Inventory Management Practices, Challenges and Prospects-The Case of Asella Malt Factory

Inventory management is a critical management issue for organization regardless of their size and types. The overall objective of this study was to assess inventory management practice; challenges and prospects of Asella Malt Factory. The study used descriptive research design in which both quantitative and qualitative type of data was used for the purpose of the study. The target populations were 247 employees of the factory. To come up with a precise sample size stratified sampling technique was employed. As means of data collection instrument, questionnaire and interview were applied. Both open and close ended questionnaire were distributed to 153 employees of the factory, 140 (91.5%) complete responses were returned from the respondents. Moreover, semi-structured interview was conducted with the head purchasing and property administration to supplement data collected using questionnaire. The SPSS version 20 was used to process the primary data which is collected through questionnaire. Accordingly, the result of the study revealed that the factory did not give an emphasis to inventory management practices like EOQ, and JIT which enabled the factory to have adequate quantities of high quality items available to serve customer needs. The study further indicates that the main challenges that hindered implementation of inventory management practices in the factory were; reluctant to invest in modern technologies which enhance effective inventory management, In adequate resource for implementing inventory management practices, lack of proper training, failure of top management to involve employees in inventory management related decision and poor record keeping, Poor coordination and communication, unreliable suppliers and poor infrastructure. Finally, the study recommends that the factory should embrace inventory management practices so as to improve and enhance effective inventory management. In addition the factory should increase resource allocation to modern technology and staff training so as to develop the necessary skills, update their knowledge which enables the factory to overcome the problem of implementing inventory management practices.