assets (ROA) and Return on Equity (ROE) These have been criticized for being backward looking, unable to measure intangible resources and not suitable for assessing performance of investments in new technologies and markets which firms require to successfully compete in global markets (Seoh, 2012).

2.3 Effect of stores management on organizational performance 

Stores management plays an important role in the growth and survival of an organization in the sense that failure to an effective and efficient management of stores, will mean that the organization will lose customers leading to poor services delivery and sale will decline. 

In most cases, the level of demand of goods and the time required for supply cannot be known with certainty. Therefore, to ensure product availability, the organization maintains additional amount of safety stock to meet regular production and market needs. Firms should invest in stock control for precautionary motive to act as a buffer or link between demand and supply so that production can be geared to a more constant output. Precautionary motive necessitates holding of inventories to guard against the risk of unpredictable changes in demand and supply forces and other factors (Pandey, 2002)

According to Kenneth and Brian (2006) includes keeping stores includes the following reason:- Reduce the risk of supplier failure or uncertainty- safety and butter stocks are held to provide some protection against such as strikes, transport breakdowns due to floods or snow, crop failures, wars and similar factors. Protect against lead time uncertainties, such as where supplier’s replenishment and lead time are not known with certainty – in such case an investment in safety stocks is necessary if customer services is to maintain at acceptable levels. Meet unexpected demands or demands for customization of products as with agile production and smooth seasonal or cyclical demand.

Kakuru (2000) illuminates that inventories should be held to improve customer service and therefore goods should be spotted at a place where customers can get them in the quantities they wish. The transaction motive is aimed at facilitating smooth operations on daily basis. According to Pandey (2002) Transaction motive emphasizes the need to maintain inventories to facilitate smooth production and sales operation. Firms should maintain back up stores either in excess or low levels to take advantage of current and future demands or price fluctuations. They should therefore purchase goods and stock them in advance when they anticipate price increase in future and also prepare for contingencies that may befall a company, for instance, strikes, prices, goods among others (Kakuru, 2000).

Lucay (2003) observes that excessive levels of stock are undesirable because they increase the risks of stores becoming obsolete, stock loss through damage and theft, increased storage costs like rent, insurance and unnecessary tie up of the firm’s funds. He further state that a firm would be foregoing profits when it continues maintaining excessive levels of stores, which implies that the probability position of the firm is being threatened in the long run since funds are not being invested in other profitable ventures. Lower levels of stores are also undesirable because it interrupts production, loss of good will and high ordering costs especially when ordering is frequent. Inadequate stores levels leads to business closure due to shifting of customers to other efficient suppliers as a result of production/ operation interruptions (Gittinger 1995).

According to Lynch (2005), the main objective of stores management is to minimize the total cost of relevant costs to ensure profitable operations. Because of value attributed to stores management, two cardinal decisions must be faced if the stores management is; how much we buy at a time? When we buy (or manufacture)?

According to Pandey (2002), in many cases where stores management decisions have been effective, inventory planning models have been effective; inventory- planning models have been developed and implemented focusing especially on the twin problems of inventory size and timing. Usually stores management modes are defined to achieve a balance between the costs of acquiring and holding inventory. These costs are the ones that affect organizations profitability. These models are developed in order to help management maintain inventories of optimal level that will help the organization to realize profits. To be specific, the objective of stores management models is to maintain adequate inventory levels of minimum inventory costs. They specify the economic order quantity and re-order point and if well observed, companies earn profits (Hilton, 2000). 

Economic order quality is the quality of inventory that should be ordered at once. They further noted that, the quantity of inventory ordered at once affects inventory ordering and holding costs and will ultimately have a bearing on profitability. For instance, if a few large orders are placed, annual ordering costs will be low, but annual holding costs will be high (Lynch, 2005).

Conversely, if many small orders are placed over all ordering costs will be high but annual holding costs will be low. To be profitable, it is necessary to determine it increasing the order size to obtain large volume discounts and slightly lowering costs will be more off- set at a higher holding cost. The scholars agreed that profitability would only be achieved at optimum level of relevant costs i.e. holding costs and ordering costs (Lynch, 2005)

According to Pandey (2002), this is the level of which an order for additional inventory should be placed, because inventory cannot be ordered and received instantly. Orders for additional inventories should be placed before current stocks are depleted. The re-order point must consider both the lead time required to replenish stocks after on order is placed and inventory demand during the lead time. 

Hilton (2000) agreed with other scholars and further observed that, because of the variation in lead-time and the daily demand for inventory, inventories are cushions to prevent “Stock out” and the resulting loss of sales or disruption of production.

As already noted above, in a merchandising establishment, stock out costs includes the extra costs of processing back orders and opportunity cost of lost sales is frequently specified as the selling price less the invoice price, opportunity costs are considered greater if dissatisfied customers subsequently patronize other establishments. In this case, the profitability of an organization remains fragile if no proper controls are considered .greater it dissatisfied customers subsequently patronize other establishments. In this case, the profitability of an organization remains fragile if no proper controls are ensured (Hilton, 2000).

Excessive inventories are the enemy of retail profitability. For stores management to be an effective profitability improvement tool, corporate culture must ensure that employees are empowered to make it successful (Laugero, 2002). Organizations like black and Decker fully realize the relationship between inventory production and profit. This is an international Corporation, with annual sales in excess of and 1 billion. It is the world’s largest manufacturer of power tools, and because of large required investment in inventory and the total cost associated with such, managers are alert for ways to control inventory. Gibson (2008) says that stores management is an important area of financial control, which is often neglected not knowing that a small percentage saving on inventory costs will represent millions of shillings on natural scale. All stocks represents on investment so they should keep to an absolute minimum. 

CHAPTER THREE

METHODOLOGY

3.1 Introduction

This  chapter  presents  methods  and procedures  that the researcher  used when  assessing  the findings  of the  study. It presents research design, sample population and size, data collection instruments, data type, data processing and presentation and the problems encountered during the process of data collection and limitation of the study.

3.2 Research Design

The research was designed in such a manner, which enabled the researcher to meet the objectives of the study, the researcher therefore used both qualitative and quantitative research designs, which was descriptive in nature. The descriptive aspect of the research design was used to investigate the effect of effective stores management on organizational performance.

3.3 Study population

The population of the study was 140 staff members of Sadoline comprising of purchasing officers, store keeper, site foreman, site workers, accountant, technical manager and the general manager.

3.4 Sampling Size and selection

The sample size of 50 respondents was determined by formulae of Krejcie Morgan (1970). The researcher used purposive sampling to select the samples from the population. Here, the researcher chose the sample based on who she thought was appropriate for the study. Simple random sampling was used to limit on the biasness of purposive sampling.

Table 3.1: Sample Size

3.5 Source of data

Data was collected from both primary and secondary source.

Primary data was collected by use of questionnaires and interview guide. Secondary data was collected from published journals, reports, text books, and company records.

3.6 Data Collection Methods and Instruments

The study used both questionnaire and interview method

3.6.1 Questioning method

These involved a set of questions which were usually arranged systematically and logically to achieve to specific research objectives. A questionnaire is a self-administered questionnaire is the only way to elicit self-reports on people’s opinion, attitudes, beliefs and values. Questionnaires were used to collect data from the selected respondents using structured questions (Sekaran, 2003). The researcher used the questionnaire method whereby she drafted to respondents structured questions. This method was used because some respondents had no time to sit down and answer during interviews.

A questionnaire guide was used and this was in form of close ended in nature and this allowed the study respondents to fill the questionnaire in the study field. The questionnaire method of data collection was used because of being cheap and that the method collected responses with minimum errors and high level of confidentiality.

3.6.2 Interviewing method 

According to Christopher (2014), interview involves a one-on-one conversation with one person acting in the role of the interviewer and the other in the role of the interviewee. The researcher endeavoured to get first-hand information by making appointments with individual respondents to answer questions related to the study topic. This method was chosen because it helped in the collection of more data as it allowed the interaction of both the researcher and the respondents. It was cheap and did not waste much time. It was used on administrators who did not have time to sit down and answer the questionnaires but could provide information verbally.

An interview guide was drafted with a set of questions that the researcher asked during an interview and this was structured (close ended) in nature. Interview guide was used by the study since the methods helped in the collection of more data as it allowed the interaction of both the researcher and the respondents. It increased mutual understanding and co-operation between the parties and suitable candidates could be selected through interview because the interviewer knew a lot about the candidate by this process. Interview helped to collect the fresh, new and primary information as needed.

3.7 Quality Control of Instruments

Validity refers to the degree to which a test measures what it is supposed to measure and consequently permits appropriate interpretation of scores. As suggested by (Kathari, 2003; Enon, 1998), content and construct validity was determined by expert judgment. The researcher thus used help of the supervisor who examined and confirmed content validity by checking the items’ and  content coverage, relevance, clarity of questionnaire, persistency and ambiguity.

The reliability of research instruments was ensured by the researcher throughout the study, discussing them with the supervisor when seeking expert opinion, taking great care in the choice of section, order and proper structure of questions. The researcher developed instruments that were easy to understand for instance interviews were conducted in the language that suited respondents.

3.8 Data processing, analysis and presentation

The data collected was edited for accuracy, completeness and to find out how well the answered questionnaires, interview guides and checklist were and this was done in line with the questionnaires, interview guides and checklist. The edited data was coded. Coding involved assigning numbers to similar questions from which answers was given unique looks to make the work easier. In this case Ms-excel were used to analyze the coded data.

Frequency tables were worked out basing on the data entered. In this frequency tables analysis was done with a corresponding percentage. However a Pearson correlation coefficient was used to determine the relationship between the two variables.

3.9 Limitations and anticipated solution

Respondents were not willing to give confidential information, which was sufficient to the researcher. However, the researcher convinced them that research was intended to help them improve on their problems.  

There was too much pressure as a result of limited time for the researcher. However, the researcher devoted most of the time on the research. 

Financial constraint since research requires money for printing and transport. However, the researcher minimized the costs as lowest as possible.

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS

4.0 Introduction

This chapter provides for the study findings, the interpretation of the findings and presentation. The chapter presents the findings in line with the set objectives:

4.1 Characteristics of respondents

This aspect of the analysis deals with the characteristics of the respondents of the questionnaires. The results obtained are presented below;

Table 4.1: Distribution of Respondents by Sex

Source: Primary Data

From the table above, male respondents formed the highest percentage (60%) compared to the female with only 40%. Males were found to be more active in participation which explains their highest number. However, both were considered since it was important to get views of women in the study.

Table 4.2: Age of Respondents

Source: Primary Data

The majority (42%) of the respondents were predominantly between the ages of 31 and 36 years. A significant percentage (26%) of the respondents were between 25 and 30years. While 24% of the respondents were in the age bracket of 36 and 40years and only 8% of the respondents were above 40years. This implies that 31 and 36years had the highest number because these are the most active age group hence they are actively involved in management, therefore they had rich experiences and could also appreciate the importance of the study.

Table 4.3: Highest Level of Education

Source: Primary Data

The table above shows that most of the respondents (50.0%) were of diploma level, (46.0%) were of Bachelor level therefore, provided information based on the academic knowledge, skills and experience they have gain in management.

Table 4.4: Number of Years in Service

Source: Primary Data

According to the table above, majority of the study respondents (74%) had worked in the organization, 22% of them had worked in the organization between 6-10years and only 4% had been worked there between 11-15years. This implies that provided information was based on experience.

4.2 Objectives of store management

Objective one was to examine the objectives of store management at Sadoline paints limited. Respondents were asked to show their level of agreement on the objectives of store management. The results were obtained and are presented below;

Table 4.5: Objectives of Store Management

Source: Primary Data

Table above show that majority of study respondents (90%) agreed with ensures continuous supply of materials, 6% of them disagreed while 4% of them were not sure. This implies that the organization ensures continuous supply of materials to facilitate an interacted production.

Findings also indicate that majority of the respondents (92%) agreed with maintains sufficient stocks of raw materials in periods of short supply, 4% of the study respondents disagreed, 4% of the respondents were not sure. This implies that store management is effectively utilized and it has led to effectiveness in organization’s operations.

Table above also shows that majority of the study respondents (50%) agreed with maintain sufficient finished goods for smooth sales operation, while 28% of them agreed, a significant percentage (22%) were not sure implying that as a result of stores management, the organization produces in right amounts. 

The study findings as indicated in the table above indicate that majority of the respondents (54%) agreed with minimize carrying costs, while 30% of them disagreed, 16% of the respondents were not sure. However, most of the responses were positive implying that as a result of the application of store management in the operation, minimal losses have been registered.

The study findings as indicated in the table above, majority of the respondents (44%) agreed with maintain investment in inventory to maximize profitability, 42% of the respondents disagreed, 14% of the respondents were not sure. However, from the results most of the respondents were on a positive side implying that store management has reduced inventory costs.

4.3 Performance of Sadoline paints limited

Objective two of the study was to establish the performance of Sadoline paints limited, Uganda.

Table 4.6: Performance of Sadoline paints limited

Source: Primary Data

According to the table above, most of the respondents (50%) of the respondents agreed with customers demand are met, 38% of them disagreed and only 12% of them were not sure. This implies that the application of store management has enabled customer demand to be met since most respondents were in agreement with the statement.

Table above also indicate that 52% of the respondents agreed with there is increased market share, 32% of the respondents disagreed, 16% of the respondents were not sure. This implies that the application has totally led to market share. 

The table indicates that, most of the respondents (54%) of them agreed, 32% of them disagree, 16% of the study respondents were not sure. This implies that store management maximizes organization’s profits. 

Respondents (82%) agreed with financial obligations are met on time, 10% of them disagreed and 8% of them were not sure. This implies controlling inventory in the organization helps in proper inventory planning and scheduling thus effective performance of the organization.

The table above shows that most of the respondents (86%) agreed with all improved rate of return on assess, 6% of them disagree while only 8% of them were not sure. This implies that in the effort of inventory control, the organization has improved its rate of return on assets.

4.4 Effect of store management on organizational performance

Objective three was to examine the relationship between stores management and performance. Respondents were required to show their level of agreement on the relationship of the valuables and the results were obtained and are presented below;

Table 4.7: Effect of store management on organizational performance

Source: Primary Data

The table above shows that majority of the study respondents (72%) agreed, while 16% of them were not sure and 12% of the study respondents disagreed. This implies inventory control reduces on operational costs.

According to the table above, most of the respondents (70%) agreed with there is an increase in market share, 16% of them disagreed and 14% of them were not sure. This implies the organization makes sure that there is an increase in market share.

Study findings in the table above indicate that 72% of the respondents agreed with customers are satisfied, 4% of them disagreed, while 24% of the respondents were not sure. This implies that the organization’s customers are satisfied.

According to the table above, majority of the respondents (66%) disagreed, 22% of them agreed with the company gets damaged goods from its stored, 14% of the respondents disagree. This implies that store management has increased profits. 

CHAPTER FIVE

DISCUSSION OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction

The data was analyzed using description and percentages. This chapter therefore presents the discussion of the study in sub-sections on the basis of the specific objectives set to achieve as analyzed in chapter four, the conclusion, and recommendations. 

5.1 Discussion of findings

• Objectives of store management at Sadoline paints limited.

Study findings revealed that majority of study respondents (90%) agreed with ensures continuous supply of materials. This implies that the organization ensures continuous supply of materials to facilitate an interacted production. The organization materials needed for production always arrive at the right time. The findings sideline with Kortz (2003) who noted that store management recognizes high costs associated with holding high inventory level  and as such it has become important in most organizations to order inventory just in time of production so as to cut costs of holding inventory like storage lighting, heating, security, insurance and staffing.

Findings also indicate that majority of the respondents (92%) agreed with maintains sufficient stocks of raw materials in periods of short supply. This implies that store management is effectively utilized and it has led to effectiveness in organization’s operations. Using forecasting the organization always stocks materials that may be sufficient to cover for when the demand is high for the customers with goodwill and loyal customers and when there is shortage of supply of materials. This study finding concurs with Kenneth and Brian (2006) who in his study argued that keeping stores includes reducing the risk of supplier failure or uncertainty- safety and butter stocks are held to provide some protection against such as strikes, transport breakdowns due to floods or snow, crop failures, wars and similar factors. Protect against lead time uncertainties, such as where supplier’s replenishment and lead time are not known with certainty – in such case an investment in safety stocks is necessary if customer services is to maintain at acceptable levels. Meet unexpected demands or demands for customization of products as with agile production and smooth seasonal or cyclical demand.

Results further showed that majority of the study respondents (50%) agreed with maintain sufficient finished goods for smooth sales operation implying that as a result of stores management, the organization produces in right amounts. The findings are in agreement with Horngren et.al (2002) who stated that store management leads to a decrease in inventories, waste reduction, employee involvement and customer satisfaction. Therefore, employing the system will cause a company to save money and increase the number of the customers. In short, store management is useful as it can be used to produce need amount of products.

The study findings as indicated in chapter four indicated that majority of the respondents (54%) agreed with minimize carrying costs implying that as a result of the application of store management in the operation, minimal losses have been registered. Findings concur with Lynch (2005) who stated that the main objective of stores management is to minimize the total cost of relevant costs to ensure profitable operations. 

Results revealed that, majority of the respondents (44%) agreed with maintain investment in inventory to maximize profitability implying that store management has reduced inventory costs. Findings are consistent with Coyle, Bardi and Langley (2003) who noted that stores management plays an important role in the growth and survival of an organization in the sense that ability to an effective and efficient management of stores will mean that the organization will increase customers leading to better services delivery and sale will increase.

5.1.2 Performance of Sadoline paints limited, Uganda.

Findings indicated that most of the respondents (50%) of the respondents agreed with customers demand are met. This implies that the application of store management has enabled customer demand to be met since most respondents. There is an agreement with Kenneth and Brian (2006) who argued that store management helps to meet unexpected demands or demands for customization of products as with agile production and smooth seasonal or cyclical demand.

Study findings revealed that 52% of the respondents agreed with there is increased market share. This implies that the application has totally led to market share, though it does some time as agreed upon by 32% of the respondents. This finding agree with (Laugero, 2002) who noted that effective store management improves service delivery in a manufacturing firm which in turn widens the market base of the firm.

Results indicated that, most of the respondents (54%) of them agreed with store management maximize organization’s profits. This implies that as a result of store management, organization profits as its able to carry out its activities in an effective and efficient manner.  This study concurs with Gittinger (1995) who stated that a firm would be foregoing profits when it continues maintaining excessive levels of stores, which implies that the probability position of the firm is being threatened in the long run since funds are not being invested in other profitable ventures. Lower levels of stores are also undesirable because it interrupts production, loss of good will and high ordering costs especially when ordering is frequent. Inadequate stores levels leads to business closure due to shifting of customers to other efficient suppliers as a result of production/ operation interruptions. Therefore effective store management ensures increased profits for the organization.

Study findings revealed that (82%) of the respondents agreed with financial obligations are met on time. This implies controlling inventory in the organization helps in proper inventory planning and scheduling thus effective performance of the organization. This is in line with (Miller et al., 1966) who argued that a firm that is able to meet all their financial obligations and to continue viable operations after financial adversity is because of its effective management practices such as effective store management.

Results showed that most of the respondents (86%) agreed with all improved rate of return on assess. This implies that in the effort of inventory control, the organization has improved its rate of return on assets. This is in agreement with (Seoh, 2012) who noted that stores as an asset on the balance sheet of companies has taken an increased significance because of the strategy of many firms to reduce their investment in fixed assets, that is plants, ware houses, office buildings, equipment and machinery, and soon.

5.1.3 Effect of stores management on performance of Sadoline paints limited, Uganda

Findings revealed that majority of the study respondents (72%) agreed with carrying costs are minimized. This implies inventory control reduces on operational costs. This agrees with who (Laugero, 2002) noted that operating profit reflects ability to generate revenues and control costs. It is revenue available to compensate debt and equity capital.

Results in chapter four revealed that most of the respondents (70%) agreed with there is an increase in market share. This implies the organization makes sure that there is an increase in market share. This finding does not agree with (Laugero, 2002) who noted that effective store management improves service delivery in a manufacturing firm which in turn widens the market base of the firm.

Study findings indicated that 72% of the respondents agreed with customers are satisfied. This implies that the organization’s customers are satisfied. The organization has recruited an experienced purchasing officer who authorizes purchases thus, he knows the right products to buy, and the organization therefore does not have to make losses on wastes of trial and error. Horngren et.al (2002) who stated that store management leads to a decrease in inventories, waste reduction, employee involvement and customer satisfaction. Therefore, employing the system will cause a company to save money and increase the number of the customers.

According to the table above, majority of the respondents (66%) disagreed with the company gets damaged goods from its stored. The organization inspects goods on receipt to ensure that there are no damaged products, minimal errors, they are in right amounts. Findings are consistent with Coyle, Bardi and Langley (2003) who noted that stores management plays an important role in the growth and survival of an organization in the sense that failure to an effective and efficient management of stores will mean that the organization will lose customers leading to poor services delivery and sale will decline. 

5.2 Conclusion

The study concludes that the objectives of stores management is to ensure continuous supply of materials, maintain sufficient stocks of raw materials in periods of short supply, minimize carrying costs, also maintain sufficient finished goods for smooth sales operation and maintain investment in inventory to maximize profitability.

The performance of Sadoline paint has been realized since customer demand are met, there is increased market share, profits are maximized, financial obligations are met on time and there is improved rate of return on assets.

As a result of store management carrying costs have been minimized, customers are satisfied, profits and market share have increased.

5.3 Recommendations

The organization should put a lot of efforts in the following; 

There is installation of a strong control and inspecting system so as to detect fraud and theft of stock, the stores should be enlarged and tidy so as to ensure maximum usage of space among others and there is need to segregate duties of receipt and recording of stock in order to reduce fraud and theft.

There is need for organization to easy out effective store management for it ensures reliability. Holding inventory helps organization to ensure reliable delivery to customers and increase performance.

For easy identification of materials in the stores and to reduce fatigue, appropriate coding system should be employed. This can be done by using letters, figures or a combination of both. The system could be based upon the nature of the stores items, the purpose for which items are bought, or on any other basis regarded as suitable for the business. This would Improve performance of Sadoline paints ltd.

5.4 Areas of Further Research

Further research should be done in the areas of;

• The importance of inventory control systems on the performance of organizations
• The role of record management towards proper inventory management 
• The Importance of inventory management practices on the performance of large organizations.

REFERENCES

Ayad .K. Ali. (2011)Inventory Management in Pharmacy Practice; A Review of literature. Archives of pharmacy practice.

Coyle.J.J, Bardi.E.J, & Langley. C .Jr, (2003) The Management of Business Logistics: A Supply Chain Perspective (7th ed.).Manson South –Western.

Dimitrios, P. (2008). The effect of inventory management on firm performance, International Journal of Productivity and Performance Management, 57 (5).

Drury Colin, (2000) Management and cost accounting 5th edition, Thompson learning  

Gibson, S. (2008). Round table on Economic Growth and Social Justice.  Advertising Council Inc. New York.

Harrisson, F. (2000). Supply chain management workbook, Butterworth/ Heinemann, Great Britain.

Horngren, C.T.; Foster, G; and Datar, S.M. (2000) Cost Accounting. 10th edition, Prentice Hall.

Jabareen.Y. (2009) “Building a Conceptual Framework: Philosophy, Definitions, and Procedure”. International Journal of Qualitative Methods 2009, 8(4).

Konke, K. (2003). Management of Finance Company, Sixth Edition, International Thomson Business Press, London.

Kortz N.K (2003). Purchasing and Material Management, 1st Edition, Heinemann Educational Publishers Limited, Oxford.

Laugero, J. (2002). Financial Management and Policy, Eleventh Edition. Prentice Hall Lin A Simon and Schuster Company, U.S.A.

Lazaridis, I., and Dimitrios, T. (2005). The relationship between working capital management and profitability of listed companies in the Athens Stock Exchange, Retrieved from http://ssrn.com/ on July 2013.

Lynch, K. (2005), Frontiers of Development Economics. IBRD Washington D.C 

Miller, R. (2010). Inventors Control: Theory and Practice. New Jersey: Prentice Hall.

Ogbo, A. I & Onekanma I.V. (2014) “The Impact of Effective Inventory Control Management on Organizational Performance”: Mediterranean Journal of Social Sciences, MCSER Publishing, Rome-Italy, Vol. 5 No 10 June 2014

Ogbo, A.I. (2011)”Production and Operations Management”. Enugu: De-verge Agencies Ltd.

Pandey,  M. (2002).  Financial Management (8th Ed). New Delhi publishers

Schonsleben, P. (2000). Integral logistics Management, planning & control of comprehensive Business processes, The St-Lucie Press/AIPCS Series.

APPENDICES

APPENDIX I: QUESTIONNAIRE FOR THE COMPANY WORKERS

I am a 3rd year student pursuing a Bachelor of Administrative and Secretarial Science at Kyambogo University carry out a study on the “Assessing the Effect of stores management on organizational performance”, a case study of Sadoline paints ltd. Your feedback is very important as your inputs will be used for academic purposes only. I greatly appreciate if you could take a few minutes to provide me with information. Your response will be kept confidential and it will not be divulged to any person or institution outside this corporation. 

SECTION A: BIOGRAPHIC DATA

(N.B Answer by Ticking where applicable) 

1. Gender 

 (1) Female                                                             (2) Male 

2. Age in years

(1) 25-30                                                                   (2) 31-36

(3) 36-40                                                                   (4) Above 40

3. Education Level 

(1) Diploma                                                             (2) Bachelor

(3) Postgraduate (4) Masters

4. Number of years in Service
5. 1-5years 2. 6-10years
6. 11-15years 4. Above 15years

SECTION B: OBJECTIVES OF STORE MANAGEMENT

5. In this section, tick the best option by using strongly Agree (SA), agree (A), Not Sure (NS), Disagree (D). SD=1, D=2, NS=3, A=4, SA=5

SECTION C: PERFORMANCE OF SADOLINE PAINTS LIMITED

7. In this section, tick the best option by using strongly Agree (SA), agree (A), Not Sure (NS), Disagree (D). SD=1, D=2, NS=3, A=4, SA=5

SECTION D: THE EFFECT OF STORES MANAGEMENT ON PERFORMANCE

8. In this section, tick the best option by using strongly Agree (SA), agree (A), Not Sure (NS), Disagree (D). SD=1, D=2, NS=3, A=4, SA=5

Thank you for your time

APPENDIX II: INTERVIEW GUIDE FOR COMPANY WORKERS

1. What are the objectives of store management at Sadoline paints limited?
2. What are the indicators of performance in Sadoline paints limited, Uganda?
3. What is the effect of stores management on performance of Sadoline paints limited, Uganda?

Thank you for your time