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INVENTORY+MANAGEMENT+STRATEGY
INVENTORY+MANAGEMENT+STRATEGY
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
44
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
45
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
The efficient operation of manufacturing and better manage their resources in order to
retailing enterprises depends on their perform well on the important performance
inventories. They might include unfinished metrics relied upon by both internal and external
items, work-in-progress, consumables and spare assessors. Studies have shown that a
components, as well as raw materials. All of these manufacturing organization may be
inventory classifications are not necessary for a undermining its viability and profitability if it
company. Whatever the inventory goods, they all displays an ambivalent attitude about inventory
require effective management because a large management. According to Shenoy and Zabelle
portion of the company's money are usually (2016), the low profitability index, high cost of
invested in them. Within the same organization, maintaining an expected level of inventories, and
many departments apply various approaches to frequent revelations about the closure of
inventory. This is mostly due to the fact that a manufacturing companies in Nigeria are all
department's motivation is influenced by the contributing factors. As a result, the study on the
specific job it performs (Anichebe, 2013). inventory management strategy and
Restocking, lead times, carrying costs of performance of Nigerian brewery companies in
inventory, asset management, inventory South East, Nigeria.
forecasting, inventory valuation, inventory 1.2 Statement of the Problem
visibility, future inventory, price forecasting, The reality is that effective inventory
physical inventory, available physical space, management produces the continuity and repeat
quality management, replenishment, returns business that every firm seeks. Always strive to
and defective goods, and demand forecasting are raise your service quality to the point where you
all factors that need to be balanced. Optimal can respond to consumer demands quickly if you
inventory levels are achieved by juggling these want your hard-earned customers to return to
conflicting demands, which is a continuous buy your goods and services. By enabling you to
process as company needs change and respond deliver the appropriate amounts of hands-on
to the external environment (Shenoy & Zabelle, service when your customers request them with
2016). the acceptable lead time, inventory management
At all organizational levels and throughout all job and control assist businesses in fulfilling such
functions, managers make decisions that they demand, underscoring the significance of
believe will result in high levels of performance inventory management. Your firm will succeed
using their available resources, including people, or fail based on how well you manage your
information, equipment, and so on. Long-term inventory. Delivering goods to consumers on
as well as short-term organizational performance schedule is essential to business survival.
goals must be met, managers search for ways to Additionally, keeping track of your inventory and
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
46
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
47
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
availability in brewery companies in South East, action of counting or listing objects is referred to
Nigeria. as taking an inventory. All stock in the different
iii. Safety stock strategy has significant phases of manufacturing is referred to as
relationship with the customer retention in inventory, a current asset in accounting terms.
brewery companies in South East, Nigeria. Retailers and manufacturers can continue to sell
1.6 Significance of the Study or produce goods by maintaining stock. For most
The findings of the study would enable the firms businesses, inventory is a significant asset on the
and other manufacturing firms in Nigeria to balance sheet, but having too much may turn it
enhance their competitiveness and performance. into a burden (Abby, 2021).
Furthermore, the data so generated from the 2.1.2 Management
study would serve as a base and framework for Different meanings have been attributed to the
future researchers to expand the field of word "management." It can be used to define the
knowledge under study. function of managing people or the process of
REVIEW OF THE RELATED planning, organizing, staffing, directing,
LITERATURE coordinating, and regulating. It is also known as
2.1 Conceptual Review a body of information, method, or discipline.
2.1.1 Inventory Others have examined management as an
Both the raw materials used in production and economic resource, a component of production,
the finished commodities that are offered for sale or an authoritative structure. Some characterize
are included in the definition of inventory. One management as a style of leadership and
of a company's most valuable assets is its decision-making (Venkatesh, 2020). Every firm
inventory since it is one of the main sources of in America today depends on management
revenue creation and, consequently, a source of succession to be viable in the future. Up to $10
profits for the company's shareholders. There are trillion in wealth is predicted to pass from one
three different categories of inventory: generation to the next by 2027. A large portion of
completed commodities, work-in-progress, and the wealth transfer will take place through the
raw materials. It appears on a company's balance transfer of ownership and active management of
sheet as a current asset (Kenton, 2021). The 4.5 million enterprises. The strategy or process
accounting of goods, components, and raw for identifying and developing new internal
materials that a business either sells or utilizes in leaders to take over from current leaders who will
manufacturing is known as inventory. Inventory be stepping down from their present
management is a skill you develop as a business responsibilities due to retirement, disability,
owner to make sure you have adequate inventory termination, or death is known as management
on hand and to see when there is a shortfall. The succession (Maxim, 2022).
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
48
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
49
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
A common supply planning tool called material Using a just-in-time (JIT) inventory system,
requirements planning (MRP) aids companies, suppliers may place orders for raw materials that
mainly producers of goods, in understanding are directly in line with production schedules. By
their inventory needs and balancing supply and only ordering the things they really need for the
demand. To efficiently manage inventory, production process, businesses may cut down on
schedule production, and deliver the right inventory expenses while increasing efficiency
product on time and at the best price, businesses and reducing waste. With this strategy,
use MRP systems, which are subsets of supply producers must precisely predict demand
chain management systems (Jenkins, 2022). (Banton, 2022). A management concept known
MRP schedules production in accordance with as "Just In Time" deals with production
bills of materials while minimizing inventory. procedures and expectations for management's
The method is automated and examines criteria roles, responsibilities, and support of employees,
within a predetermined time frame. It is line workers, and suppliers, as well as
commonly acknowledged that the MRP system management's interactions with consumers and
was essential in reducing industrial inventories. general corporate behaviour (Nnadi, Orga and
It also aids in the production of increasingly Ugwu, 2021). Just-in-time (JIT) production and
complicated industrial goods. The MRP focuses inventory have been hot topics in the world of
on the types of materials needed and the timing supply chains for a while, and many companies
of their sourcing. Additionally, it helps with have embraced this strategy. Many organizations
product personalization. MRP is recognized to have embraced this method to increase their
arrange and track every order, whether for bottom line due to increased competition and
manufacturing or purchasing, and has pressure to increase profitability, but it may be
historically been considered as providing extra troublesome when supply chains come to a
advantages (CIPS, 2022). A computerized screeching halt (Abby, 2020).
method known as material requirements 2.1.5.3 Safety stock strategy
planning, or MRP, enables manufacturers to A safety stock is a surplus of a product that is kept
more effectively plan, manage, and control their in the warehouse to avoid running out of stock. It
inventory. Consequently, it assists companies in acts as protection against shifts in demand. As a
planning manufacturing according to bills of safeguard against unforeseen events, safety
materials and delivering the correct product at stock. To prevent losing sales as a result of stock
the right time and for the greatest price shortages or supply chain disruptions, it is
(Wallstreetmojo, 2022) essential to calculate safety stock appropriately.
2.1.5.2 Just-in-time inventory Choose the strategy that works the best for your
strategy company since, like many other business
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
50
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
decisions, there is no one-size-fits-all formula which accounts for the many criticisms of the
that will work for all firms (Kesaven, 2022). idea and the metrics used to measure it. Thus,
Simply put, safety stock is inventory kept on concepts like productivity, efficiency,
hand to avoid stock shortages. Stock outs are effectiveness, economy, earning potential,
caused by variables such shifting consumer profitability, competitiveness, etc. are confused
demand, inaccurate forecasts, and erratic lead with organizational performance. For this
times for production or raw materials. When reason, a clear and unambiguous definition of
determining safety stock levels, some operations the idea of performance is being pushed for more
managers rely on intuition or hunches, while and more (Ion and Criveanu, 2016).
others base their decisions, for instance, on a 2.1.7 Components of Performance used
cycle stock level percentage of 10 or 20 percent. 2.1.7.1 Reliability of products
Although simple to use, these methods typically The likelihood that a product or piece of
produce subpar results. A good, quantitative equipment will function effectively over a
approach to safety stock will balance the specific period of time while being used normally
competing objectives of maximizing customer is known as reliability. Reliability and quality are
service and decreasing inventory expense, in therefore connected, but reliability is more than
addition to providing company executives with that. Reliability is connected to the continuance
justification for the necessary inventory levels of performance over time, whereas quality is
(King, 2011). focused on the initial performance of a product
2.1.6 Performance or service. (2018) (Minakshi). The quality of
Although the components of an effective products is quickly emerging as a crucial
performance-management system are competitive concern. The higher dependability of
straightforward, it can be challenging to several Nigerian products has caused other
incorporate them into a company's core country managers to reflect deeply. Additionally,
operational procedures. Businesses need a number of polls have revealed customers'
effective performance management. They are unhappiness with the present quality and service
able to integrate their systems, resources, and standards of the goods they purchase (Garvin,
personnel with their strategic goals through both 2018). Making a product faultless and practical
formal and informal approaches. It serves as a means it will satisfy all customer demands and
dashboard as well, giving management advance expectations. Additionally, if a problem arises
notice of possible issues and letting them know with the use of that product in the future, it will
when changes are needed to keep a firm on be fixed for the better and made even better.
course (Raffaele, John, and Frédéric, 2017). 2.1.7.2 Availability of Stock
Performance is a subjective impression of reality,
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
51
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
Political, economic, technical, and social remain with the firm rather than go to a rival
variables all contribute to the ongoing evolution (Satmetrix and Reichheld, 2022). The
of the world market. Many small- and mid-sized procedures and programs that companies do to
businesses (SMBs) are struggling with inventory foster client loyalty and increase customer
management issues as they attempt to stay lifetime value are known as customer retention
competitive. Building and maintaining excellent strategies. Client retention differs from lead
connections with your suppliers is essential generation or customer acquisition. It focuses on
today more than ever because everyone is vying clients who have already used your services or
for the stock, even your rivals. assist your bought anything from you. However, keeping
suppliers in assisting you. The more details you clients involves more than just business; it
can provide about your upcoming order needs, involves building connections. According to
the better. The risks associated with supply may research, consumers consider their ties with
then be discussed on a regular basis in an honest companies in a manner similar to how they view
and transparent manner (Drakeley, 2021). their relationships with friends. Customers like
2.1.7.3 Customer retention brands that are trustworthy, genuine, and
The capacity of a business to keep customers conscious of their needs. Enhancing the
coming back over time is known as customer customer experience will increase customer
retention. Retaining a customer's business shows retention (Olson, 2022).
that a brand, product, or service is appealing to 2.1.8 Conceptual Framework
the existing client to the point that they choose to
DEPENDENT VARIABLES INDEPENDENT VARIABLES
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
52
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
Womack et al. invented the lean production inventory and related carrying expenses. The
paradigm (1990). Reduced inventories were process must have indications of what is
associated with this idea. According to the happening everywhere for JIT to be achieved.
reasoning, if inventory is decreased, profits will The quality, efficiency, and return on investment
increase because interest costs will be saved, as of a manufacturing organization can all
well as because there will be less waste, handling, dramatically increase as a result of JIT. It focuses
and storage expenses. The literature has on the idea that manufacturing should result in
estimated these savings to be between 20 and 30 products that arrive at the proper time, neither
percent (Brigham & Gapenski, 1993). In today's earlier nor later.
extremely competitive climate, lean The foundation of this method is the
management is receiving more and more understanding that the demand for one
attention. Excess inventory, according to the inventory item may be influenced by the desire
advocates of the lean inventory system, will for other inventory items. The finished product,
negatively impact a company's net cash flows. into which related components are combined, is
The costs of keeping inventory, which include the main focus. Future demand is used to
capital expenses (interest or opportunity) and determine the inventory requirements. The
the physical cost, are the most visible from a cost master manufacturing schedule for the finished
perspective (storage, insurance and spoilage). A goods perfectly predicts the demand for
number of solutions have been created in the inventory items. Inventory levels are kept at
field of operations management recently to relatively low levels when a lean inventory
address the issues with excess inventories. Just- system, like JIT and MRP, is in operation. Costs
In-Time (JIT), Materials Requirements Planning associated with material handling and
(MRP), and Enterprise Resource Planning (ERP) warehousing are drastically decreased. As a
are examples of management-oriented systems. result of lower conversion costs, this raises the
The term "Just-In-Time" describes a group of return on assets. Items are not manufactured in
waste-reduction techniques. The whole supply a just-in-time inventory system until customers
chain is covered by these organizational-wide require them. This system has less overhead and
practices. minimal storage needs, among other advantages.
Reduced machine setup times, single sourcing of When perishables are involved, there is also less
close suppliers, complete preventative waste. A just-in-time inventory system is used by
maintenance, and shared product design with companies that produce highly expensive goods
customers and suppliers are all components of like airplanes, but it is also used by companies
JIT. It is an inventory strategy used to increase a that produce goods at the opposite end of the
company's return on investment by lowering price range, like wedding cakes or bespoke flower
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
53
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
arrangements. Such a mechanism is also used by were questionnaires and interviews. 15 of the 285
on-demand publishing businesses, who only copies of the questionnaire that were distributed
produce books when an order is placed. were not returned, leaving 270 copies. The
2.2.2 Heijunka Theory study's research design was a descriptive survey.
Toyota has put the principle of leveled inventory Statistical techniques such as the Pearson
and production, or Heijunka, into action. It seeks product moment correlation coefficient and
to ensure even production cycles, which means it straightforward linear regression were used to
minimizes overtime and unproductive assess the assumptions. According to the
production time. Based on exact estimations of findings, inventory control has a substantial
client requests, Toyota modifies its impact on the productivity of a subset of
manufacturing of various car models and parts manufacturing enterprises (r = 0.849; t = 27.726;
on a weekly and daily basis. Heijunka can help F= 768.754; p 0.05). Demand management and
small businesses with seasonal sales cycles by customer satisfaction at particular
producing a set amount of items each week of the manufacturing enterprises are positively
year rather than scrambling to fulfil requests correlated (r =.799, P .05. The development of
during the peak season. the chosen manufacturing enterprises is
2.3 Empirical Review significantly impacted by just-in-time (r =.885; t
2.3.1 Relationship between Materials = 32.865; F= 1080.094; p 0.05). Inventory
Requirement Planning (MRP) and management is crucial to the running of any
Reliability of Products firm, the survey found. Since many businesses
Effect of Inventory Management on the are employing the strategy of lowering their
Organizational Performance of the Selected investment in fixed assets, inventory as an asset
Manufacturing Firms, Okoro, Obi-Anike, and on the balance sheets of businesses has gained in
Eke (2016). The study set out to assess the nature significance.
of the link between demand management and The Empirical Review of Inventory Management
customer satisfaction of chosen manufacturing and Control System at International Breweries
businesses, the amount to which inventory Plc was the subject of research done by Adebola
control influences productivity of those in 2019. Using a survey research approach, this
organizations, and the impact of just-in-time on study assessed International Breweries Plc's
the expansion of those firms. Taro Yemeni's inventory management and control system. The
method was used to calculate a sample size of analysis emphasized the company's inventory
285 from a population of 996, with a tolerance management and control system's suitability and
for error of 5% and a 95% degree of confidence. efficacy. Through the use of an administered
The main instruments utilized to gather the data questionnaire, primary data were gathered.
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
54
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
Since all replies were positive, the study's business during the research period. The price of
findings indicated that the corporation had a the software was also highlighted as a big
sufficient, effective, efficient, and well managed business difficulty, and it was determined that
inventory management and control system. The the problems were significantly affecting how
investigation concluded that International satisfied consumers were with the Nigerian
Breweries Plc effective's inventory management brewery sector's companies.
and sufficient accounting procedures for Effective Inventory Management Practice and
recording inventories play a vital role in assuring Firms Performance: Evidence from Nigerian
a decrease in the ordering and carrying costs of Consumable Goods Firms was examined by
inventory. The company's inventory value Ajayi, Obafemi, and Araoye in 2021. For a ten
method was assessed for suitability. (10) year period, from 2009 to 2019, this study
The Effect of the Challenges Facing the Use of aims to determine the association between
Information and Communications Technology efficient inventory management practices and
on Inventory Management Among Breweries in the business performance of a sample of
Nigeria was the subject of a research by Odesola consumer products firms listed on the Nigerian
and Akinola (2020). In recent years, information stock exchange. Inventory procurement costs,
and communications technology (ICT) has inventory consumption, and stock value were
developed into a realistic strategic policy choice utilized as a criterion for assessing effective
that many firms have chosen to help them inventory management practices, while return
compete advantageously in a market that is on capital employed, firm growth, and return on
driven by ICT and is both competitive and investment served as surrogates for firm
dynamic. The advantages accruable from ICT performance. From 2009 to 2019, this study
deployment for company operations, employed panel data that was gathered from
particularly in inventory management, have documents on the Nigerian stock exchange, fact
always been lowered, which is preventing books, annual reports, and financial statements
corporate organizations from making this of the listed beer companies. The STATA 13
strategic step. The approach of the study was statistical tool was used to analyze the data using
established from primary data. Data collected by correlation coefficients and the ordinary least
administering a structured questionnaire were square (OLS) regression approach. The results
analyzed using descriptive and inferential showed a positive and non-significant
statistics. Throughout the field survey, it was relationship between return on investment and
determined that issues with ICT use had a effective inventory management practice, but a
detrimental influence on the efficiency of significant positive relationship between return
inventory management in the Nigerian brewery on capital employed, firm growth, and effective
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
55
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
inventory management practice at a 5 percent the Nigerian stock exchange. In this study, the
significant level. link between inventory control and the financial
2.3.2 Relationship between just-in-time success of breweries listed on the Nigerian stock
inventory strategy and stock availability. market during a seven-year period (2010–2016)
A research on Inventory Management and will be determined. The inventory conversion
Financial Performance: Evidence from Brewery duration was employed as a metric to measure
Firms Listed on the Nigerian Stock Exchange inventory management, and return on asset, firm
was done by Amahalu, Ezechukwu, Egolum, and growth, and return on equity served as
Obi (2018). In this study, the link between surrogates for financial success. The study
inventory control and the financial success of employed panel data that came from accounts
breweries listed on the Nigerian stock market and annual reports of the listed brewing
during a seven-year period (2010–2016) will be companies between 2010 and 2016, publications
determined. The inventory conversion duration on the Nigerian stock exchange, and fact books.
was employed as a metric to measure inventory The STATA 13 statistical tool was used to analyze
management, and return on asset, firm growth, the data using correlation coefficients and the
and return on equity served as surrogates for ordinary least square (OLS) regression
financial success. From 2010 to 2016, this study approach. The results showed a positive and
employed panel data that was gathered from non-significant association between return on
documents on the Nigerian stock exchange, fact equity and inventory conversion period, but a
books, annual reports, and financial statements substantial positive relationship between return
of the listed beer enterprises. The STATA 13 on assets, firm growth, and inventory conversion
statistical tool was used to analyze the data using period at a 5 percent significant level.
correlation coefficients and the ordinary least The impact of inventory management practices
square (OLS) regression approach. The results on the operational performance of flour milling
showed a positive and non-significant companies in Nigeria was the subject of research
association between return on equity and by Akinlabi in 2021. This research looked at how
inventory conversion period, but a substantial the operational performance of a few Nigerian
positive relationship between return on assets, flour mill enterprises was affected by inventory
firm growth, and inventory conversion period at management techniques. The research design for
a 5 percent significant level. the study was a cross-sectional survey. The
Researchers Ndubuisi, Ezechukwu, Egolum, and selected flour mills' 2,237 employees made up
Obi (2018) looked at the relationship between the target population. A sample size of 776
inventory management and financial people was chosen using a stratified random
performance using data from breweries listed on selection procedure. To gather data for the study,
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
56
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
a structured self-administered survey 2020. Similar to the majority of nations that use
questionnaire was modified, validated, and used. alcohol, Nigeria is engulfed in a violent beer war
The constructions' Cronbach's alpha coefficients that has seen rival breweries endure
varied from 0.783 to 0.971. The administered 776 deteriorating bottom lines in return for greater
copies of the questionnaire had an 82.6 percent market share. Three significant breweries are
response rate. Descriptive and inferential now engaged in competition in Nigeria:
statistics, such as Pearson Product Moment International Breweries, Guinness Nigeria, and
Correlation and Regression Analysis, were used Nigeria Breweries. In order to survive and
to examine the data. Results showed a favorable outsmart rivals, companies in the breweries
and substantial relationship between the sector have to look for production tactics and
automated inventory system and operational cost control methods. Competitive parity is the
performance (B = 0.806, p-value 0.05). The term used to describe these objectives, plans, and
relationship between inventory shrinkage and methods. In light of this, the research assesses
operational performance was shown to be Nigeria Breweries Plc's marketing effectiveness
adverse and substantial (B = -9512539.85, p- and competitive parity in Nigeria under fierce
value 0.05 level of significance). (B = 0.220, p- rivalry from other powerful beer companies. The
value 0.05) It was discovered that inventory high promotion war between enterprises in the
investment was positively and substantially sector, which has been marked by fierce
connected to operational performance. (B = competition, and the accompanying inclination
329.426, p-value 0.05) It was discovered that of rivals serve as the basis for the paper's
inventory record accuracy was positively and rationale. The struggle for brand excellence is
substantially connected to operational highlighted as the driving force behind industry
performance. The relationship between rivalry, which shifts the focus to the place and
inventory turnover and operational performance promotion components of the marketing mix. To
was shown to be both positive and significant (B determine strategic and tactical imperatives for
= 0.707, p-value 0.05). The study concluded that the survival of enterprises in the industry, the
the operational efficiency of Nigerian flour mill study drew on an existing literature review. In
enterprises was considerably impacted by order for competitive intelligence to maintain a
inventory management techniques. realistic and significant existence in the fiercely
2.3.3 Relationship Between Safety stock competitive world of breweries in Nigeria, it was
strategy and customer retention argued that defensive measures and PEST
A research on the Competitive Parity and analysis were essential.
Marketing Performance of Nigeria Breweries Plc The role of outsourcing supply chain
was undertaken by Nwaohiri and Onuoha in management was examined by Nwankwo (2020)
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
57
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
in a study of Nigerian Breweries PLC. In order to Nigeria as well as the impact of material control
concentrate attention on their primary business on these two factors. Review of pertinent
activities, business organizations throughout the conceptual, theoretical, and empirical literature.
world outsource all or part of their non-essential The Inventory Management Theory served as the
operational components to service providers. It study's foundation. The chosen study design was
has gained popularity, especially in a cutthroat a descriptive survey. In South-East Nigeria, the
corporate climate. In this essay, the function of study was conducted. The sample size of 328 was
outsourcing supply chain management is calculated using the population sample size
discussed, with a special emphasis on Nigerian formula. A questionnaire served as the study's
Breweries PLC. The study is theoretically based main tool. To ensure the instrument's reliability,
on Network Theory. The study followed a face and content validity as well as the test-retest
methodological approach that combined and Cronbach Alpha methods were used. To
descriptive and historical research design address the research issues, simple percentage
techniques. Secondary sources were used to analysis was utilized, and multiple regression
acquire the data, which were then qualitatively analysis was used to evaluate the hypotheses.
analyzed. One of the study's conclusions is that The exam was conducted using SPSS version 21
the supply chain in Nigerian breweries begins in (Statistical Package for Social Sciences). The
agriculture, which is where the raw ingredients South-East Nigerian brewery industries'
are sourced, and continues via malting, brewing, productivity was found to be significantly
bottling, distribution to their clients, and positively impacted by material control. In
ultimately, consumer consumption. According to Nigeria's South-East, the material planning
the study's findings, outsourcing is successful technique has a favorable, considerable impact
when it is well-planned and executed, regardless on organizational productivity. According to the
of the motivation. study's findings, material management has a
A research on the material management and favorable, considerable impact on organizational
organizational productivity of the breweries productivity in the South-East region of Nigeria.
industry in the south-east of Nigeria was done by METHODOLOGY
Egwuatu (2021). The South-East Nigerian 3.1 Research Design
breweries sector was the subject of this study's The study employed a survey research design
investigation of the impact of organizational since it involved the examination of the
productivity and material management. The phenomenon without any attempt to manipulate
study intends to investigate the link between the study variables and is characterized by the
material planning strategy and organizational selection of random samples from the population
productivity of the brewery sector South-East in to obtain empirical knowledge of contemporary
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nature. The design was used in the To gather the vital information, the following
determination of the extent of the relationship sources were employed by the study; textbooks,
between these variables organizational structure journals and some materials were also obtained
and growth of brewing firms as independent and from the internet.
dependent variables respectively. 3.3. Area of the Study
3.2. Sources of Data The area of the study was the South-East Nigeria
In the course of conducting the research, two which housed the brewery firms in the study.
types of data were collected. The nature of each These included Nigeria Breweries Plc Aba, Ama
of these types is briefly described below; Brewing Enugu and SABmiller Plc Onitsha.
3.2.1. Sources of Primary Data 3.4. Population of the Study
These were original data that were collected The population of the study was made up of
basically for the problem under investigation. It senior, middle and junior employees of three
contained data originally assembled. brewing companies in South-East Nigeria which
3.2.2. Sources of Secondary Data gave a total of two thousand and thirty-five
employees (2035) as shown below;
Table 3.1 Population Distribution
Staff Categories
Snr Middle Junior Total
1 Nigeria Breweries Plc Aba 56 352 492 900
2 Ama Breweries Enugu 47 370 433 142
3 SABmiller Plc Onitsha 68 75 850 285
Total 171 797 1067 2035
Source: Administrative office, 2022 The study adopted a simple random sampling
Table 3.1 shows that three companies were technique in selecting the sample unit and the
selected from three states out of the five states in sample size for the study was 334 employees out
the Southeast which the study deemed to be of a total population of 2035 employees of the
representative of the Nigerian brewery. This was three selected brewing companies in South-East
because there were no serious activities on the Nigeria. This proportion simple random
site of the other firms during a repeated visit by sampling technique is considered adequate for
the researcher. the study because the management and staff in
3.5. Sample Size Determination the various Brewery companies used for the
study did not have equal population and that was
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derived with the use of Taro Yamanes' formula proportion of questionnaires to be administered
for the finite population as shown below: to each Brewery firm.
N Nh(n)
n= Nhi =
1 + N[e] 2 N
Where: Where n1 = number of questionnaire allocated
n = Sample Size, N = the finite population , e = to each brewery firms
Level of significance [0.05] n = total sample size
1 = a constant Nh = number of employees in each firm
Substituting N = population size
2035 So many sampling techniques was used (since it
1+ 2035[0.05]2 provided an estimate for each stratum) i.e
n = 334 number of questionnaire allocated to each firm:
Thus, the sample size will be 334 employees of 146, 136, and 52 copies of the questionnaire were
the selected three brewery firms in South-East allocated to the six departments each in the
Nigeria. However, Bowley's proportional selected firms respectively.
allocation formula was used in determining the
Table 3.2: Proportionate Allocation of Questionnaire
Thus:
Nigeria Breweries Plc, Aba = 900 x334 = 148
2035
The proportion of management staff to be = 56 x334 = 9
sampled 2035
The proportion of senior staff to be sampled 352 x334 = 58
2035
The proportion of Junior staff to be sampled = 492 x334 = 81
2035
Ama Brewing, Enugu = 850 x334 = 140
2035
The proportion of management staff to be 47 x334 = 8
sampled 2035
The proportion of senior staff to be sampled = 370 x334 = 61
2035
The proportion of Junior staff to be sampled = 433 x334 = 71
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2035
SABmiller Plc, Onitsha = 285 x334 = 47
2035
The proportion of management staff to be 68 x334 = 11
sampled 2035
The proportion of senior staff to be sampled = 75 x334 = 13
2035
The proportion of Junior staff to be sampled = 142 x334 = 23
2035
Total = 334
Source: Field Survey, 2022
3.6 Instrument for Data Collection contents coverage, relevance and effectiveness in
The main instrument for data collection was a measuring the variables under study. Finally,
structured questionnaire. Copies of the some of the items were modified, discarded and
questionnaire were administered to the staff newly introduced. Thus, an instrument with
which were distributed to staff and management better items emerged which the researcher used
of the organizations studied. Fifteen (15) to collect the much-needed data for the study.
designed questionnaire was used. The responses 3.8. Reliability of the Instrument
generated were used thereafter for data analyses. The researcher administered copies of the
The responses from the participants were instrument to employees of Awo ommama
measured using a 5-point Likert scale as follows: brewing Owerri after a time –frame of 14 days,
Strongly Agree [SA] –5 points, Agree A – 4 the instrument was re-administered to the same
points, Undecided UN – 3 Points, Disagree [D] – respondents and collected. To ascertain the
2 points and strongly Disagree SD – 1 point. internal consistency of the instrument, the
3.7. Validity of the Instrument Cronbach Alpha method was used to compute
The face and content validity of the instrument the internal consistency reliability estimate of
were used by giving out copies of the the items. The instrument had an overall
questionnaire to my supervisor and some experts reliability Cronbach Alpha co-efficient of 0.84
in research in the Department of Business which indicated that the instrument was reliable
Administration, and they reviewed the content and, therefore, considered appropriate for use.
items of the questionnaire for clarity of words,
Table 3.3a Cronbach Alpha Reliability Test
N %
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representing 72.0 percent agreed with a mean score of 3.72 and 1.285. Custom made shopping
score of 3.67 and standard deviation of 1.058. lists are facilitated through materials
MRP schedule and track every order whether for requirement planning (MRP). 224 respondents
production or purchase. 180 respondents representing 77.8 percent agreed with a mean
representing 62.5 percent agreed with a mean score of 3.93 and a standard deviation of 1.136.
4.3 Relationship between Just-in-Time Inventory Strategy and Stock Availability in
Brewery Companies in South East, Nigeria.
Table 4.3.1: Responses to research question two on the Relationship between Just-in-
Time Inventory Strategy and Stock Availability in Brewery Companies in South
East, Nigeria.
5 4 3 2 1 ∑FX - SD Decisi
SA A N DA SD X on
1 The overproduction in 42 464 168 24 20 1096 3.81 1.115 Agree
the breweries is reduced 0 116 56 12 20 288
with just-in-time. 84 40. 19.4 4.2 6.9 100%
29. 3
2
2 Inventory is minimized 22 720 72 40 20 1072 3.72 1.032 Agree
and efficiency is 0 180 24 20 20 288
increased through a just- 44 62. 8.3 6.9 6.9 100%
in-time strategy. 15. 5
3
3 The elimination of raw 40 44 168 40 20 1076 3.74 1.145 Agree
material, inventory and 0 8 56 20 20 288
product storage costs are 80 112 19.4 6.9 6.9 100%
ensured. 27. 38.
8 9
4 Wastage is reduced in the 540 416 60 72 20 1108 3.85 1.246 Agree
industries and efficiency 108 104 20 36 20 288
is improved with 37. 36. 6.9 12. 6.9 100%
productivity. 5 1 5
5 The minimization of 22 60 72 20 1028 3.57 1.105 Agree
wasting time and 0 8 108 36 20 288
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5 4 3 2 1 ∑FX - SD Decisi
SA A N DA SD X on
1 Extra quantity of a 60 368 60 72 20 1120 3.8 1.267 Agree
product which is stored in 0 92 20 36 20 288 9
the warehouse prevents 120 31. 6.9 12. 6.9 100%
an out-of-stock situation 4.7 9 5
2 Safety stock serves as an 760 160 120 72 20 1132 3.93 1.339 Agree
insurance against 152 40 40 36 20 288
fluctuations in demand 52. 13. 13.9 12. 6.9 100%
8 9 5
3 Safety stock serve as 24 672 48 72 20 1052 3.65 1.109 Agree
balance during 0 168 16 36 20 288
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Standardize
Unstandardized d
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 2.92
.037 .013 .004
9
TEIO 62.0
.337 .005 .397 .000
33
ICUY 29.2
.208 .007 .201 .000
75
IUJH 34.0
.181 .005 .212 .000
82
IBCT 42.4
.246 .006 .255 .000
18
TFBA 4.42
.028 .006 .029 .000
4
Dependent Variable: WWWW
Where: TFBA = Custom-made shopping lists are
WWWW = Materials Requirement planning facilitated through materials requirement
(MRP) relationship with the Reliability of planning (MRP).
products in brewery companies in South East, β1 = β2 =β3 =β4 = β5 This coefficient is
Nigeria representing the above response in the model
TEIO = MRP ensures that materials, The student’s t-test:
quantities and inventories, of the breweries will The test is carried out, to check for the individual
not run out of materials again significance of the variables. Statistically, the t-
ICUY = Effective planning is achieved with statistics of the variables under consideration is
comprehensive lists of what is needed. interpreted based on the following statement of
IUJH, = Better costing with the bill of materials hypothesis.
and it ensures to cost up robs and orders more H0: The individual parameters are not
effectively. significant.
IBCT, = MRP schedule and track every order H 1: The individual parameters are significant.
whether for production or purchase Decision Rule:
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The t-statistics is used to test for individual effectively; MRP schedule and track every order
significance of the responses given. From the whether for production or purchase and Custom-
table above, we can infer that the following made shopping lists are facilitated through a bill
responses were true and statistically significant; of materials (MRP). Therefore, the study
that MRP ensures that materials, quantities and concluded that Materials Requirement planning
inventories, of the breweries will not run out of (MRP) had significant positive relationship with
materials again; Effective planning is achieved the Reliability of products in brewery companies
with comprehensive lists of what is needed; in South East, Nigeria, (t = 2.929 < 42.418,
Better costing with the bill of materials and it p<.05).
ensures to cost up robs and orders more
4.5.2 Hypothesis Two: Just-in-time inventory strategy has no positive significant
relationship with the stock availability in brewery companies in South East,
Nigeria.
Coefficientsa
Standardize
Unstandardized d
Coefficients Coefficients
Model B Std. Error Beta t Sig.
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The t-statistics is used to test for individual ensured; Wastage is reduced in the industries
significance of the responses given. From the and efficiency is improved with productivity and
table above, we can infer that the following The minimization of wasting time and transport
responses were true and statistically significant; costs are observed leading to saving resources.
that the overproduction in the breweries is Therefore, the study concluded that Just-in-time
reduced with just-in-time,; Inventory is inventory strategy had significant positive
minimized and efficiency is increased through a relationship with the stock availability in
just-in-time strategy; The elimination of raw brewery companies in South East, Nigeria, (t =
material, inventory and product storage costs are 2.439 < 24.152, p <.05).
4.5.3 Hypothesis Three: Safety stock strategy has no positive significant relationship
with the customer retention in brewery companies in South East, Nigeria.
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1(Constant) .062 .019 3.350 .001
TEIO -.166 .015 -.164 -11.308 .000
ICUY .160 .010 .180 16.650 .000
IUJH .404 .010 .482 41.367 .000
IBCT .350 .013 .346 27.503 .000
TFBA .240 .008 .249 30.693 .000
a. Dependent Variable: IKJHH
Where: TEIO = Extra quantity of a product which is
IKJHH = Safety stock strategy relationship stored in the warehouse prevents an out-of-
with the customer retention in brewery stock situation
companies in South East, Nigeria ICUY = Safety stock serves as an insurance
against fluctuations in demand
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IUJH, = Safety stock serve as balance during H0: The individual parameters are not
conflicting goals of maximizing customer service significant.
IBCT, = Safety stock acts as a defense against H 1: The individual parameters are significant.
unexpected circumstances Decision Rule:
TFBA = Minimizing inventory cost is done If t-calculated > t-tabulated, we reject the null
with safety stocks hypothesis {H0} and accept the alternative
β1 = β2 =β3 =β4 = β5 These coefficient is hypothesis {H1}, and if otherwise, we select the
representing the above response in the model null hypothesis {H0} and reject the alternative
The student’s t-test: hypothesis {H1}.
The test is carried out, to check for the individual Level of significance = α at 5% =
0.05
= 0.025
2
significance of the variables. Statistically, the t-
Degree of freedom: n-k
statistics of the variables under consideration is
Where n: sample size.
interpreted based on the following statement of
K: Number of parameter.
hypothesis.
288-5 = 283 = 1.980
The t-test is summarized in the table below:
Table 4.3.4: The calculated value for t-test:
Variables t-cal t-tab Remark
(Constant) 3.350 ±1.980 Significant
TEIO -11.308 ±1.980 Significant
ICUY 16.650 ±1.980 Significant
IUJH 41.367 ±1.980 Significant
IBCT 27.503 ±1.980 Significant
The t-statistics is used to test for individual as a defense against unexpected circumstances
significance of the responses given. From the and minimizing inventory cost is done with
table above, we can infer that the following safety stocks. Therefore, the study concluded
responses were true and statistically significant; that Safety stock strategy significant positive
that Extra quantity of a product which is stored relationship with the customer retention in
in the warehouse prevents an out-of-stock brewery companies in South East, Nigeria, (t =
situation; Safety stock serves as an insurance 3.350 < 41.367, p <.05).
against fluctuations in demand; Safety stock 4.6 Discussion of Findings
serve as balance during conflicting goals of 4.6.1 The relationship between materials
maximizing customer service; Safety stock acts Requirement planning (MPR) and
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exchange. The results showed a positive and non- positive significant link with the customer
significant association between return on equity retention in brewery enterprises in South East,
and inventory conversion period, but a Nigeria. Nwaohiri and Onuoha (2020) did a
substantial positive relationship between return research on the Competitive Parity and
on assets, firm growth, and inventory conversion Marketing Performance of Nigeria Breweries Plc
period at a 5 percent significant level. The impact to justify the findings. The struggle for brand
of inventory management practices on the excellence is highlighted as the driving force
operational performance of flour milling behind industry rivalry, which shifts the focus to
companies in Nigeria was the subject of a the place and promotion components of the
research by Akinlabi in 2021. Findings showed A marketing mix. To determine strategic and
favorable and substantial relationship between tactical imperatives for the survival of
the automated inventory system and operational enterprises in the industry, the study drew on an
performance was discovered (B = 0.806, p-value existing literature review. In order for
0.05). The relationship between inventory competitive intelligence to maintain a realistic
shrinkage and operational performance was and significant existence in the fiercely
shown to be adverse and substantial (B = - competitive world of breweries in Nigeria, it was
9512539.85, p-value 0.05 level of significance). argued that defensive measures and PEST
(B = 0.220, p-value 0.05) It was discovered that analysis were essential. The role of outsourcing
inventory investment was positively and supply chain management was examined by
substantially connected to operational Nwankwo (2020) in a study of Nigerian
performance. The study concluded that the Breweries PLC. One of the study's conclusions is
operational efficiency of Nigerian flour mill that the supply chain in Nigerian breweries
enterprises was considerably impacted by begins in agriculture, which is where the raw
inventory management techniques. ingredients are sourced, and continues via
4.6.3 The relationship between Safety malting, brewing, bottling, distribution to their
stock strategy and customer clients, and ultimately, consumer consumption.
retention in brewery companies in A research on the South-East Nigerian Breweries
South East, Nigeria. Industry's Material Management And
We reject the null hypothesis based on the Organizational Productivity was carried out by
conclusion of Hypothesis 3, where the computed Egwuatu (2021). The South-East Nigerian
value (t = 3.350 41.367) is higher than the brewery industries' productivity was shown to be
number in the table of.000. Therefore, based on significantly positively impacted by material
the probability value of (t = 3.350 41.367, p.05) control. In Nigeria's South-East, the material
we concluded that the safety stock strategy had a planning technique has a favorable, considerable
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Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
78
Advance Journal of Management and Social Sciences
Adv. J. Man. Soc. Sci
Volume: 7; Issue: 02,
March-April, 2023
ISSN: 2383 – 6355
Impact Factor: 5.12
Advance Scholars Publication
Published by International Institute of Advance Scholars Development
https://aspjournals.org/Journals/index.php/ajmss/index
Ugwu, Felix Ikechukwu, Orga Christopher Ph.D & Prof. Adonai O. Okonkwo
79