The research was guided by the following objective; to establish the relationship between inventory management and organizational performance of manufacturing 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 of 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. 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.