Role of Inventory Visibility on Performance of Manufacturing Sector in Sub-Saharan Africa: A Study in Kenya
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Abstract
Inventory visibility is the ability of an organization to streamline its inventory tracking methods so as to ensure the right amount inventory is stocked based on the customers’ needs and the supply rates of the suppliers. Having a high degree of inventory visibility is increasingly seen as a competitive advantage in modern supply chain management, as it allows for greater agility and responsiveness to market changes. One of the compelling issues that have been facing the manufacturing industry in Kenya is the inability to meet customer demands and high waiting times. Previous literature has shown that with a visible inventory, manufacturing firms could enhance their delivery effectiveness and significantly reduce waiting time. This however lacks empirical backing from a Kenyan perspective, hence the subject of the study. The study was anchored on the transaction cost theory. Descriptive research design was adopted, and the large manufacturing firms in Kenya were targeted. A sample of 160 firms was selected. Through a structured questionnaire, primary data was collected from the heads of supply chain in the 160 companies. The findings revealed that inventory visibility is an instrumental determinant of the performance of the manufacturing industry in Kenya. It was established that inventory visibility enabled manufacturing companies to have real-time or near-real-time information about the quantity, location, and status of its products or goods throughout the supply chain. This allowed for accurate tracking and management of inventory levels, which is crucial for efficient operations and customer satisfaction.
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Benedict Mutinda Kimwaki. (2023). Role of Inventory Visibility on Performance of Manufacturing Sector in Sub-Saharan Africa: A Study in Kenya. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 3(3), 174-186. https://doi.org/10.33258/economit.v3i3.1004
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References
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Lambert, D.M., & Croxton, K.L. (2015). An evaluation of process-oriented supply chain management frameworks. Journal of Business Logistics, 26(1), 25-35.
Lehtonen, J., Smaros, J. & Holmstrom, J. (2015). The effect of demand visibility in product introductions. International Journal of Physical Distribution & Logistics Management, 35(2), 101-115.
Luzzini, D., Caniato, F., Ronchi, S. & Spina, G. (2012). A transaction costs approach to purchasing portfolio management. International Journal of Operations and Production Management, 32(9), 1015-1042.
Mahapatra, S., William, W. S., & Padhy, R. (2019). Alignment in the base of the pyramid producer supply chains: The case of the handloom sector in Odisha, India. Journal of Business Logistics, 40(2), 126-144.
Messina, D. (2019). Visibility in complex supply chains: an information management approach to support risk and disruption management decisions. Retrieved from https://core.ac.uk/reader/302942620
Mokadem, M. (2016). ISO 9000 moderation role over supply chain alignment in manufacturing context. Journal of Manufacturing Technology Management, 27(3), 338-363.
Muhr, S. (2020). Inventory Level Visibility: Reasons Causing Lack in Service Field Operations. Retrieved from https://www.diva-portal.org/smash/get/diva2:1461298/FULLTEXT01.pdf
Mukhtar, A., Romli, A., Noor, N. M., Abdullateef, M., & Al-Bashiri, H. (2021, August). Inventory Visibility Scenario to Reduce Safety Stock in Supply Chain Network Using Blockchain Hyperledger Composer. In 2021 International Conference on Software Engineering & Computer Systems and 4th International Conference on Computational Science and Information Management (ICSECS-ICOCSIM) (pp. 535-540). IEEE.
OECD. (2010). Integrity in Public Procurement: Mapping out Good Practices for Integrity and Corruption Resistance in Public Procurement.
Orodho, J.A. (2014). Techniques of Writing Research Proposals And Reports In Education And Social Sciences. Nairobi: Masola Publishers.
Rashid, K. & Aslam, H. (2012). Business excellence through total supply chain quality management. Asian Journal on Quality, 13(3), 309-324.
Sangari, M. S., & Abbasi, M. (2017, April). An integrated framework of enablers of strategic alignment in supply chain: A fuzzy DEMATEL approach. In Second international conference on industrial management.1, 1-10).
Saunders, M., Lewis, P., & Thorn, A. (2009). Research Methods for Business Students (4th ed.). Harlow: Prentice Hall Financial Times.
Semchenkova, S. V., Chulkova, G. V., & Lukasheva, O. L. (2019). Use of data of inventory and monitoring of lands in the complex development program of territories. International agricultural journal, 2.
Seshadri, B., & Baja, S. (2020). Inventory Visibility across Channels Aspire Systems - Inventory Visibility across Channels. Technical Article. Retrieved from https://www.aspiresys.com/articles/inventory-visibility-across-channels.pdf
Sheel, A., & Nath, V. (2019). Effect of blockchain technology adoption on supply chain adaptability, agility, alignment and performance. Management Research Review.
Singha, D., & Verma, A. (2018). Inventory Management in Supply Chain. 7th International Conference of Materials Processing and Characterization, Materials Today Proceedings. 5 (2018) 3867–3872
Skipworth, H., & Julien, D. (2015). Supply chain alignment for improved business performance: an empirical study. Supply Chain Management: An International Journal, 20(5), 511-533.
Tenorio, O. M. L., Pascucci, S., Verkerk, R., Dekker, M., & van Boekel, T. A. (2021). What does it take to go global? The role of quality alignment and complexity in designing international food supply chains. Supply Chain Management: An International Journal, 26(4), 467-480.
Tinkham, W. T., Mahoney, P. R., Hudak, A. T., Domke, G. M., Falkowski, M. J., Woodall, C. W., & Smith, A. M. (2018). Applications of the United States Forest Inventory and Analysis dataset: A review and future directions. Canadian Journal of Forest Research, 48(11), 1251-1268.
Wever, M., Wognum, N., Trienekens, J., & Omta, O. (2010). Alignment between chain quality management and chain governance in EU pork supply chains: A Transaction-Cost-Economics perspective. Meat science, 84(2), 228-237.
World Bank. (2013). “Reducing Supply Chain Barriers Could Increase Global GDP Up To 6 Times More Than Removing All Import Tariffs Report”, Switzerland
Babbie, E. (2011). The practice of social research (11th ed.). New York: Thompson Learning.
Bharadwaj, N., & Matsuno, K. (2012). Investigating the antecedents and outcomes of customer firm transaction cost savings in a supply chain relationship. Journal of Business Research, 5(9), 62-72.
Bolton, J. M., & Dwyer, K. (2017). 1 Achieving supply chain alignment through behavior change. In Gower Handbook of Supply Chain Management (pp. 621-636). Routledge.
Carr, A.S. & Smeltzer, L.R. (2012). The relationship between information technology use and buyer-supplier relationships: an exploratory analysis of the buying firm’s perspective. IEEE Transactions on Engineering Management, 49(3), 293-304.
Carr, L. P., & Ittner, C. D. (2012). Measuring the cost of ownership. Journal of Cost Management 7(2), 42-51.
Castano, R., & Mills, A. (2013). The consequences of hospital autonomization in Colombia: a transaction cost economics analysis. Health and Policy Planning, 2(8), 157-164.
Chae, B., Yen, R.H. & Sheu, C. (2015). Information technology and supply chain collaboration: moderating effects of existing relationships between partners. IEEE Transactions on Engineering Management, 52(4), 440-458.
Cheptum, F. J. (2019). The Effect of Debtors’approval On Financial Performance Of Manufacturing Firms In Kenya. American Journal of Finance, 4(1), 31-56.
Chhetri, P., Hashemi, A., Lau, K. H., & Lim, M. K. (2022). Aligning supply chain complexity with product demand and design characteristics. International Journal of Logistics Research and Applications, 25(8), 1137-1163.
CIPS. (2008). How do we measure up? An Introduction to Performance Measurement of the Procurement Profession.
Dobos, I., & Vörösmarty, G. (2019). Inventory-related costs in green supplier selection problems with Data Envelopment Analysis (DEA). International Journal of Production Economics, 209, 374-380.
Doyle, P. (2014). Marketing Management and Strategy. Hemel Hempstead: Prentice Hall International
Dubey, R., Altay, N., Gunasekaran, A., Blome, C., Papadopoulos, T., & Childe, S. J. (2018). Supply chain agility, adaptability and alignment: empirical evidence from the Indian auto components industry. International Journal of Operations & Production Management.
Dumond, L., & Siferd, S. P. (2010). Purchasing: the cornerstone of the total cost of ownership concept. Journal of Business Logistics, 14(1), 163-184.
Ellram, L. M. (2013). Total cost of ownership: elements and implementation. International Journal of Purchasing and Materials Management, 29(3), 3-11.
Foster, A., & Feitzinger, E. (2011). Using total profit analysis to model supply chain decisions. Journal of Cost Management (July/August).
Fredikind, T. (2014). Transaction Cost Economics as a contributing theory to Supply Chain Management: an assessment and application on theoretical basis.
Gachanja, I. M., Nga’nga, S. I., & Kiganane, L. M. (2020). Influence of organization learning on innovation output in manufacturing firms in Kenya. International Journal of Innovation Studies, 4(1), 16-26.
Gattorna, J. (2016). Dynamic supply chain alignment: a new business model for peak performance in enterprise supply chains across all geographies. CRC Press.
Gattorna, J. (2017). Strategic supply chain management creating shareholder value by aligning supply chain strategy with business strategy. In Strategic Supply Chain Alignment (pp. 32-52). London: Routledge.
Gligor, D., Feizabadi, J., Russo, I., Maloni, M. J., & Goldsby, T. J. (2020). The triple-a supply chain and strategic resources: developing competitive advantage. International Journal of Physical Distribution & Logistics Management, 50(2), 159-190.
Gonzalez-Benito, J., & Spring, M. (2010). Complementarities between JIT purchasing practices: An economic analysis based on transaction costs. International Journal of Production Economics, 6(1), 279-293.
Gunasekaran, A., Patel, C. & Tirtiroglu, E. (2016). Performance measures and metrics in a supply chain environment. International Journal of Operations & Production Management, 21(1/2), 71-87.
Hoang, T., & Elgamal, H. (2021). Inventory Visibility in Apparel Make-To-Order Production. Retrieved from https://www.misi.edu.my/wp-content/uploads/thesisresearch/2020/HebaMoha-Inventory%20Visibility%20in%20Apparel.pdf
Iranmanesh, M., Maroufkhani, P., Asadi, S., Ghobakhloo, M., Dwivedi, Y. K., & Tseng, M. L. (2023). Effects of supply chain transparency, alignment, adaptability, and agility on blockchain adoption in supply chain among SMEs. Computers & industrial engineering, 176, 108931.
Kakwezi, P., & Nyeko, S., (2010). Procurement Processes and Performance: Efficiency and Effectiveness of the Procurement Function: Makerere University Press, Kampala.
Kitainge, J. M., Bor, G., & Wanza, L. (2019). Channel communication strategy Influence on the performance of cement manufacturing firms in Kenya. European Journal of Management and Marketing Studies.
Kothari, C. R. (2014). Research Methodology Methods and Techniques (2nd ed.). New Delhi: New Age Publishers.
Lambert, D.M., & Croxton, K.L. (2015). An evaluation of process-oriented supply chain management frameworks. Journal of Business Logistics, 26(1), 25-35.
Lehtonen, J., Smaros, J. & Holmstrom, J. (2015). The effect of demand visibility in product introductions. International Journal of Physical Distribution & Logistics Management, 35(2), 101-115.
Luzzini, D., Caniato, F., Ronchi, S. & Spina, G. (2012). A transaction costs approach to purchasing portfolio management. International Journal of Operations and Production Management, 32(9), 1015-1042.
Mahapatra, S., William, W. S., & Padhy, R. (2019). Alignment in the base of the pyramid producer supply chains: The case of the handloom sector in Odisha, India. Journal of Business Logistics, 40(2), 126-144.
Messina, D. (2019). Visibility in complex supply chains: an information management approach to support risk and disruption management decisions. Retrieved from https://core.ac.uk/reader/302942620
Mokadem, M. (2016). ISO 9000 moderation role over supply chain alignment in manufacturing context. Journal of Manufacturing Technology Management, 27(3), 338-363.
Muhr, S. (2020). Inventory Level Visibility: Reasons Causing Lack in Service Field Operations. Retrieved from https://www.diva-portal.org/smash/get/diva2:1461298/FULLTEXT01.pdf
Mukhtar, A., Romli, A., Noor, N. M., Abdullateef, M., & Al-Bashiri, H. (2021, August). Inventory Visibility Scenario to Reduce Safety Stock in Supply Chain Network Using Blockchain Hyperledger Composer. In 2021 International Conference on Software Engineering & Computer Systems and 4th International Conference on Computational Science and Information Management (ICSECS-ICOCSIM) (pp. 535-540). IEEE.
OECD. (2010). Integrity in Public Procurement: Mapping out Good Practices for Integrity and Corruption Resistance in Public Procurement.
Orodho, J.A. (2014). Techniques of Writing Research Proposals And Reports In Education And Social Sciences. Nairobi: Masola Publishers.
Rashid, K. & Aslam, H. (2012). Business excellence through total supply chain quality management. Asian Journal on Quality, 13(3), 309-324.
Sangari, M. S., & Abbasi, M. (2017, April). An integrated framework of enablers of strategic alignment in supply chain: A fuzzy DEMATEL approach. In Second international conference on industrial management.1, 1-10).
Saunders, M., Lewis, P., & Thorn, A. (2009). Research Methods for Business Students (4th ed.). Harlow: Prentice Hall Financial Times.
Semchenkova, S. V., Chulkova, G. V., & Lukasheva, O. L. (2019). Use of data of inventory and monitoring of lands in the complex development program of territories. International agricultural journal, 2.
Seshadri, B., & Baja, S. (2020). Inventory Visibility across Channels Aspire Systems - Inventory Visibility across Channels. Technical Article. Retrieved from https://www.aspiresys.com/articles/inventory-visibility-across-channels.pdf
Sheel, A., & Nath, V. (2019). Effect of blockchain technology adoption on supply chain adaptability, agility, alignment and performance. Management Research Review.
Singha, D., & Verma, A. (2018). Inventory Management in Supply Chain. 7th International Conference of Materials Processing and Characterization, Materials Today Proceedings. 5 (2018) 3867–3872
Skipworth, H., & Julien, D. (2015). Supply chain alignment for improved business performance: an empirical study. Supply Chain Management: An International Journal, 20(5), 511-533.
Tenorio, O. M. L., Pascucci, S., Verkerk, R., Dekker, M., & van Boekel, T. A. (2021). What does it take to go global? The role of quality alignment and complexity in designing international food supply chains. Supply Chain Management: An International Journal, 26(4), 467-480.
Tinkham, W. T., Mahoney, P. R., Hudak, A. T., Domke, G. M., Falkowski, M. J., Woodall, C. W., & Smith, A. M. (2018). Applications of the United States Forest Inventory and Analysis dataset: A review and future directions. Canadian Journal of Forest Research, 48(11), 1251-1268.
Wever, M., Wognum, N., Trienekens, J., & Omta, O. (2010). Alignment between chain quality management and chain governance in EU pork supply chains: A Transaction-Cost-Economics perspective. Meat science, 84(2), 228-237.
World Bank. (2013). “Reducing Supply Chain Barriers Could Increase Global GDP Up To 6 Times More Than Removing All Import Tariffs Report”, Switzerland