EFFECT OF MATERIAL REQUIREMENT PLANNING ON PERFORMANCE OF MANUFACTURING FIRMS IN KENYA

Abstract: Owing to the trend of globalization in recent decades, the importance of material requirements planning has been growing in various areas. For industries, material requirements planning system helps to optimize the existing production and distribution processes based on the same resources through management techniques for promoting the efficiency and competitiveness of firms. Material requirements planning system is ‘part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements. The General objective of this research was to determine the role of material requirement planning on operational performance in the East African Manufacturing Industry. The specific objective of this research project was to establish the role of elementary scheduling system, inventory control system, capacity requirement planning and demand forecasting system on operational performance in selected manufacturing firms in East African. The study adopted descriptive research design. This study focused on carefully selected 10 Manufacturing firms in East Africa that have existed for more than ten years. The study collected and analyzed data from the 10 East African Manufacturing firms identified in East Africa. This study collected and analyzed both primary and secondary data. Questionnaires was the primary data collection instrument, while secondary data was collected from institutional records, reports, journals, and past research. Secondary data was used to identify East African Manufacturing firms, while primary data was collected from respondents in East African Manufacturing firms. Data was collected using self-administered questionnaires, which was delivered to respondents and collected the following day to allow them adequate time to respond effectively. A pilot study was conducted to test the reliability and validity of the questionnaire. Descriptive statistics, including means, standard deviation, and frequency distribution were used in the study. Regarding elementary scheduling system, the study established that Elementary scheduling system had a significant and positive effect on the operational performance in the East African Manufacturing Industry. The study also established that inventory control system had a significant and positive effect on the operational performance in the East African Manufacturing Industry. The study further established that capacity requirement planning had significant and a positive effect on the operational performance in the East African Manufacturing Industry. The study final established that demand forecasting system had significant and a positive effect on the operational performance in the East African Manufacturing Industry. The study recommends that the management of the manufacturing firms should enhance on the utilization of the factory's resources by implementing an elementary scheduling system that can attribute to their competitive advantage to short product lifecycles and quick response to changes in market demand that will in turn enhance operational performance in the East African Manufacturing Industry. The study also recommends that the management of manufacturing firms should deploy inventory record accuracy practices that implement cycle counting to eliminate errors in recording, improvement of record accessibility, lower transactions cycles as well as reducing records errors in inventory operations which in turn will enhance operational performance in the East African Manufacturing Industry.

Keywords: elementary scheduling system, inventory control system, capacity requirement planning & demand forecasting system.

Title: EFFECT OF MATERIAL REQUIREMENT PLANNING ON PERFORMANCE OF MANUFACTURING FIRMS IN KENYA

Author: IAN MUTWIRI KITHURE, DR. SAMSON NYANG’AU PAUL

International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)

ISSN 2349-7807

Vol. 9, Issue 4, October 2022 - December 2022

Page No: 143-150

Paper Publications 

Website: www.paperpublications.org

Published Date: 21-December-2022

DOI: https://doi.org/10.5281/zenodo.7467274

Paper Download Link (Source)

https://www.paperpublications.org/upload/book/EFFECT%20OF%20MATERIAL%20REQUIREMENT-21122022-2.pdf