GHANA INSTITUTE OF MANAGEMENT AND PUBLIC

ADMINISTRATION (GIMPA)

BUSINESS SCHOOL

THE CHALLENGES AND PROSPECTS OF WAREHOUSE MANAGEMENT

SYSTEMSS AND ITS EFFECT ON PERFORMANCE OF AN ORGANIZATION

ICK INTERNATIONAL SERVICE LTD

BY

Names

INDEX NO: 214043193

A DISSERTATION PRESENTED TO THE GIMPA BUSINESS SCHOOL IN PARTIAL

FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTER OF BUSINESS
ADMINISTRATION (MBA)

SUPPLY CHAIN MANAGEMENT

OCTOBER, 2017
 CERTIFICATION

The undersigned certify that he has read and recommended to the GIMPA Business School for the

acceptance of a project work entitled:

THE CHALLENGES AND PROSPECTS OF WAREHOUSE MANAGEMENT

SYSTEMSS AND ITS EFFECT ON PERFORMANCE OF AN ORGANIZATION in partial
fulfilment of the requirement for the award of Master of Business Administration (MBA) in
Accounting and Taxation Degree.

Supervisors name............................................................................

Date...................................................................................................

Signature...........................................................................................

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 DECLARATION

While acknowledging information from other sources, which I have duly cited, I hereby declare

that this project work is the result of my own original research and it has never been presented, in

whole or part, for another degree in the GIMPA Business School or elsewhere.

SIGNATURE....................................................

DATE................................................................

Name

INDEX NUMBER: 214043193

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 ACKNOWLEDEMENT

I give praise, honour and thanks to the Almighty God for His grace in seeing me through to the

completion of the MBA programme. I also wish to express my deepest gratitude to my dedicated,

supportive, able and accommodating supervisor, Dr. Kwasi Awuah-Werekoh of the GIMPA

Business School for his directions, comments and insightful suggestions.

I am equally grateful to the officials of Ick International Services Ltd. for granting me interviews

and responding to my questionnaires and also for the helpful and useful materials and publications.

May God bless you all

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 DEDICATION

The piece of work is dedicated to my lovely husband Mr. Victus Kwabla Sabutey, and my

handsome and adorable son Aaron NunanaKwaku Sabutey, for their prayers, encouragement, love

and support throughout the course of study.

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 ABSTRACT

Managing stock effectively is important for any organization, running a hospital is no exception
because without enough stock, services to patients will come to a halt. Stock represents the largest
single investment in assets for most organizations. Telecommunication organizations must provide
24 hour services and accordingly, the need to keep stocks of certain materials to be able to
discharge their duties effectively. It is a generally held opinion that where stock management by a
firm is poor, delivery of service is normally affected. Hence, this study examined the challenges
and prospects of warehouse management systems and its effect on organizational performance
using ICK International service ltd as a case. A sample of 30 staff was selected for the study.
Questionnaires were used as the main instrument of data collection. The study revealed that the
organization ensures agreements with supplier for short cycle deliveries, ensures accurate
prediction of supplier delivery dates and operate Materials Requirements Planning system (MRP).
The study also revealed that the hospital ensures Strategic Supplier Partnerships as an Inventory
management practice and strictly uses Information Technology in its inventory management
practices. However, among the challenges Ick International faced with inventory management was
poor storage leading to insufficient inventories, bureaucratic process in procurement, and loss of
materials through inventory shrinkages, conflict of interest, weak management system and
insufficient funds for procurement. It was therefore recommended that there is a need for
management to emphasize the importance of inventory management and the firm should improve
the demand forecasting of major supplies and adoption of advanced information system such as
Electronic Data Interchange (EDI) to link their inventory practices with their service delivery.

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 Table of Contents
CERTIFICATION ........................................................................................................................................ ii

DECLARATION ......................................................................................................................................... iii

ACKNOWLEDEMENT .......................................................................................................................... iv

DEDICATION .......................................................................................................................................... v

ABSTRACT............................................................................................................................................. vi

Table of Contents ........................................................................................................................................ vii

LIST OF FIGURES ...................................................................................................................................... x

LIST OF TABLES ....................................................................................................................................... xi

CHAPTER ONE: INTRODUCTION

1.0 Background to the Study ......................................................................................................................... 1

1.2 Statement of the Problem ........................................................................................................................ 3

1.3 Objectives of the Study ........................................................................................................................... 6

1.4 Significance of the Study ........................................................................................................................ 6

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction ............................................................................................................................................. 8

2.2 Theoretical Framework ........................................................................................................................... 8

2.2.1 Transaction Cost Economics (TCE) Theory .................................................................................... 8

2.2.2 The Resource-Based View (RBV) Theory ...................................................................................... 9

2.3 Information Technology ....................................................................................................................... 11

2.4 Inventory Management ......................................................................................................................... 11

2.4.1 Economic Order Quantity Model ................................................................................................... 12

2.4.2 Inventory Control systems ............................................................................................................. 12

2.5 IT and Inventory Management Systems in Operations and Maintenance Service................................ 13

2.5.1 Enterprise Resource Planning ........................................................................................................ 14

2.5.2 Vendor Managed Inventory ........................................................................................................... 14

2.5.3 Materials Resources Planning ........................................................................................................ 16

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 2.5.4 Distribution Requirements Planning .............................................................................................. 16

2.5.5 Warehouse Management System ................................................................................................... 17

2.6 Summary ............................................................................................................................................... 17

CHAPTER THREE: METHODOLOGY AND ORGANIZATIONAL PROFILE

3.1 Introduction ........................................................................................................................................... 19

3.2 Research Design.................................................................................................................................... 19

3.3 Target Population .................................................................................................................................. 19

3.4 Sampling Design ................................................................................................................................... 20

3.5 Data Collection Procedures................................................................................................................... 20

3.6 Instrumentation ..................................................................................................................................... 21

3.7 Data Analysis Procedure ....................................................................................................................... 21

CHAPTER FOUR: FINDINGS, PRESENTATION OF RESULTS/ANALYSIS

4.1 Introduction ........................................................................................................................................... 22

4.2 Demographic of Respondents ............................................................................................................... 22

4.2 Inventory Management Practice of ICK International services ............................................................ 23

4.2.1 Strategic Supplier Partnerships ...................................................................................................... 24

4.2.4 Information Technology of ICK International ............................................................................... 25

4.3 Relationship between Warehouse Management System and Organizational Performance ........... 26

4.4 Service delivery challenges of ICK International ................................................................................. 28

4.5 Impact of Warehouse Management system on Service Delivery ......................................................... 29

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND

RECOMMENDATIONS

5.1 Introduction ........................................................................................................................................... 30

5.2 Summary of Findings ............................................................................................................................ 30

5.2.1 Inventory Management Practices at ICK International .................................................................. 30

5.2.2 Service Delivery Challenges .......................................................................................................... 31

5.3 Conclusions ........................................................................................................................................... 32

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5.4 Recommendations ................................................................................................................................. 32

References ................................................................................................................................................... 34

Appendix ..................................................................................................................................................... 37

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 LIST OF FIGURES

Fig 4.1 Service delivery Challenges28

Fig 4.2 Impact of warehouse management on service delivery..29

x
 LIST OF TABLES

Table 3.1 Target Population at Ick International...19

Table 3.2 Employee Sample Size...19

Table 4.1 Demographic of respondents..22

Table 4.2 Lean Inventory System...24

Table 4.3 Strategic Supplier Partnership.....25

Table 4.4 Information Technology.26

Table 4.5 Relationship between Warehouse Management System and Organizational.26

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 CHAPTER ONE
INTRODUCTION

1.0 Background to the Study

In recent years, warehouse Management has attracted a great deal of attention from people both in
academia and in industries. Many resources have been devoted to research in the warehouse
management practices of organizations. It represents one of the most important assets that most
businesses posses because the turnover of inventory represents one of the primary sources of
revenue generation and subsequent earnings for the company. In the manufacturing companies,
nearly 60% to 70% of the total funds employed are tied up in current assets, of which inventory is
the most significant component (Carter, 2002). Thus, it should be managed in order to avail the
inventories at right time in right quantity. Inventory can be also viewed as an idle resource which
has an economic value. So, better management of the inventories would release capital
productively.

Inventory control implies the coordination of materials controlling, utilization and purchasing. It
has also the purpose of getting the right inventory at the right place at the right time with right
quantity because it is directly connected with the production. The objective of any organization is
to get a good return out of every cedi invested in the company. According to Pandey (2005)
management through their policies, coordination, decision and control mechanisms must
maximize the return on investment (ROI).

Peterson and Joyce (2007) while supporting Pandey (2005) states that it is clear that ROI can be
maximized either by increasing profit margin or by reducing the capital employed or by both. In
the market situation, sales price cannot be increased (rather there is a demand to reduce it) and as
such profit can be increased only by reducing the material costs. On the other hand, the opportunity
to reduce the overheads and capital employed is more by inventory reduction (Drury, 2002). It is
thus evident that the ROI can be maximized by either reducing the material cost or reducing the
current assets by way of inventory of materials or can be optimized by increasing profits. Peterson
and Joyce (2007) maintain that it is evident that the inventory management can make a direct
contribution to increasing profitability in the following ways:
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 A. By deciding inventory norms nationally and through control systems. Inventory turnover
can be maximized which in turn will maximize current assets turnover and ROI.

B. By proper planning and control of spare parts, capacity utilization can be increased which
will increase the turnover of fixed assets and consequently increase ROI.

C. By developing dependable sources and purchasing quantity materials at competitive prices.

Materials cost per naira of sales can be brought down which will increase the profit margin.

D. By developing proper systems and control on the issue of materials, the consumption can
be minimized, reduction in wastes and rejects, resulting in reducing the materials cost,
which will increase the profit margin.

E. Establishment of farms to grow the major raw materials and less dependent on importation.

Unless operators in the manufacturing industry understand the true costs associated with inventory
management and poor inventory productivity and can review the benefits of alternative
approaches, they will continue to be complacent, accepting average profit instead of better
performance. This study holds the view that the operators in the industry adopting a holistic
operating model that improves inventory productivity, enhances sales margin, and saves millions
of Cedis in operating costs and especially on costs associated with inventory. Saving costs on
inventory start with a comprehensive organizational focus on inventory management.

Warehouse management is a vital part of the supply chain management. It is important to create
an error-free, structured and efficient system to serve customers. In this topic, we will deepen into
the challenges and prospects of warehouse management and its effect on the performance of an
organization by considering ICK International Services Limited as the case study.

Wild, (2002) recommends, proper warehousing of inventory so that when goods are ordered, they
are held at the warehouse for the least time possible minimizing holding-cost of inventory.
Consequently, other operational costs may increase inventory management costs like through the

2
balance of ordering costs, holding costs, safety stock and stock outs (Palevich, 2012) and (Wisner,
Tan and Leong 2011). Once an organization realizes this, it can develop an online inventory
management tool to monitor its inventory information by breaking it down into groups by
correlating the categories with its customers.

Warehouse Management System (WMS) is designed to introduce improvement into every aspect
of a companys warehouse operations that offers an organized approach to manage effectively. By
integrating advanced radio frequency and bar coding technologies with core warehousing
functionality, WMS provides comprehensive fulfilment centre and warehouse management,
including receiving, stocking, picking and related warehouse tasks. The best-of-breed solution
leverages state-of-the-art technology to deliver all of the functionality needed to maximize
operational efficiency and increase throughput, thus meet the primary focus of warehouse in
accuracy and timely fulfilment of customer orders.

Availability of information technology will enable accessibility of more efficient communication

and control, which is essential to a competitive global logistics capability. The impetus for the
strategic use of Management Information System (MIS) has been highlighted as the world transits
into a global village. Therefore, there is a growing research interest in the use of MIS as a strategic
weapon by organizations.

Globalization and competitive pressures have heightened the strategic use of MIS. More
specifically, Barcode data collection solutions for warehouse management system provides
powerful and flexible automatic identification system that connects the shop floor to the enterprise
software. If a warehouse is able to take on these challenges with great success the profits will
undoubtedly increase.

1.2 Statement of the Problem

A number of organizations collapse due to poor planning and corruption, which drives firms to
close down their operations. This can be stopped if proper inventory management in the warehouse
is practised and the technique thoroughly utilized for the benefit of the firm.

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Gonzalez and Gonzalez (2010) noted that management and staff have minimal knowledge on how
to apply the economic order quantity, which negates the success of an organization.

ICK International Services Limited who are currently in the Operations and Maintenance Services
ought to train their staff who engage in procurement since systems cannot work by themselves.
Once the organization has qualified personnel who understand how to apply prudent inventory
management techniques, the organizations supply chain performance would, therefore, be
achieved.

The study conducted by Gonzalez and Gonzalez (2010) shows that forecasting techniques
utilization for demand planning helps organizations plan for their inventory adequately, avoiding
regular stock-outs. The shortcomings identified showed that lack of use of EOQ and ROP by firms
led to the utilization of more funds but their utilization led to customer satisfaction and cash savings
for the organization. The study did not address supply chain performance as a result of utilizing
efficient inventory management techniques.

Warehouse management according to Onyango (2011) is a fundamental pillar in an organization

and it should be taken seriously. Firms ought to be adequately prepared for the changing
environment and as Operations and Maintenance Services operators in a multiple global
environment, sourcing and delivery of goods and services need to be well managed. Some of the
goods and services required may not be readily available within the country and thus ICK has to
apply global sourcing. Due to this, a robust supply chain is required to be in place to ensure timely
delivery and quality standards are observed. The study found that supply chain management led to
improved organizational supply chain performance through quality products and services, minimal
inventory levels, improved partnerships and communication and demand forecasting.

Integrated supply chain practices in the policies were important too as well as suppliers alliance.
Notably, middle-level management empowerment was also a key factor in improved supply chain
performance. The shortcoming found was the model used gave 50% variance in performance
implying that some factors were left out during the study that could have given an improved

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analytical model of the study. The study did not address, the extent of inventory management
techniques application that improves firms supply chain performance.

A study conducted by Maghanga (2011) established that, for the tea processing firms to survive,
they need to embrace the changing competitive trends in the market. Best business practices need
to be adopted for the business to remain relevant and competitive. However, the study did not
cover the need to assess the management of the supply chain on the larger agricultural sector by
looking at impacts of firms supply chain performance.

Stock shortages are a headache for most organizations as expressed by Githendu, Nyamwange and
Akelo (2008) and it leads to customers dissatisfaction, which eventually leads to the low
performance of a firm. Organizations ought to ensure that their inventory is monitored from time
to time to avoid stock-outs. Due to the manual system of checking and validating, the stochastic
nature of demand and lead time is not achieved. Also, lack of automated systems, stock-outs are
experienced often and replenishment is done hurriedly leading to costly inventory management
and likewise low-performance standards.

The study conducted by Githendu, Nyamwange and Akelo (2008) indicated that firms that have
centralized stock holding have an advantage because they are able to control the stocks and avoid
stock duplication in their subsidiaries. Since high-value stocks are held, there are instances where
the organization will have too much stock in their warehouse implying a huge part of their cash is
tied down with stocks. Also, a proper inventory management system is lacking causing frequent
stock-outs for the organization. The study did not address inventory management techniques that
enhance service levels ensuring stocks are distributed on time and at the right place meeting
customers demands.

To the best knowledge of the researcher, no study has been done on the challenges of warehouse
management and its effect on organizational performance in the operations and maintenance
services industry.

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It is against this background therefore that the researcher seeks to find out the challenges affecting
warehouse management and their effects on organizational performance and address them
accordingly.

1.3 Objectives of the Study

1. To find out the relationship that existed between warehouse management and organisational
performance

2. To establish the problems associated with ICK International Services Limited on their
warehouse management as against its performance

3. To identify the challenges that ICK International Services Limited faces in services delivering
to customers

4. To establish the facts that relate to whether good warehouse management leads to good services
delivering

5. To provide recommendations to ICK International Services Limited in order to improve their

warehouse management.

1.4 Significance of the Study

The study is aimed at providing adequate information to Operations and Maintenance Services in
Ghana to improve upon their performance in managing warehouse inventory adequately.

2. Supply chain professionals and finance managers will find this research useful for knowledge
and operational implementation.

3. The government will benefit indirectly to streamline the inventory management, the Ghanaian
public will benefit greatly from the information that will be gathered to use to rationalize their
supply chain systems.

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4. Donor funding institutions will also benefit from this study, they will know how to streamline
their grant agreements with future projects run by Operations and Maintenance Services so that
the impacts are felt and funds donated do not go waste.

5. Academicians and scholars will also find this research valuable to their study and advancement
of their knowledge.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction
In various Operations and Maintenance Service providing companies and organizations
worldwide, Information and Communication Technologies (ICTs) play a role in the process of
providing effectively efficient services, products and packages to better satisfy their customers.
Companies face a dilemma in today's competitive marketplace, where customers demand
customized products and services and require that their orders are filled quickly, however,
customers do not want to pay a premium for this customization and availability (Graman and
Magazine, 2006). Therefore, organizations are exploring ways toward postponement strategy in
response to constantly changing demands (Yang et al.(2004).
Technological integration, data quality, system-to-system integration, and ICT or technical issues
have been identified as major challenges for many organizations when implementing inventory
control, AOT Consulting (2003).

This chapter, therefore, describes the integration of ICTs in inventory management systems and
their potential benefits to enhancing the performance of ICK International Services Limited.

2.2 Theoretical Framework

The impact of ICT on inventory management can best be explained by two theories namely the
Transaction Cost Economics (TCE) theory (Maltz, 1993; Skjott-Larsen, 2000) and Resource Based
View (RBV) theory of the firm (Barney, 2011; Pandza, 2003).

2.2.1 Transaction Cost Economics (TCE) Theory

The Transaction Cost Economics (TCE) theory argues that the use of ICT will lead to reduced
transaction costs associated with the management of transactions (Coase, 1937; Alchian &
Demsetz, 1972; Williamson, 1975) and by efficient coordination. Explicitly recognizing the costs
of coordination among economic entities in markets, TCE stresses that a firms central task is to

8
coordinate transactions efficiently (Williamson, 1985). ICT can lower coordination costs, and in
supply chain contexts, digitally enabled integration capability can substantially improve
transactional efficiencies through increased information sharing and communications capabilities,
resulting in improved supply chain performance (Zhu & Kraemer, 2005). Furthermore, as argued
by (Lopez, 2013), ICT resources impact on communication improvement; this includes internal
and external communication and coordination of activities and this enables a faster and more
efficient use of information both within the firm and with external agents, such as customers and
suppliers. TCE highlights on the role of the digitally enabled supply chain management in
competitive environments.

An important feature of a competitive environment is the extensive competitive actions in the

markets, such as competitive entry, price change, supplier alliances, and new product introduction
(Ferrier, 2001).

To improve the performance or even survive in competitive environments, a firm needs to adapt
its businesses to respond to competitive actions (Sambamurthy et al, 2003). If a manufacturers
operation is frequently affected by competitors actions, it may face greater needs to coordinate
with supply chain partners. For example, a manufacturer that needs to modify the design of its
product, because of market entry or new products launched by competitors, also needs to modify
the design of upstream components that constitute the product; it may also need to rearrange
downstream channels for new product distribution. These may induce considerable coordination
tasks (Bensaou, 1997). Accordingly, technologies that help reduce coordination costs are more
valuable in intensely competitive markets.

2.2.2 The Resource-Based View (RBV) Theory

This theory states that to transform a short-run competitive advantage into a sustained competitive
advantage requires resources that are heterogeneous in nature and not perfectly mobile.
Effectively, this translates into valuable resources that are neither perfectly imitable nor
substitutable without great effort. If these conditions hold, the bundle of resources can sustain the
firms above average.

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Barney (2011) argues that the RBV approach has evolved from a nascent, upstart perspective to
one of the most prominent and powerful theories for describing, explaining, and predicting
organizational relationships. The RBV theory attempts to explain how technology creates value
(Zhu & Kraemer 2002, 2005). The RBV theory attributes the improvement in firm performance to
valuable resources or resource bundles (Barney 1991, Peteraf 1993). ICT creates value to the firm
indirectly as it affects other resources or processes which in turns lead to performance
improvement and hence competitive advantage. Therefore, researchers may find it particularly
beneficial to use intermediate-level dependent variables at the business process, department, or
project level (Wade & Hulland 2004, pp. 129130). In light of this logic, the study will particularly
address the impact of ICT on inventory management by focusing on the inventory management
practices; supplier relationships, inventory operations, procurement and ordering processes,
warehousing and storage management process, and customer relationships through which such
impact can be felt in the organization. Revenue generation and cost reduction are the two major
dimensions of process performance improvements through supply chain integration.

ICT adoption is aimed at process improvement, primarily cost reduction and revenue generation
((Mukhopadhyay & Kekre, 2002). Such improvements, seen from the RBV, stem from resource
synergy along the supply chain. Effective SCM aims to synchronize supply, production, and
delivery (Lee et al, 2000). For this to happen, firms need to leverage the connectivity of the Internet
to create an inter-firm digital platform, enabling real-time information sharing, and improving
coordination of allocated resources across the supply chain (Lee, 2004). The digital platform helps
establish connections among separate resources owned by supply chain partners, thus translating
them into bundles of coexisting resources responsive to each other (Zhu & Kraemer, 2002). This
is consistent with the notion of creating resource synergy as advocated by the RBV (Conner, 1991).
In inventory management, such value enhancement is manifest in the adoption of innovative
techniques such as vendor managed inventory and business models that rely heavily on
information sharing and collaborative planning. One such model is the Collaborative Planning,
Forecasting and Replenishment (CPFR) model which takes a holistic approach to supply chain
management and combines the intelligence of multiple trading partners in planning and fulfilling
customer demand by using common metrics, language and firm agreements to improve efficiency
for all participants. CPFR links Operations and Maintenance Service best practices category

10
management, supply chain planning and execution processes to increase availability while
reducing inventory, merchandising, transportation and logistics costs.

2.3 Information Technology

Development of IT is increasing at a rapid pace in an effort to fill gaps in the identified market and
which promise to meet needs of users in various fields. New software and matching equipment
have been developed and adapted to daily lives of people. Examples of developments in ICT tools
include Smartphones, tablet computers, cloud computing, fast internet speeds now in Fourth
Generation (4G) stage among others. These can be adapted to fit into Operations and Maintenance
Service to increase operational efficiency. Some of the areas where ICT is applied in a business
context include linking business partners and players through the network, fast generation of
information and seamless decision making by multiple stakeholders.

Today, some organizations are dependent on ICT for deploying e-commerce platforms to increase
business presence and link to customers, data mining where patterns can be used to guide firms to
make timely decisions and simplification of tasks that otherwise could be unwieldy to manage by
humans. Because businesses are dependent on ICT in the improvement of service delivery, they
have incorporated it into their strategic plans to give it deserved attention (Kodama, 2013).
Applications of ICT are as wide as there are the needs of an organization; they can range from the
simple point of sale unit to a whole organization where Enterprise Resource Planning system is
installed to manage almost every aspect of the organization. Some of these areas include supply
chain management, human resources, customer management and accounts (Duggan, 2012).

2.4 Inventory Management

The inventory management is regarded as a key element for the reduction and control of total costs
and improvement of the level of service provided by the companies (Wanke, 2004). For (Roy,
2012), the area plays very important role in the overall cost of operations and supply chain of any
business big or small. For Han (2007), inventory is used as a cushion against the supply and
demand uncertainties. In the same vein, for Khunagornniyomrattana et al (2007), inventory is a

11
double-edged weapon, since the lack of inventory leads to loss of productivity, while excess
inventory leads to loss of profitability. Thus, (Oliveira & Rodriguez, 2008) argue that inventory
management has direct and significant effects on operational efficiency (performance) and
company finances and Roy (2012) points out that an effective inventory management will always
give a competitive advantage to the business over its competitors.

2.4.1 Economic Order Quantity Model

Bachetti, Plebani, Saccani and Syntetos (2010) argues that inventory management need to be
organized in a logical way so that the organization can be able to know when to order and how
much to order. This can only be achieved through the Economic Order Quantity (EOQ)
computation. Economic order quantity enables organizations to plan their inventory replenishment
on a timely basis such as monthly, quarterly, half-yearly or yearly basis. By so doing, it enables
firms to have minimal storage costs or zero within their warehouses since inventory is coming in
and going out immediately. Thus, this tends towards the just in time concept of supply chain
management adopted by Toyota Motor Corporation in Japan which helps in having zero holding
costs, (Schonberger, 2008). Thus, as organizations try to improve the inventory management, the
Economic Order Quantity (EOQ) and Re-order Point (ROP) are important tools that organizations
can use to ensure that inventory supply does not hit a stock out as explained by Gonzalez and
Gonzalez (2010). Over time, organizations have been maintaining their inventory in a haphazard
manner that has necessitated a change in the way firms conduct their business. Stock-outs have
been experienced adversely leading to customer dissatisfaction hence; firms are changing their
approach to be able to remain relevant by employing Economic Order Quantity (EOQ) and Re-
order Point (ROP) for customer satisfaction.

2.4.2 Inventory Control systems

An inventory system controls the level of inventory by determining how much to order (the level
of replenishment), and when to order. There are two types of inventory control systems; the
continuous or perpetual inventory system and the periodic inventory system. In a periodic
inventory accounting system, the inventory account is updated periodically, usually daily, monthly
or quarterly. GAAP standards require companies to record inventory purchases in a separate
account, possibly titled Purchases, continually. However, under the perpetual inventory system,

12
inventory accounts are updated automatically and continuously. Advances in the computer and
network technology make perpetual inventory systems possible, and implementing this type of
system requires an extensive technology expense. Point-of-Sale systems tied directly into
accounting software packages that can update accounting records and other inventory records on
the fly using information from barcode scanners, radio frequency identification tags or cashier
input. Such a system is not only quick and accurate but provides management with continuously
updated information on the status of inventory levels.

2.5 IT and Inventory Management Systems in Operations and Maintenance Service

Modern inventory control systems often rely upon barcodes and radio-frequency identification
(RFID) tags to provide automatic identification of inventory objects. To record an inventory
transaction, the system uses a barcode scanner or RFID reader to automatically identify the
inventory object and then collects additional information from the operators via fixed terminals
(workstations), or mobile computers. Efficient inventory management is based on an inventory
management information system, which is a database for storing and administering all types of
data required for efficient and accurate inventory management.
This may include modules or fields for keeping track of all items and locations, requisitions, back
orders, required levels of inventory on hand, reorder points, lead times, inventory error tracking,
and more. This type of system may interface with an Enterprise Resource Planning (ERP) and
other applications. An ERP management information system integrates areas such as planning,
purchasing, inventory, sales, marketing, finance, human resources, etc. (www.investopedia.com).
ERP has been used extensively in inventory management with a varied of techniques applied
innovatively ranging from Vendor Managed Inventory, Materials Resources Planning and
Distribution Resources Planning. An equally important system is a Warehouse Management
System (WMS), which does not contain customer data or prices as ERP rather; a functioning
inventory management system needs the continuous exchange between WMS and ERP.

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2.5.1 Enterprise Resource Planning
ERP is a process by which a company (often a manufacturer) manages and integrates the important
parts of its business. ERP is designed to replace paper-based systems by analyzing data from all
areas of a companys resources. ERP covers all functions of a business such as purchasing,
manufacturing, distribution, and inventory management. ERP is designed around a number of
modules each of which can stand alone or combined with others that include finance, logistics,
manufacturing, supplier management and human resources (Stevenson, 2007).

Modern Operations and Maintenance systems integrate Point of Sale and ERP system to provide
more accurate and reliable information and better cost control benefits. The use of barcode
technology to capture and share data almost instantly through the supply chain reduces inventory
costs, eliminates errors, improves document tracking and effectively streamlines business
processes. The Electronic deep sea, commonly used in Operations and Maintenance Service,
check-out user login information enables Operations and Maintenance Services to raise reliable
end-user information, which is vital to the firms planning purposes.

2.5.2 Vendor Managed Inventory

Inventory replacement decisions are centralized with upstream manufacturers or distributors in
this JIT technique. It enables manufacturers or distributors to eliminate the need for the customer
to reorder, reduce or exclude inventory and stock-outs. Under such an agreement, the vendors
obtain warehouse or point-of-sale information from the retailer and use that information to make
inventory-restocking decisions. This point of sale could be facilitated by the use of Electronic Data
Interchange (EDI) systems at the Operations and Maintenance Service (Bailey et al, 2005). In a
VMI partnership, the supplier, usually the manufacturer but sometimes a reseller or distributor,
makes the main inventory replenishment decisions for the consuming organization. The purchase
order acknowledgement from the vendor may be the first indication that a transaction is taking
place: an advance shipping notice informs the buyer of materials in transit. The arrangement
transfers the burden of asset management from the consuming organization to the vendor, who
may be obliged to meet a specific customer service goal (usually some kind of stock target).

14
The newest trend in the area of inventory control and management is vendor-managed inventory
(VMI) systems and agreements. In a VMI system, distributors and/or manufacturers agree to take
over the inventory management for their customers. Based on daily reports sent automatically from
the customer to the distributor, the distributor replenishes the customer's stocks as needed. The
distributor or manufacturer sees what is selling and makes all necessary arrangements to send the
customer new products or parts automatically. No phone calls or paperwork are necessary allowing
the supply chain process to remain uninterrupted.

The benefits that can accrue to both parties in a VMI arrangement are noteworthy. Both parties
should experience a savings of time and labour. The customer is able to maintain fewer items in
stock and can rely upon a steady flow of products or parts. The vendor or distributor benefits in
two ways. First, a supplier is able to better anticipate production requirements. Second, the supplier
benefits from a strong relationship with the customer, one that is more difficult to alter that would
be a vendor-customer relationship in which such automated systems did not exist.

The tracking of inventory can be possible by use of Radio Frequency Identification (RFID) which
enhances the efficiency of inventory management and replenishment practices. Substantial
benefits in the form of reduced interruptions in production or lost sales due to items being out of
stock will accrue to the Operations and Maintenance Service. RFID enables bulk reading where
many tags can be read in a short space of time a typical read rate is hundreds of tags per second,
the tags can be read over a very long range many hundreds of meters in the case of specialized
tags. RFID tags are durable because they can be ripped, soiled and performance is not impaired.
They can do a bulk reading in a short space of time. All these benefits enhance the effectiveness
of inventory management processes and hence the overall the supply chain (Gerald & David,
2000). RFID and sensor data is real-time, high volume and operational in nature. RFID technology
is designed to inform and enrich systems and processes, not be an end in itself.

As with all outsourcing arrangements, there are potential negatives to a VMI system. The first is
the partial loss of control experienced by the customer in managing his or her own inventories.
Second is the problem this type of system poses on a vendor in the case of volatile sales periods.
It is very difficult for a distributor or manufacturer to hold large inventories for one customer on a

15
VMI system who is experiencing a slowdown in sales while having to ramp up for another
customer who is experiencing rising demand. Both parties to a VMI agreement must weigh the
pros and cons of such a system thoroughly and be sure to include in any VMI agreement
prearranged methods for dealing with periods of volatile sales patterns.

2.5.3 Materials Resources Planning

This is a technique that assists in the detailed planning of production. The characteristics are that;
it is geared specifically to assembly operations, it is a dependent demand technique and it is a
computer-based information system. The aim of MRP is to make available either purchased or
company manufacturing assemblies just before they are required by the next stage of production
or for delivery. It enables orders to be tracked throughout the entire manufacturing process and
assist purchasing and control departments to move the right supplies at the right time to
manufacturing or distribution points (Lysons & Farrington, 2006).

Using barcode technology integrated with the MRP system saves time, increases efficiency and,
above all, improves accuracy. It can help maximize productivity for warehouses, distribution
centres and manufacturers alike. Businesses also have their pick of a wide variety of barcode
solutions, each offering different levels of automation, allowing them to find the right fit.

MRP plays a vital role in the supply chain by helping coordination efforts of production,
engineering, purchasing, marketing and human resource to achieving a common strategy or
business plan (Gerald & David, 2000). It also helps the supply chain managers to analyze
implications of their decisions. The changes can easily be factored into the system as they arise,
such as rush orders and coordination of production with purchasing, marketing and human
resources in such a way as the timing of supplier deliveries, using sales forecast to determine
master budget and planning recruitment or run-down of personnel.

2.5.4 Distribution Requirements Planning

Distribution requirements planning (DRP) is scheduling technique that controls inventory and
applies MRP principles to distribution inventories. It can also be considered as a method of
handling replenishment of the stock in an organization. DRP is useful for both manufacturing

16
organizations, such as car manufacturers that sell their car via several distribution points, such as
regional and local distributors, and purely merchandising organizations, such as Operations and
Maintenance Service (William, 2009).

2.5.5 Warehouse Management System

A warehouse management system (WMS) is a key part of the supply chain and primarily aims to
control the movement and storage of materials within a warehouse and process the associated
transactions, including shipping, receiving, put away and picking. Warehouse management
systems often utilize an automatic identification and data capture technology, such as barcode
scanners, mobile computers, wireless LANs and potentially radio-frequency identification (RFID)
to efficiently monitor the flow of products.

2.6 Summary
This chapter has reviewed literature pertaining to the impact of IT on inventory management. The
literature has demonstrated how the advancement in IT and the plethora of ICT tools where
adopted have transformed supply chain management and of interest inventory management. In the
context of a highly volatile global business environment, high customer expectations, it is
imperative for Operations and Maintenance Service firms to improve their product and service
offering to remain competitive. To ensure such agility and customer responsiveness, adoption of
modern IT cannot be gainsaid.

There is a significant development in IT in the general retail sector that if applied effectively, a
business can gain in improving inventory management performance. The use of ICT tools such as
barcodes, RFID and EDI is a necessary integration with modern IT systems as they facilitate
information capture, aggregation and sharing. Various IT systems have been used in Operations
and Maintenance Service in the telecommunication sector are largely modules of ERP system such
as VMI, MRP and DRP. However, functioning inventory management system needs the
continuous exchange between WMS and ERP. However, most of the literature on the impact of IT
on inventory management has focused on operational efficiency and customer satisfaction. Even
so, these studies have been conducted in developed countries that have significant differences in
IT infrastructural development from the current scenario in the country. Whereas there is the

17
documented literature of IT application in the retail sector, it is assumed that level of adoption and
its impact on inventory management is the same for all regions. Further, the impact of IT adoption
on inventory management performance is beyond improving operational efficiency and as the
literature opines it affects decision and activity points involved in the overall process of inventory
management including supplier relationship, warehousing and storage, procurement and ordering,
sales process and customer relationships. However, there is little attention accorded to this end by
all existing literature. Through this research, the impact of IT on inventory management would fill
this gap.

18
 CHAPTER THREE
RESEARCH METHODOLOGY

3.1 Introduction
This chapter presents the research design and explains the methodology used in gathering data.
The study will be conducted within ICK International Services amongst the companys employees;
the study will be exploratory in nature, using a case study research design. A case study involves
a careful and complete examination of a social unit and departments within the organization and
embraces the depth of a study. In this case, the study will involve ICK International Services
Limited, which is in the Operations and Maintenance Service in the Telecommunication industry.

3.2 Research Design

A descriptive research design was used in this study. Gay (1983) defines descriptive research as
the process of collecting data in order to test a hypothesis or to answer questions concerning the
status of the subjects under study. The purpose of this type of study was to determine and report
the way things are (Mugenda 2003). This design is considered appropriate in this study since it
describes what is happening at the present and the researcher is only reporting on the status of the
impact of technology on inventory management in ICK International Services.

3.3 Target Population

The total employees population at ICK International Services Limited is 95; in conducting the
research, the researcher will concentrate on a sample of 30 employees.
The study will be carried out at ICK International Services Limited and it will be composed of
companys staff and procurement customers.

19
Table 3.1: Target Population at ICK International Services Limited
Management Levels Frequency Percentage
Strategic 5 5.3%
Tactical 22 23.1%
Operational 68 71.6%
Total 95 100.0%
Source: Fieldwork 2017

3.4 Sampling Design

According to Mugenda (1999), for any meaningful and representative research, a sample of at least
10% is representative enough. In this study, the Stratified random procedure will be employed so
as to obtain 3 strata of the strategic management, Tactical management and operational
management level. A sample of over 5%, 23% and 71% will be taken from the strategic
management, Tactical management and operational management respectively. Systematic random
sampling will then be used to identify the respondents of the study. This sampling procedure
ensures the equal chance of every member in the population to be chosen for research (Cooper and
Schindler, 2004).This method enables researchers to obtain samples that are representative of the
sample. The method saves time, money and gives the researcher precise solution and answers in
short time.

Table 3.2: Employees Sample Size

Management Levels Frequency Sample size Sample Percentage
Strategic 5 2 6.60%
Tactical 22 8 26.60%
Operational 68 20 66.80%
Total 95 30 100.00%
Source: Fieldwork 2017

3.5 Data Collection Procedures

The procedure to be used to collect data will include questionnaires, which will be distributed to
the respondents, and time will be allocated to them to complete and return the responses. Follow-
ups will be made to ensure the success of the procedure.

20
The main tool will be questionnaires, which will consist of both open-ended and closed-ended
questions. Secondary data will also be used, for it is very crucial to determine issues concerning
the variable relations.

3.6 Instrumentation
This research will use questionnaires to gather primary data, questionnaires will be taken to various
employees within the company for them to complete and return them within a specified period of
time. This method is economical in terms of time and cost and thus will be able to cover a large
number of respondents.

3.7 Data Analysis Procedure

All data collected will be checked for completeness, coded and tabulated. It will then be analyzed
using Statistical Package for Social Sciences (SPSS) to generate descriptive statistics, which will
enable the researcher to draw conclusions and inferences from the sample results to the population.
Quantitative data will be used to represent the results in the form of graphs, charts and tables
according to the objectives and research questions of the study.

21
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Introduction
This chapter presents research findings and analyzes data obtained through questionnaires from
respondents. The main aim of this study is to assess the impact of warehouse management on ICK
International Services. The researcher gathered data from all respondents.

The results are presented in the form of graphs and charts to indicate the responses to the following
key areas of the study: demographic analysis, analysis of the objectives and other essential
thematic areas relevant to the objectives of the study.

4.2 Demographic of Respondents

Table 4.1
Demography Characteristics Frequency Frequency %
Male 12 40%
GENDER OF Female 18 60%
RESPONDENTS N 30 100%
Accounts department 6 20%
DEPARTMENT Administration 8 27%
Logistics department 16 53%
N 30 100%
WASSCE 9 30%
EDUCATIONAL Diploma 11 37%
QUALIFICATION 1st Degree 6 20%
2nd Degree 4 13%
N 30 100%
1-3 Years 12 40%
YEARS AT ICK 5-10 Years 13 43%
INTERNATIONAL 10+ Years 5 17%
N 30 100%
Source: Field Survey, 2017

22
The study gathered demographic characteristics of respondents to determine how they can assist
to provide accurate data for the study. As indicated in Table 4.1, 40% of respondents were females
whereas 60% were males. This is significant for the study as it gives an almost balanced
representation of both genders in expressing their respective opinions to reduce any bias in the
responses of the respondents. Majority of respondents (37%) were holders of Diploma whiles 30%
had WASSCE qualification. Respondents with a 1st and 2nd Degree represented 20% and 13%
respectively. This trend is an indicator that the respondents will be able to understand the questions
of the study and can answer satisfactorily. The respondents cut across various departments within
the organization. Logistics department has the highest respondents of 53% followed by the General
Administration with 27% and the Accounts department being 20%. Finally, the study sought to
know how long respondents have been working with ICK International. 17% had worked for 10
years and above whereas 40% had worked for 1-3 years, however, 43% of respondents had been
working for 5-10 years. This put the respondents in a position to better understand the systems and
structure implemented at ICK International and to make known their objective views on the study
objectives.

4.2 Inventory Management Practice of ICK International services

The first objective of this study is to determine the inventory management practices at ICK
International Services. The respondents were asked about the existence of an inventory
management policy. 23 respondents answered yes and 7 answered no. In answering how the stock
is replenished, the majority of respondents indicated that replenishment of stock is manually done
at internal customer request. The study also revealed that ICK International doesnt use any
inventory model but rather the two-bin system and the use of requisition forms to manage
inventory. Finally, 18 respondents agreed to a period stock taking whereas 12 respondents noted
stock-taking was conducted as and when needed.

Other inventory management practices were presented to respondents to determine their level of
agreement and same are displayed in the various tables below. Table 4.2 presents views of
respondents on the practice of lean inventory system at ICK International. It could be seen from
the Table 4.2 that ICK International ensures Lean Inventory System (LIS) as an inventory
management practice. The mean responses for most of the five variables used to ascertain LIS
were more than 4.0. Variable 2 received the highest agreement with mean 5.35, this was followed

23
by variable 3 with mean 5.09. However, Variable 1 received the highest disagreement with a mean
2.83 preceded by Variable 5 with a mean of 3.78. This implies that to ensure lean inventory system
being practised, ICK International ensures agreements with the supplier of short cycle deliveries,
ensure accurate prediction of supplier delivery dates and operate materials requirements planning
system (MRP). These findings support earlier studies by Oballah et al. (2015), Ogbo et al. (2014)
and Anichebe and Agu (2013).

Table 4.2 Lean Inventory system of ICK International

Lean Inventory System Items N Min. Max. Mean Std. Dev.
Variable 1 Operation of Just-In-time (JIT) 30 1 4 2.83 1.651

Variable 2 Agreements with the supplier for short 30 2 5 5.35 1.538

cycle deliveries.

Variable 3 Accurate prediction of supplier delivery 30 2 5 5.09 1.611

dates

Variable 4 Operation of materials Requirements 30 2 5 4.83 1.450

planning system (MRP)

Variable 5 Little or no Expediting 30 1 5 3.78 1.519

Source: Field Survey, 2017

4.2.1 Strategic Supplier Partnerships

Table 4.3 presents respondents views on ICK International practising strategic supplier partnership
(SSP) as an inventory management system. 7 variables that comprise SSP were presented to
respondents to select what they agree with the most. The study revealed that variable 6 had the
highest agreement with a mean 5.57. Variable 5 with a men 5.48 received the second highest
agreement whiles the 7th variable obtaining a mean 5.18 was third. All the other variables had a
mean score between 4.0 and 5.0 which also indicate agreement. The outcome of the study implies
that strategic supplier partnership as an Inventory management practices is strongly being
implemented at ICK International. This supports previous studies conducted by Ogbo et al. (2014)
and Oballah et al. (2015)

24
Table 4.3 Strategic Supplier Partnership
Strategic Supplier Partnership N Min. Max. Mean Std. Dev.
Variable 1 Involving suppliers early in product 30 1 5 4.65 1.828
design process

Variable 2 Use of suppliers to manage inventory 30 2 6 4.22 1.837

on behalf of the organization
Variable 3 Use of fewer suppliers as opposed to 30 2 6 4.17 1.568
many suppliers.
Variable 4 30 2 6 4.87 1.916
Frequent meetings between ICK
International inventory staff and the
suppliers
30 1 6 5.48 1.457
Variable 5 Complete information sharing between
ICK International and its suppliers
30 2 5 5.57 1.455
Variable 6
Proper communication between ICK
International and suppliers
30 2 6 5.18 1.317
Variable 7
Long-term agreements between ICK
International and its suppliers

Source: Field Survey, 2017

4.2.4 Information Technology of ICK International

To determine the Inventory management system used by ICK International, the study sought to
identify the use of Information Communication Technology (ICT) in the inventory management
system of ICK International. Table 4.4 indicates that majority of respondents agree ICK
international has a computerized inventory management system. This is represented with a mean
of 6.26. majority of respondents represented by mean 3.02 disagreed ICK Internationals
computerized system are linked suppliers in a real-time environment although a mean of 5.27
indicated ICK International uses Electronic Data Interchange Technology (EDI). This implies that
ICK Internationals inventory management system isnt fully computerized. This is in agreement
with previous studies conducted by Ogbo (2014).

25
Table 4.4 Information Technology
Information Technology Items N Min. Max. Mean Std.
Dev.
Variable 1 ICK International has 30 3 5 6.26 .681
computerized all inventory
management system

Variable 2
ICK International are
electronically linked with 30 2 4 4.04 1.801
suppliers in a real-time
environment

Variable 3 ICK International uses Electronic 30 2 6 5.27 1.404

Data Interchange Technology
(EDI)

Source: Field Survey, 2017

4.3 Relationship between Warehouse Management System and Organizational

Performance
Table 4.5
Independent variables N Agree Disagree None
Increased Customer Satisfaction 30 18 7 5

Employee Job Satisfaction Increased 30 21 9 0

Save Time and Money 30 23 7 0

Better Balanced Inventory 30 19 9 2

Better Demand Planning 30 25 3 2

Improved Security 30 23 6 1

Improved Supplier and Customer 30 22 8 0

Relationships

26
To assess the relationship which exists between warehouse management systems and the
organizational performance of ICK International, the study sought the views of respondents by
asking whether they agree or disagree to the relationship drawn by the study. The findings are
presented in Table 4.5 above. 18 respondents agreed that the warehouse management system
implemented by ICK International has increased customer satisfaction. Some explained, there isnt
shortage of materials at the warehouse which put ICK International to always deliver to its clients.
7 disagreed with this assertion whereas 5 respondents didnt answer this question. Similarly,
Majority respondents believe the warehouse management system has increased employee job
satisfaction at ICK International although 9 respondents disagree with this claim. 7 respondents
believe Warehouse management system hasnt reduced cost and saved ICK International time but
23 respondents believe otherwise. ICK International has an improved inventory system which
provided accurate balance inventory as indicated by 19 respondents. They claim with a click of a
button, stock levels of all materials in the warehouse could be determined. 9 respondents disagreed
and 2 failed to answer this question.

The study also revealed 25 respondents agree the warehouse management system has improved
the demand planning of ICK International. They explained that ICK International is able to meet
demand deadlines, however, 3 respondents disagree whiles 1 respondent failed to answer the
question. Stealing of Materials from the warehouse has been drastically reduced according to the
23 respondents who agreed warehouse management system has improved the security of ICK
Internationals stock. They further explained that, with the barcode on all materials, it was
impossible to steal anything from the warehouse, a situation which wasnt so prior to the
implementation of warehouse management system. 6 respondents disagreed with this assertion
whereas 1 respondent failed to answer the question. When asked the impact of warehouse
management on the supplier-client relationship, 22 respondents agreed there is a positive
relationship whereas 8 respondents disagreed.

Based on the responses from respondents, the study can make a direct relationship between the
warehouse management and organizational performance. The outcome of all the variable tested
was positive. These findings are in tandem with previous studies conducted by Oballah et al.
(2015), Ogbo et al. (2014) and Anichebe and Agu (2013).

27
4.4 Service delivery challenges of ICK International
Fig 4.1

SERVICE DELIVERY CHALLENGES

Agree Disagree None

27
25
23

19

8
5

5
3
2

1
ECOMONIC ENVIRONMENTAL REGULATORY MANAGEMENT

Source: Field Survey, 2017

Fig 4.1 above presents findings on the challenges ICK faces in delivering service to clients. 23
respondents agreed economic challenges affect the service delivery of ICK International. Cost of
borrowing, inflation and the exchange rate were cited as the main economic challenges which
affect the ICK International. 5 respondents disagreed ICK International is faced with Economic
challenges in service delivery with 2 respondents not answering. Respondents were asked if ICK
International is faced with environmental challenges when delivering services, 25 respondents
agreed, 3 disagreed and 2 failed to respond. Some environmental challenges poor weather
conditions and unpredictable weather conditions. According to the 27 respondents who agreed that
ICK International is faced with Regulatory challenges, there are environmental regulations in
citing cell sites, safety requirements. Respondents noted, these regulations although good, comes
with an additional cost to ICK International. 2 respondents disagreed ICK International is faced
with regulatory challenges in service delivery. Finally, the internal management structure and
systems were identified by 19 respondents as a service delivery challenge. 8 respondents disagreed
whereas 1 respondent failed to answer.

28
4.5 Impact of Warehouse Management system on Service Delivery
Fig 4.2

SERVICE DELIVERY
theft time bound client satisfaction

11%

25%

64%

Source: Field Survey, 2017

The greatest impact of warehouse management on service delivery is the customer satisfaction as
indicated in Fig 4.5. 65% of respondents indicated that good warehouse management system
implemented by ICK International has resulted in client satisfaction. 25% of respondents also
noted timeliness as an end result of good warehouse management system. 11% of respondents also
noted that good warehouse management system resulted in theft reduction during the service
delivery.

29
 CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction
This chapter presents a summary of the findings of the study, conclusions drawn and provides
practical recommendations to the identified problems based on the findings of the research. This
chapter discusses the findings uncovered by the administration of the questionnaires.

5.2 Summary of Findings

To achieve the study objectives, the summary of the study findings is presented in relation to the
objectives of the study. The discussion of the results in the previous chapter shows the following
main findings.

5.2.1 Inventory Management Practices at ICK International

The first objective of the study was to determine the inventory management practices at ICK
International. The majority of respondents indicated in the affirmative that there is an inventory
management policy. The stock is replenished manually at internal customer request and
stocktaking is done at a stipulated time intervals. The majority respondents also indicated that they
are not used to any inventory model but rather they use the two-bin system and the requisition
forms to manage inventory.
For ensuring lean inventory system as inventory management practice, St. Martins hospital
ensures agreements with the supplier for short cycle deliveries, ensures accurate prediction of
supplier delivery dates and operate materials Requirements planning system (MRP). ICK
International ensures Strategic Supplier Partnerships as an Inventory management practice as
responses indicated such. The findings finally revealed that ICK International strictly uses
Information technology as an Inventory management practice as responses indicated such.

30
5.2.2 Relationship between warehouse Management System and Organizational
Performance

The study established a direct relationship between warehouse management system and
organizational performance of ICK International. Majority of respondents agreed key factors that
determine organizational performances are directly impacted by warehouse management systems.
The study identified that job satisfaction is positively impacted by warehouse management
systems. With a proper warehouse system in place, the chances of shortages are reduced, making
employees have access tools and materials needed to work. Similarly, warehouse management
systems increase customer satisfaction. Service deliveries are not fraught with delays, unexpected
shortages. The study also found Warehouse management system is directly related to time and
cost savings, better-balanced inventory that enables ICK International to better plan demands.
Losses at the warehouse due to theft, negligence has reduced significantly due to warehouse
management system. Finally, the majority of respondents agreed that rifts and frictions that ensue
between suppliers and ICK International have been reduced.

All these factors culminate to determine the business performance of ICK International. By
extrapolation, the study can conclude that Warehouse management systems at ICK International
have directly impacted its business performance.

5.2.2 Service Delivery Challenges

The study identified 4 factors that posed as challenges to ICK Internationals service delivery. The
findings indicate that inflation rate and exchange rate had dire consequences on ICKs service
delivery. It was found that majority of materials used are imported from other countries. The
organization is also faced with environmental challenges. Recent unpredictable climate conditions,
environmental degradation and the issues of climate change affect the service delivery of ICK
International. A number of the regulatory requirement must be fulfilled by ICK international in
the delivery of service. The National Communications Authority (NCA), Environmental
Protection Agency (EPA) and Organized Labour has stringent regulations ICK International must
comply with. Noncompliance comes with sanctions whereas complying with these regulations
comes at a cost to the operations of ICK International. The final challenges identified by
respondents is the internal management structure and style of ICK International. The study found
that every decision taken needs the approval of management. Respondents explained that they

31
need to be given some level of autonomy to make decisions swiftly. The study reveals ICK
International practices bureaucratic management style that sometimes causes delays in critical
decision making.

The study final ascertained the impact of warehouse management system on ICKs service
delivery. Majority of respondents noted client satisfaction is the greatest outcome of implement a
warehouse management system. Others also noted that incidents of theft and time wasting have
drastically reduced.

5.3 Conclusions
Effective inventory management is upheld to be a prospective driver for augmenting profit
margins. Minimizing total inventory of cost through identifying an optimum level of inventory
that an organization holds is the way forward. A well-functioning inventories management will
bring both economic benefits in terms of profitability and bring a good image to the company. It
will enable the company to undertake projects on time and bring out quality finished products of
the company. When a company implements effective inventories management systems, the firms
efficiency is enhanced. This has an impact on the level of performance in terms of turnover,
growth, management and ultimately profitability as purported by previous studies by Oballah et
al. (2015), Anichebe and Agu (2013) and Ogbo et al. (2014).

This study sought to investigate the inventory management practices on healthcare service
delivery. It can be concluded from the study that ICK International has been practising inventory
management. However, its effectiveness and how those practices were adhered to by management
and staff were somehow with some challenges. Therefore, pragmatic measures should be put in
place to curb such challenges to ensure effective and efficient inventory control in healthcare
institutions.

5.4 Recommendations
There should be the use of an integrated information system by ICK International to connect and
distribute projects related information particularly between staffs in the organization, or that links
the company with its suppliers. To this ends, the adoption of enabling technologies such as a
Logistics Information System (LIS), often in the form of Electronic Data Interchange (EDI) or
Value Added Network (VAN) or the internet are desirable so that different parties in the supply

32
chain can gain access to the needed information for decision making, thereby meeting the market
requirements responsively.

Improvement of demand forecasting should be the basis for the company to plan their internal
operations and to cooperate with departments to meet market demand. These should define which
products will be required, what amount of these products would be called for, and when they will
be needed. All forecasting must deal with four major variables that combine to determine what the
market condition will be like. Those variables are demand, supply, product characteristics and
competitive environment.

There should be an improvement of relationships with suppliers. The most important purchasing
activity is to select and keep close relationships with several reliable and high-quality suppliers in
order to reduce product cost, maintain good product quality and customer services. ICK
International should improve relationships with their suppliers by paying them on time, ensuring
early placement of orders, free flow of information, and also being honest with them. This is
because it was discovered from the study that some of the suppliers were reluctant to supply
materials when orders are made in situations where the company is indebted to them.

33
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 Appendix

GIMPA GRADUATE SCHOOL - MASTERS IN BUSINESS

ADMINISTRATION

QUESTIONNAIRE - TAX COLLECTOR

Dear Respondent,
As part of the degree requirement for the Masters in Business Administration at GIMPA, I am to
collect data for my research project on the topic: the challenges and prospects of warehouse
management systems and its effect on performance of an organization. The exercise is
basically academic and your responses will be treated with the utmost confidentiality they deserve.

Your maximum co-operation is highly anticipated.

Section A:

Please tick (), in the appropriate box and provide comments where necessary.

1. Gender: Female ( ) Male ( )

2. Level of Education: Professional ICA/ACCA/CIMA/CIA ( ) Masters MSc/MBA/EMBA ( )

Bachelors BSc/BED/BBA/BA/HND ( ) Diploma ( ) Secondary ( )

3. Employment Status: Fulltime Employee ( ) Part-Time/ Contract ( )

4. Years of work experience: 1-5years ( ) 6-10years ( ) 11-15years ( ) 16+years ( )

5. What is department do you work ?.........................................................................

Section B

Please state the extent to which you agree or disagree with the following statements. The rst
answer that comes into your mind is usually the best!

37
 1= Yes 2= Neutral 3= No USE FREQ TABLE

1 2 3
Ick International Operates of Just-In-time (JIT)

Agreements with the supplier for short cycle deliveries

Accurate prediction of supplier delivery dates

Operation of materials Requirements planning system (MRP)

Little or no Expediting

Strategic Supplier Partnership

Involving suppliers early in product design process
Use of suppliers to manage inventory on behalf of the organization
Use of fewer suppliers as opposed to many suppliers.
Frequent meetings between ICK International inventory staff and the
suppliers
Complete information sharing between ICK International and its suppliers
Proper communication between ICK International and suppliers
Long-term agreements between ICK International and its suppliers
Use of Information Technology

ICK International has computerized all inventory management system

ICK International uses Electronic Data Interchange Technology (EDI)
ICK International are electronically linked with suppliers in a real-time
environment

Relationship between Warehouse Management System and Organizational Performance

Increased Customer Satisfaction

Employee Job Satisfaction Increased

Save Time and Money

38
Better Balanced Inventory

Improved Security

Improved Supplier and Customer Relationships

Service delivery challenges of ICK International

Economic

Environmental

Regulatory

Management

Impact of Warehouse Management system on Service Delivery

theft

Time Bound

Client Satisfaction

39