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INVENTORY MANAGEMENT, MANAGERIAL COMPETENCE AND ORGANIZATIONAL PERFORMANCE OF MANUFACTURING FIRMS IN MBARARA CITY, UGANDA (issue 8)

The research on the relationship between inventory management, employee competence and organizational
performance of manufacturing firms in Mbarara City was guided by the following objectives; to establish the
relationship between inventory management and organizational performance of tea factory firms, to establish the
relationship between employee competence and organizational performance of tea factory firms and to establish the
relationship between inventory management, employee competence and organizational performance of tea factory
firms. The study adopted a cross sectional research design which involved collection of data on different variable from
the same place at one point in time. The design was used to collect data on the role of inventory management, employee
competence and Performance of manufacturing firms in a short period of time. A sample size is the representative
number of respondents chosen from the entire study population. The sample size was determined based on Yamane
(1967) and 133 respondents were determined. Findings showed that inventory management has a positive significant
relationship with organizational performance of manufacturing firms. This means that improvement in ways of
managing inventory in terms of using economic order quantity and always better control, it will result into
improvement in efficiency and effectiveness of the employees which leads to improvement in performance of the
manufacturing firms. Relatedly, the findings indicate that employee competence has a positive significant relationship
with organizational performance of manufacturing firms, this means that when organizations invest in recruiting well
experience workers and workers with right qualification, it will result in into reduced with cost of production and it
will enable to manufacturing firms that meet the demands of their clients and this will increase on the performance of
organization and lastly findings also indicated that the two variables are significant predictors of organizational
performance since a unit increase any of the independent variables will result in to a significant positive change in
organizational performance. Hence there is need to improve on the two variables since they are significant predictors
of dependent variables. The indicated that, inventory management and employee competence explain 49.3%
(Adjusted R square=.493) of the variations in the organizational performance of manufacturing firms. This further
means that the remaining 50.7% is explained by other variables not considered in this study. Therefore, based on the
findings, manufacturing firms need to invest a lot of time in ensuring that different stock items are managed well since
not all items have equal contribution to production. This can help to control costs relating to stock and proper allocation
of limited funds available in a productive manner that affects the company’s performance. Employee competence is
much important in the running of a manufacturing company, thus the qualification and experience of work force is to
important such that good quality and timely production is achieved and this will bring about improved organizational
performance.

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