MARCH 2011


DECLARATION Declaration by the Student This research project is my original work and has not been presented to any other examination body. No part of this work should be reproduced without my consent or that of Kenya Institute of Management

Name: Susan Waitherero Mumbi MSA/DPSM/ 01910



Declaration by Supervisor This project has been submitted for defense with my approval as the Kenya Institute of Management Lecturer.

Name: --------------------------------Lecturer Supervising

.Signature------------------- Date--------------

For and on behalf of the Kenya Institute of Management Name………………………….Signature----------------------Date--------------Branch Manager


DEDICATION This research project dedicated to my family members who encouraged and supported my course. Again to my close friends, as a token of appreciation for their support, patience and understanding throughout the duration of this course. To you all I say thank you.


ACKNOWLEDGEMENT First I give thanks to God for giving me strength and divine wisdom throughout my time of study. I give thanks also to the Kenya Institute of Management for according me such an opportunity to train and develop managerial skills with them. Thanks to all those lecturers who were involved in developing and shaping my destiny. Special thanks to my lecturers, my researcher supervisor Mr. J. Mwangeka for his unlimited guidance throughout the time of this research. Last but not least, I would like to thank my parents, brothers and sisters for without their encouragement and support, I would not have completed this study. Finally, I thank the entire management and staff of Kenyatta National Hospital for allowing me to use their company as the case study.


ABSTRACT The purpose of the study was to investigate the effects of information technology on inventory management in health care organization in Kenya with specific reference to Kenyatta National Hospital. The objectives of the study were to: determine the effect of quality control in inventory management. Examine the contribution of customer satisfaction in inventory management, examine the contribution of better data processing in inventory management and establish the effect of reduction of operations cost in inventory management. A descriptive research design was adopted in the study. The researcher used descriptive research design as it is the most applicable as the problem has been defined specifically. Stratified random sampling was employed to select a sample size of 60 respondents from a target population of 6000 respondents. Stratified random sampling was used during sampling as it was very appropriate since it is not biased hence it gave every member of the population an equal chance to participate in the research study. The researcher used questionnaires to collect data. The questionnaires were designed and pre-tested to determine the validity and reliability before being used in the actual study. The findings of the study were; quality control was good and closely monitored by the management at all stages thus ensuring efficiency and effectiveness of services. Better data processing improved inventory management due to computerization. Improved documentation was an indication of proper inventory management that resulted from customer satisfaction and management needs to check and follow up operation costs so that goods supplied are of the right quality, quantity and price. The research recommendations were; any defects should be monitored and corrected on the spot and set quality standards in the organization. Customer satisfaction should be guaranteed by all health care institutions. Abolish use of manual data processing and should have backups for better data processing and organizations should lower they operations cost in order to survive in the current competitive business world. Further study to be done in similar area to cover other factors and how to assist implementing of strategic methods or techniques in inventory control management.




read only memory Mombasa Diploma in Purchasing and Supplies Management Permanent Data Formatting viii .LIST OF ABBREVIATIONS KNH LPO KIM ISO ICT IT MOH WIP JIT TQM KEBS MSA EDI CD-ROM MSA DPSM PDF Kenyatta National Hospital Local Purchase Order Kenya Institute of Management International Organization of Standardization Information Communication Technology Information Technology Ministry of Health Work-in-progress Just –in-time Total Quality Management Kenya Bureau of Standards Mombasa Electronic Data Interchange Compact Disc .

OPERATIONAL DEFINITION OF TERMS Management This is the process. develop and effectively release the potentials of employees for the benefit of both the organization and the individual workers Quality Quality is a function of excellence value or grade as determined over a period of time by society generally or by designated bodies in specialized fields. A raw material is something that is acted upon or used by or by human labor or for use as a building material to create some product or structure ix . by which organization managers identify. Suppliers Suppliers are individuals or businesses that provide goods or services to vendors in return for the agreed upon compensation Information Technology Raw Material its use of microelectronics based combination of computing and telecommunications.

textual and numeric information by a microelectronics based combination of computing and telecommunications. processing. 1 . pictorial. limitations and the scope in that order. research questions. significance of the study.CHAPTER ONE INTRODUCTION OF THE STUDY Introduction This chapter contains background of the study. Change of technology can render some product/ service obsolete. statement of the problem. while telecommunications is concerned with the transmission of information over distances by such means as electronic signals. According to John (2004) the much heralded "information age" has arrived swiftly. He further said that the use of information technology collaboration with supply chain partner to design new business models with great response to customers demand. (Lysons 1996). objectives of the study. Technology is the most dramatic force that is now shaping the destiny of business. applying sequence of process to the data and applying the results of these processes. The major components of IT are therefore computer and telecommunication. light signals a long optical or by radio waves. He argues that information department had transitioned from a back office support function to an integral planning mechanisms for designing what must be E-supply and E-business model that will ensure future viability for the firm and its position in value chain. A research was carried on how information technology had brought enormous offer on every aspect of business James (2006). Computer is a device which is capable of automatically accepting data. a long conductor. Background of the Study Information Technology is defined as the acquisitions. He added that in today’s environment new Etechnology software appears virtually overnight and begin attracting traditional companies that have been late in developing a cyber channel of customers response. storage and dissemination of vocal.

Inventory control is a technique required to maintain work in progress and finished products. improve on the corporate cash flow and return on investment. quicker innovation should be exercised. work-in-progress (WIP) and finished stock that are kept or stored for use as the need arises. and if he happens to notice that some items are out of stock. when to order and how many to order. and this can be done by establishing two factors. delays cash flow and accelerates loss of customers. organizations need to manage inventory in a cost effective manner.new processes and new procedures. These process changes are accompanied by an exiting explosion of high tech products. In order to achieve this. Such kind of inventory control is very expensive to the company and it causes stock outs that brings loses of sales.New technology replaces an older technology in order for efficiency to be attained. Technological development affect information communication technology (ICT) into two ways:. a method where a manager stands in the middle of the store looks around. Inventories are stock of materials of any kind stored for future use. According to McCathy. they are ordered. components. (Lysons 1996) Lack of comprehensive inventory control management technique often causes customer levels to drop hence failing the programmes Lyson (2000). technical skills and equipments which affect the economic resources which are converted into output. Therefore in order to satisfy customers and to achieve the corporate objectives. American Accounting term refers to inventory as the value or quantity of raw material. (1994) underlying any economic environment is its technological base. therefore the general objective of inventory control is to maintain stock levels so that the combined costs are at minimum. Computers also allow more sophisticated planning and control. increases backorder costs. assemblies. materials manager must migrate from the methods of “eyeball inventory control” that is. consumables. Inventory planning is therefore a critical operation which needs better management in order to 2 .

just-in-time (JIT) purchasing is an inventory control whose goal is to maintain just enough materials in just the right place on just the right amount of product. The approaches include continuous review of excess and obsolete inventory. It originated in Japan in 1950s. When inventory moves so fast that firms. Material requirement. they follow the system known as lean supply chain which is a combination of JIT transportation. According to Lysons (1996). which involves evaluating inventory status on regular basis. inventory control is defined as the techniques used to ensure those stocks of raw material or other supplies work-in-progress and finished goods are kept at levels which provide maximum service levels at minimum cost. In order to keep abreast of changing conditions after stock levels have been established. MRP is an approach to stocks and scheduling that is widely used in situations where demand is 3 . All three elements combined to create supply chain that minimizes inventory investment and eliminates wastes. fast detection and correction of unsatisfactory quality and reduced inventory of purchased parts.According to Lysons (1996). It aims at synchronizing ordering and delivery between the purchase and the supplier to the advantage of each to overcome material shortages due to emergencies and late delivering. JIT system does not tolerate high inventory levels. stock should be carefully reviewed at suitable intervals to ensure the system of stock control is not rendered ineffective (David 1994). essentially hold zero inventory on hand. this minimizes inventory and maintain delivery schedules Kenneth (1996). dependent. as he observed the benefits of JIT as low inventory costs. raw materials and finished goods. The approach ensures that items are available when wanted and not before. planning approach (MRP) is a product oriented computerized technique carried at minimizing inventory and maintaining delivery schedules.

It is suggested that is not appropriate to be highly concerned with control of category C items because they are many and trivial from the financial point of view. being two categories of stock into a series of three categories widely employed. ABC analysis/pareto analysis approach. Category A items are small in number. JIT is a “pull” system in the sense that replenishment is triggered only when the a mount available reaches a certain level and stock is pulled through the system only when needed. Table 1:1 ABS Analysis of Inventory Category (usage) A. ABC analysis is simply the refinement of the idea of the. approximately segmented in the proportions as below. low usage value and many. high in usage value and needs high control. Moderate value C. Category C is high in number. while the percentages will vary between organizations. Low value Approximate % of inventory Approximate % of usage value 10 30 60 60 30 10 Inventory will be Source: Lysons (1996) It is further stared that tight control should be exercised over category A and possible B and less to category C. JIT is based on elimination of waste where possible. 4 . medium usage value and needs moderate control. High value B. Lyson (1996) states that ABC analysis is the application to stock that majority of inventory value will be represented by relatively few items.According to David (1994). Category B is medium in number.

unprocessed state waiting conversion into a product. Inventory is grouped as: finished goods which are ready for dispatch. stock that are held. Work-in-progress – materials in a pay finished or partially assembled state are held. that is all supplies in an undertaking that are classified as indirect and which do not form part of a saleable product. that is. Analysis is based on acquisition costs. seasonal stocks . placement costs and post placement costs. The economics of inventory management is determined by an analysis of the cost incurred in obtaining and carrying inventories. Raw materials. consumables. Support inventories for example. The inventories are routine inventory. 5 . that is. well regulated have small stocks of materials. buffer stock – these stocks are held on ‘just in case basis’ are intended to be draw upon if anything goes wrong with the proper control of the routine stocks. primary inventory that is raw materials work in progress and finished goods. it varies with the complexity of the order and seniority of staff involved. Acquisition costs analyses imply some costs in ordering irrespective of the quantity of orders. insurance inventory – these are items usually of a high value or long lead time or both which are held incase some breakdown occurs which can only be remedied by calling these materials rapidly in use. In practice. danger level and maximum stock level. holding cost and cost of stock outs. this includes preliminary costs.The action level approach according to David (1994). They include: minimum stock level. reorder level. which are of no use to the organizations. replenished and depleted in the normal course of business.these are held over and above normal stocks to cope with expected higher demand at certain and redundant stocks – most organizations however. the basic method of controlling stock quantity is by means of fixing each commodity stock levels that are recorded in the stock control system and subsequently used as a means of indicating when some action is necessary.

the stock controller must consider: availability of supplies determined by delivery period taken by the supplier. It comprises of costs of idle time and fixed overheads spread over a reduced out put. price discounts for quantities which influences the quantity purchased. David etal (1994) had the usually approach to the control of inventory as the control of inputs to the stores. which are costs. These costs include. Other costs including packing costs and transportation costs and Carrying costs. rate of issue based on meeting the practical needs of the operating functions. unit of issue. the geographical location of the source of supply or nature of the material affects the size and frequency of deliveries. connected with acquiring materials. Quality coast. Irrespective of the inventory control employed. Unit costs which is the price a firm pays for spare parts ordered. cost of storage and cost of obsolescence. Ordering costs. probable requirements for future consumption indicated by past performance. If we hold excessive inventory. then founds are tied up unnecessarily which could have been used more productively elsewhere. which reflect cost of capital. allocations where specific quantities of stock are set aside for special jobs or capital projects. which helps to identify the causes of problems. frequency of delivery that is.whether order preparation is manual or computerized and whether repeat orders cost less than initial order. these should be expressed in annual figures to ensure compatibilities with acquisition and holding costs. deterioration and loss. Cost of stock outs is the cost of being out of inventory. Where the costs of individual stocks outs are computed. Holding costs are costs related to the value of inventory and costs proportional to the physical characteristic of inventory. Monczka etal (2002) reasoned that one of the draw backs of holding excessive inventory is the effect it has on a firm’s working capital. this most be taken into account when controlling the amount n stock if the materials are also used for other purposes and cost 6 . which should be employed consistently in ordering and provisioning procedures.

The national hospital is the Moi Teaching and referral Hospital in Eldoret. experience and creativity. To provide facilities for education and training in nursing and other health and allied professions and to participate. To provide facilities for medical education for the University of Nairobi and for research either directly. Building competence in supplier relationship is about developing supplier’s skills. Management is the principal activity financial and physical resources to learn and acquire ability to translate knowledge into that makes a difference in how well organization serve people affected by them. It is currently the largest National referral. How successful an organization an organization achieves its objectives and satisfies social responsibilities as well as how an organization will probably achieve its goal. Management is a set of activities directed at the efficient and effective utilization of resources in the pursuit of one or more goals. Trustworthiness as we see it primarily stems from ethical and consistent organizational behavior. According to the legal Notice the function of the hospital were stated as follows: To receive patients on referral from other hospital or institution within or outside Kenya for specialized health care.of ordering – items should be ordered in sufficiently large quantities to avoid unreasonable expense in preparing large number of small orders. 7 . as a national referral hospital in national health planning. 23 of 10th April 1987) Kenyatta National Hospital was established as a state corporation under the State Corporation Act. performance to be superior in the relevant field.109 (Kenya Gazette Supplement No. KNH has a board with a responsibility of administration management and development of the hospital. Following the KNH Board Order of 1987 contained in the legal Notice No. Profile of Kenyatta National Hospital Kenyatta National Hospital (KNH) is the oldest hospital in the country founded in 1901 as the Native Civil hospital and then King George VI in 1952. teaching and research hospital. Management is working with human. or through other cooperating health institutions.

Radiology/Imaging and Endoscopy among other specialized services. or to be admitted. at any given day the Hospital hosts in its wards between 2500 and 3000 patients. hospital materials. the Kenya Medical Training College. There have been complains on how patients are kept waiting on the queues for very long time close to four hours either to see the doctor. as well as to provide medical research environment. This is because of inefficiency in inventory management hence causing unnecessary delay in the hospital operations. 20 out-patient clinics.000 out-patients annually. equipments. The average bed occupancy rate goes to 300%. 225 beds are for the Private Wing. KNH has 50 wards. The Hospital was built to fulfill the role of being a National Referral and Teaching Hospital. It covers an area of 45. Statement of the Problem Kenyatta National Hospital the largest referral hospital where most patients from different parts of Kenya are referred to incase of any complications is faced with inventory management problems.The board comprises 11 members and the Hospital Director is the secretary of the board. According to procurement records. In addition. or to be given drugs (Mboya 2008). KNH has turned 104 years and it had its Centenary Celebration in 2001. On average the Hospital caters for over 95. Out of the total bed capacity of 1800.000 inpatients and over 600. The hospital offers a wide range of diagnostic services such as Laboratories. 8 . were never received in good time. There is a Doctors Plaza consisting of 60 suites for various consultant specialties. 24 theatres (16 specialized) and Accident & Emergency Department. delivery and supply of products such as drugs.7 hectares and within the KNH complex are College of Health Sciences (University of Nairobi). Kenya Medical Research Institute and National Laboratory Service (Ministry of Health – MOH). The committees are: Finance/Tender Board Committee. KNH became a State Corporation in 1987 with a Board of Management and is at the apex of the referral system in the Health Sector in Kenya. Maintenance and Development Committee and Establishment Committee. Established in 1901 with a bed capacity of 40.

2 Specific Objectives of the Study The study aimed (i) (ii) (iii) (iv) To determine the effect of quality control on inventory management in To examine the contribution of customer satisfaction on inventory To establish the contribution of data processing on inventory management To assess the effect of reduction of operations cost on inventory healthcare organizations in Kenya. there are still some drawbacks. Objectives of the Study General Objective The general purpose of the study was to investigate the effects of information technology on inventory management in healthcare organizations in Kenya. It is therefore as a result of these drawbacks (quality control.On the other hand. 1.4. frequent emergencies caused by road or fire accidents can not be ignored as doctors have to attend to emergencies first thus making process even more worse. Although efforts have been made to ensure effective inventory management through use of information technology process in the hospital is upheld. management in healthcare organizations in Kenya. management in healthcare organizations in Kenya. in healthcare organizations in Kenya. customer satisfaction. 9 . better data processing and reduction of operation costs) that this study will try to investigate how they affect inventory management process in public sector in Kenya.

10 . The study has highlighted a full description of these factors. this will make it possible to pinpoint the crucial areas that need much attention when executing public procurement activities. Procurement Team The study will have a great impact towards creating foundation for development of effective procurement strategies that will help the procurement team in carrying out their daily activities.Research Questions The study answered the following questions:(i) (ii) (iii) (iv) To what extent does quality control affect inventory management in healthcare organizations in Kenya? How does customer satisfaction affect inventory management in healthcare organizations in Kenya? What is the effect of data processing in inventory management in healthcare organizations in Kenya? How does reduction of operations cost affect inventory management in healthcare organizations in Kenya? Significance of the Study Organizations The study is of great significance to the various institutions since has established the major challenges facing procurement officers in today’s organization. their causes and how they affect procedures. Procurement officers will know how to handle the challenges facing them therefore will lead to effective planning and running of the organization. this will influence government organizations to effectively implement appropriate solution that will eliminate the most of organization procurement practices.

As a result. This will lead to development of further research activities that will address other factors that will not be addressed by this study and hence providing more effective solutions to effectively handle procurement challenges. Scholars and Research Students The study is also of great significance to various scholars. Limitations of the Study Uncooperative Respondent Cases of uncooperative respondents were experienced by the researcher and this affected achievement of a high response rate. the documented report of this study will be easily acquired from the library and it will equip the learners with more knowledge and skills on problems facing the procurement in today’s organization. students and researchers who might be involved in procurement research activities. it led to a number of questionnaires not being returned from some of the respondents who failed to voluntarily participate in answering of the questionnaires. researcher was forced to engage the respondents in a brief interview to let them know the importance of this study as a strategy to avoid lack of cooperation.The General Public The study is of great significance to the general public since it explains the pros and cons of information technology on inventory management to the procurement in organizations. 11 . To this effect. Unnecessary delays affecting the procurement officers and those factors that have been creating pressure to the other organization departments will now be dealt with amicably.

from subordinates staff. The hospital is situated in the western part of Nairobi city. The researcher assured the respondents of the confidentiality of the information to fight the fear in them. customer satisfaction.Confidentiality and Sensitivity Confidentiality and sensitivity of the study posed a major limitation since most of the respondents were barred by the organization confidentiality policy to expose some of the internal organization matters.5 kilometers from city centre. operators. Doctors. off Ngong Road. 1. better data processing and reduction of operation costs. cleaners. 1. reliable and accurate findings. KNH headquarters has a staff population of 6. The research was carried out at Kenyatta National Hospital organization headquarters. nurses. Opinions and Biasness The individuals who were involved in answering the questionnaires answered the questions based from their opinions but not from the existing facts in the organization. This made some of the respondents to be biased.000 employees. 12 . assistant and the top management. The respondent also feared that the findings might be used as a weapon to terminate their employment contracts. These employees fall in various categories. The researcher therefore had to employ qualitative techniques to select and document. This study took a period of four months effective December2010 March 2011 to complete the entire research work.8 Scope of the Study The study was limited to the study of inventory management of the organization in relation to quality control.

freedom from defects or contamination. as is the case when selecting suppliers. Quality is the result of a comparison between what was required and what was provided. quality is a degree of excellence: the extent to which something is fit for its purpose. In quality management.CHAPTER TWO LITERATURE REVIEW 2. Quality has different meanings depending on the product and also to different people.2 Review of Past Studies 2. or an output.2. The judgment can be made of an intention. All those planned and systematic action necessary to provide adequate confidence that a product or service will satisfy given requirements for quality. may it be a product or service has to do with psychological expectation of the users/consumers towards performance or achievements of the desired results. It is judged not by the producer but by the receiver. better data processing and reduction of operations costs.1 Quality Control In its broadest sense. As defined in ISO 9000:2000 it is part of quality management system focused on providing confidence that quality requirements will be fulfilled. Extension literature has been reviewed on specific objectives of quality control. Against this background there must be knowledge of the expected results against some benchmark. as is the case when purchasing a product or service. In the narrow sense. product or service quality is defined as conformance with requirement. 2. It is a criminal offence under 13 . The concept of Quality on anything. customer satisfaction. or simply a degree of customer satisfaction.1 Introduction This chapter contains a reviewed literature on effects of information technology on inventory management. quality according to (ISO 9000:2000) is degree to which inherent characteristics fulfills requirements.

According to Sorrensed (1980) quality is whatever customers expect to be and what they say it is. Since the waste is inherent it proves that the operating system are unable to get rid of it instead they carry out quality control to keep the waste from getting worse. Responsibility of operation is to run the quality process at optimal effectiveness to meet quality goals under operating conditions. However due to deficiencies in the original plan the process fails to achieve the optimal point leading to chronic waste. They take an external view of quality as compared to traditional western internal view.The Standards Act. process or service. He proposes that a compromise in quality results in heavy losses for the company. Cap 496 of the Laws of Kenya. (1995) “as a pervasive part of business thinking as quarterly financial results and yet TQM`s role as a strategic resource remains virtually unexamined in strategic management research. 14 . Organizations practicing TQM have a long-term commitment to quality and consider quality to be core value of the organization. Soaners and Angus (2004) stated that quality is a degree or grade of excellent or worth. Total quality management (TQM) as mentioned by Thomas (1995). This article examines TQM as a potential source of sustainable competitive advantage reviews existing empirical evidence and reports findings from a new empirical evidence study of TQM performance consequences. to display the Diamond Mark of Quality without a current and valid permit issued by KEBS. Usually quality control is essentially the activities and techniques employed to achieve and maintain the quality of a product. A product or a service that fails to meet this will cost the company in terms of repair cost or making amendments to the product and the company will add the cost of making amendments to the customers. Drawing on the resource approach and other theoretical perspectives. it is any kind of property that exists as magnitude or multitude. According to Strategic Management Journal Volume 16. is where there is a defined culture of quality awareness and quality improvement in every department and at every level in the organization.

process improvement and benchmarking do not generally produce advantage but that certain tact. The third strategy is to reduce product quality through time. There are diminishing returns to ever increasing performance. imitable. cultures such as open culture. employee empowerment and executive commitment can produce advantage. Three strategies available: the first where the manufacturers continuously improve the product often produces the highest returns and market share. imperfectly. average. behavioral. A company must also manage performance quality through time. some companies cut quality to offset rising costs while others reduce quality deliberately in order to increase current profits although this course or action often hurts long run profitability (Cole 1996). Quality link to profitability does not mean that the firm should design the highest performance level possible. more quality were not much higher than for business units producing low quality (Kotler 2000). The author concludes that these task resources and non TQM and techniques drive TQM success and organizations that acquire them can out perform competitors with or without accompanying TQM ideology. Many companies leave their quality unaltered at its initial formulation unless glaring faults or opportunities occur. The important question then is whether offering higher product performance can produce higher profitability. The manufacturers must design a performance level appropriate to the target market and competitor’s performance levels.The findings suggest that most features generally associated with TQM such as quality training. As stated by Lucey (1995). high or superior. most products are established as of four performance levels: low. The strategic planning institute studied the effect of higher relative product quality premium price. they benefit from more repeat purchasing. Performance quality refers to the level at which the products primary characteristics operate. 15 . consumer loyalty and positive word of mouth and their cost of delivery. The second strategy is to maintain product quality at a given level.

They believe that a higher sales volume will lead to lower unit costs and higher long run profit. They may focus on the product and quality. Suppliers’ quality control system reduces the buyers inspection cost and his confidence in the reliability of the supplier increases. It emphases on quality assurance where defect prevention through putting in place quality systems that will ensure quality products are produced. Thus it has to do with defect detection and correction achievable through inspections and setting quality standards at the design stage. Market share has been used to describe and analyze an industry and the participants therein. Market share analysis evaluates a company’s performance in comparison to that of its competitors. Datta (2006). It uses a series of inspections and tests to check that the planned quality is actually achieved hence emphazing on controlling after occurrence. According to Sorenson (1950) quality control benefits the organization in several ways. This is why outcomes should be compared to marketing objectives and performance standards (Jobber 2007) Some companies want to maximize their market share. This gives a customer a guarantee of quality be measuring product conformance with process and performance specifications (Martin 1990). It should be recognized that a market share decline is not always a symptoms of poor performance. Standardization plays an important role.Quality control involves monitoring to ensure that defects or potential defects are spotted. Sales analysis may show a healthy increase in revenues but this may be due to market growth rather than can improved performance over competitors. Quality products enable the organization gain popularity and large market share. These can be specific or broad measures. Goodwill of both vendor and purchaser goes high as there are fewer difficulties and problems in the market for the quality product and sometimes inspection at the purchaser’s end is eliminated if with each consignment the vendor certificate and statistical data regarding the quality of supply is enclosed. 16 . Minimum possible rejection and wider acceptance of the supply is made possible by good and effective quality control system.

it is clear that. and number of customer complaints Irrespective of the system of stock control in use. The possibility of running out of stock may also be greater. then the risk of being out of stock will be dismissed and the cost of acquisition will also be reduced (Jessop 1994).1 Optimum ordering quantities Cost of storage ¦ ¦ ¦ EOQ Source: Jessop (1994) Quantity Ordered Cost of ordering Cost 17 . if large quantities are ordered on an infrequent basis. These costs will be offered by the higher average investment in stock leading to greater stock hold costs. then stock holding costs will be reduced while ordering or acquisition costs rise. an optimum order quantity is set to be ordered after a certain period of time.Such as performance data versus specifications. To reduce ordering costs due to frequent ordering and minimize stock holding costs due to large quantities being ordered. This solves the problem of understocking and overstocking Figure 2. Jessop (1994). percentage of product returns. went further and said that if a policy of ordering ‘little and often is adopted.

The scholar focuses on the importance of providing superior customer service and royalties and their earning indefinitely. from the chief executive. This commitment must begin at the top i.2. expectations for now and the future. This means knowing their likes and dislikes in regards to the business. chairman or the owner. Quality customer service is however what the customer perceives as quality before one can measure how well they are providing customer service. He further says that everything possible must be done to know your customers intimately and to understand them totally.2. The concept of customer service and care defines the link between sales. service and satisfaction. A customer is satisfied when his or her needs. retain them and make them loyal should conform to the standardization set. what motivates them to buy or change in suppliers and what you must do to satisfy them. The organization should identify the strengths and 18 . Sorrensed (1950). Customer problems. Roots of common problems and complaints are removed and the system actually improves in the process. their needs. Managing director. He recommends asking customers what they want at all times thus fulfilling their expectations. This will only succeed when there is total management commitment. one needs to have a customer system in place. as observed by Martin (1990) should be turned into opportunities for customer care. They must develop and communicate a clear vision of what the service quality is going to be and how it will be implemented.2 Customer Satisfaction According to Gearson (1993). he said that all things done to achieve excellent quality and services are unimportant if the customer is not satisfied. He defines the customers’ satisfaction as the perception that his or her expectations have been surpassed. their wants. Customer service quality performance results in customer satisfaction and loyalty could be provided by competent qualified staff therefore once hired they should be trained extensively to provide superior customer service. real or perceived are met or exceeded. The changes they may want you to make.e.

Management should carefully analyze these factors when a competitive strategy is being formulated with a mind of meeting ISO standards. He went further with strategies that he called generic strategies that tend to insulate firms from damaging effects of the competitive forces. Each firm has a collection of activities performed to design. outbound logistics. These strategies are viewed as general approaches to out perform competitors in any company and to enable the industry to compete internally. As proposed by Sorrensed (1950). Value chain is a tool used to create more customer value. marketing and sales and services. for customers to be satisfied one has to solve their queries courteously and promptly. The support activities include procurement. and market. threats of new entrants.weakness in the purchasing and supply system. human resource and firms’ infrastructure for all these activities to succeed there should be co-ordination between departments hence creating an enabling environment for acquisition of the ISO 9000 series certificate. 19 . produce. The four forces highlighted in the model are rivalry among existing firms. Porter (1996) points out that the key success strategy is to develop a position that is invulnerable to attack from these factors as much as possible. He came up with a model that identifies the forces that determine the intensity of competition in a given company and therefore profit potential. deliver and performs the firms products. Primary activities include inbound logistics operations. chain and supply chain. it should also describe exactly how customers would be treated. To him the issue of company attitude towards the customer is the key. According to Porter (1996). He proposes that the company should make promises it can keep because the more promises it keeps the more the customers accept. threat of substitute products and the bargaining power of the supplier. he developed a powerful framework for analyzing both private and public institutions and formulating appropriate competitive strategies. It has the five primary activities and four support activities. Kottler (2001) suggests that in order to produce and deliver customer satisfaction two concepts must be in place that is the value. technology development.

3 Data Processing Data processing is how raw information is manipulated in order to produce a result. preparation of the collected data for processing. group and segment of the product line or service line area whereas the low cost and differentiation strategies aim at achieving fewer goals that meet the local standards in terms of operations. These include collection of the data. The success of a business depends on how the volumes of data generated are handled and interpreted. According to Baker (1989). which takes into account both objective and subjective interpretations of the needs and expectations of customers. he ranked the critical success to product factors influencing competitiveness as.2. Data processing is a very essential aspect of businesses all over the world. 2. reliability and sales price. Focus is whereby a company pays attention to specific market segments. The only true measure of acceptable quality is customer satisfaction. There are six stages of data processing. data input. 20 . financing and other things that people value hence enabling the company meet the determinants of acquisition of ISO series certificate. The bottom line is that the firm can serve a limited market more efficiently than those companies that are competing more broadly. If customers are satisfied with the products and services offered. performance in purchasing. processing. He stated that the new competition is not between what companies produced in their company but between what they add to their company output in form of customer service. output and interpretation of the data and finally storage stage (Wingand 1995). operation. the organization has not only correctly interpreted customer needs and expectations but it is also providing products and services of acceptable quality. Company wide the focus or niche approach concentrates on servicing a more narrowly defined market. The result may lead a better understanding of a problem or a situation.Focus-this has to do with concentrating on specific buyer.

A lot money also goes into data collection. This is quite technical and if not well done. The importance of data processing is to provide information that will guide future company policies. Computers have made data processing at this stage very easy. For large companies. The volume of data that must be entered in a day is so huge that people have set up data entry companies for that purpose. Collecting data can be very time consuming and at certain time boring. That makes output very important. Data entry does not require much education. However. In that way. people had to do this. the results will not be valid. then comes the time for the processing itself. It is a simple process. There should be codes assigned to each type of response or phenomenon. or when they were not common. 21 . it should be prepared for processing. In today’s world. a lot of people are needed for several days to have this work done. This is the time various means and methods are used to manipulate the inputted data. many businesses are resorting to outsource for this purpose. Many software programs are available for processing large volumes of data within very short periods. The cost involves is so high and therefore. A click at a button is enough to produce the content. What is required is speed and accuracy (Wingand 1995). they save cost. In the past. It may involve travelling or having to sit for a long time. After the input is over.For the data to be available it should be collected. The data collected should therefore. computers are the main tools of data processing. with an advent of computers the process is now very easy. Raw data cannot be processed. be prepared for the computer. There are many others who are freelancing in this area. It was then a herculean task. After data is collected. It is a process that most employees will want to run away from. when computers were not available. Some are general while some are for specific industries and processes. The third stage is the input stage. This is another time consuming process in data processing.

publications. transmission (delivery to designated individuals. It is easy to use. to indicate the amount of stock of any item at any time without it being necessary for the stock to be counted physically. In electronic data processing. which is installed on practically every office computer. If the process is not stored. to establish a link between the physical stock and the stores accounts. add commentary. Jessop points out the following reasons for maintaining records. Even professional versions of Adobe Acrobat allow you to make only minimal changes to an already existing document (for example. The text processor Microsoft Word is the clear leader in the field of software used for the creation of documents. At the same time. etc. to supply information fro stock taking. For the first stage.) and storage. has long ago transformed into the de facto standard. fully featured editors for the creation of PDF files simply do not exist. Stock records are expected to maintain particulars of receipts. for all intents and purposes. to provide a method of information store house staff of the location of goods in the store house and to serve the purpose of price list. issues and balances remaining in stock for each individual item and in the store house from day to day.). and. Without interpretation the company does not benefit from the whole process (Wingand 1995). possesses a wide range of functions. The last stage in data processing is storage. 22 . This will enable it to be used another time. to provide a means of provisioning. there will not be a good ground for future comparison. According to Jessop (1994) the operation of the stores functions and the control of stock cannot be performed in an efficient manner without some means of capturing and storing information and a facility for the analysis and use of this information. The data inputted. the whole process of working with electronic documents can be divided into three basic stages – creation. it should be interpreted in a way that makes it useful for the company. to fill out a form. and the result of the process must be stored in a safe manner. the Word Document format has a definite advantage.When the output is available.

what software is installed for reading PDF files. A third advantage of the PDF format is that sending files to partners or clients is safe. however. they will be able to view. It is not important which computers are in the offices of your partners and which operating systems they are running. Frankly speaking. in order to receive a file in the PDF format. fourth advantage. In this regard. PDF has yet another. for the end user. Any person or any company can. documents created by Microsoft Word often become the carriers of various viruses. However. is platform independence. At the next stage. PDF has some advantage. and then after that convert it into PDF with the aid of some kind of software. and use if for working with electronic documents. This is especially convenient in the case of a one-way exchange of information. A second advantage of PDF is that the software for viewing files saved in this format is free. can always be downloaded from the Internet. The fact is. it is sometimes necessary to use built-in defense against unauthorized access. a new version. Therefore. 23 .In other words. you need to create it first in any other format. all the benefits turn out to be on the side of the PDF format. if the need arises. insofar as its specifications were investigated by many independent software developers and experts in the field of information security. It is not important. In any case. download the program Acrobat Reader from the Internet. Naturally. While using the Word Document format. The first benefit. absolutely free of charge. you need to take into account that this software is free. Let's examine these in more detail. the same problem with versions for reading format files applies to the PDF format as well. The PDF format is standardized by the ISO (International Organization for Standardization) for the archival storage of electronic documents and exchange of information between companies. it is better if both parties use the same version of software. print documents in precisely the needed form. of course. if necessary. In addition to this. this is not very convenient (O’Brian 2004). and. who confirmed the absence of vulnerabilities and backdoors (O’Brian 2004).

However. to choose any other technology and come to terms with its disadvantages. In such a way. and prior to sending them or submitting them to an archive. 24 . Yet. When new inventory was received. PDF is the most suitable format. of course. a very interesting situation is apparent.In addition.4 Reduction of Operation Cost In today’s competitive business reality. it is best to create documents in the Word Document format. incorrect shipments and large numbers of returns. which intends to promote it as the general international standard for the implementation of electronic data processing. On the one hand. the use of PDF technology for electronic data processing will be institutionalized worldwide. Having an un-automated warehouse resulted in poor inventory control. What they fail to realize is that having aging software will result in higher operating costs company-wide and excess inventory in the warehouse – meaning a decrease in bottom line profits (O’Brain 2004). The tools and technologies exist but a fear of change prevents some manufacturers. it is better to use a combined data processing approach: create files in the Word Document format. If this takes place. 2. distributors and retailers from making the cultural change that is needed to use a new technology to improve how their business operate. On the other hand. the storage of electronic documents. This allows one to enjoy all the pluses of both technologies and avoid their minuses (Turban 1994). remembering their past experiences and not want to incur new expenses. It is possible. shelves were consolidated and the computer records were not properly updated. many companies are reluctant to upgrade their computer system.2. for sending and storing such documents. which is highly likely. the representatives of Adobe have announced that they plan on sending the specifications of the latest version of its format to the Association for Information and Image Management (AIIM). convert them into PDF. companies must lower their operating costs and increase productivity just to survive. All these benefits of the PDF format are also relevant for the third stage of data processing.

25 . This increase operating cost yet with computerization. especially favoring smaller organizations. Automating the warehouse automatically leads to reducing operating costs and improving the company bottom line profit. the special features of the internet and the web based allow the development of interactive applications. When the warehouse is automated. consolidating shelves will be easier and more efficient as your ‘real-time’ computer files will reflect both the consolidated and new inventory location and quantity. Their success is a testimony to the ease with which the internet connects a large number of dispersed users. labour cost will be dramatically reduced. it gets scanned and verified confirming that the correct products and quantities are being shipped to the right customer. A growing number of internet based online auctions and bidding systems supports the negotiation phase by proving a simple negotiation mechanism confined to price alone. less shipping mistakes and returns will be made as picked inventory gets scanned for accuracy. Thirdly. the break even point in terms of transaction volume becomes lower. you can quickly reduce the size of your inventory management department or transfer them to other areas of the company where they are much more needed. enhanced by a graphical user interface with full multimedia support.This resulted in inventory being misplaced and new inventory being bought. Finally. you will be able to find misplaced inventory and prevent it from ‘collecting dust’. and thus enable the communication of complex information. Internet-based EDI links can be less costly than the traditional leased lines and value added services regard network access and data transmission. Another excellent way to lower your labour and operating costs and increase sales and the bottom-line profits is to effectively use the web (Sandoe 2001). As a result. the company ended with excess inventory that cannot be sold. Since automating your warehouse will create a more efficient and effective inventory environment. Fourthly. At the staging area before being packed again. operating cost are automatically reduced. As a result of these issues. Secondly. newly received inventory is scanned and computer files are updated in ‘real-time mode’ resulting in data instantly available to everyone company-wide.

search and place orders online. he did not mention the constraints in implementation of the system. such as the rich content of printed catalogs. poor record keeping affects inventory control as receipts or issues records are not kept therefore no indication of stock at any time which can lead to under stocking or overstocking Internet search engines help users find items by suing keywords supporting the information phase.3 Critical Review James (2006). Using computers to capture information and then kept in flash disc would make it easier for future retrieval or some information stored in pdf . Therefore. argued that the use of information technology has facilitated sharing of information and collaboration with supply chain partner. Jessop (1994) points out the following reasons for maintaining records. 2. The combine and extend many features of existing channels.According to Jessop (1994) the operation of the stores functions and the control of stock cannot be performed in an efficient manner without some means of capturing and storing information and a facility for the analysis and use of this information. in particular to find new sources or to fulfill unexpected requirements. Ayub (2005). issues and balances remaining in stock for each individual item and in the store house from day to day. the convenience and intimacy of on-line shopping and the sophisticated searching capability of CD-ROM catalogs. Ayub 26 . He explained that there is need for developing an E-supply and E-business model to ensure future viability of the firm and its position in the value chain. to provide a means of provisioning. to provide a method of information store house staff of the location of goods in the store house and to serve the purpose of price list. to indicate the amount of stock of any item at any time without it being necessary for the stock to be counted physically. to supply information fro stock taking. However. found out that data processing is made better by using computerized inventory management. Internet-based catalogs allow buying organizations to browse. Stock records are expected to maintain particulars of receipts. to establish a link between the physical stock and the stores accounts.

better data processing and reduction of operation costs to inventory management. 27 . it is clear that. The review came up clearly with effect of information technology on quality control. lead times should be well known and well scheduled after acceptance of the lead times by both the supplier and purchaser. He argued that the decision to enlarge a factory will be based on a forecast of increased demand for the product manufactured. Gordon (2004) highlighted that inventory control is a significant factor for management of inventory and resources and should therefore e considered as a strategic profession rather than an administrative action. 2. A lot of organization resources are always pumped in procurement services in order to achieve on time delivery hence a lot of emphasis should be considered when dealing with material specification to gain. It’s always important to achieve organizations goal through strategic planning of the organizations activities. Jessop (1994). customer satisfaction. the management should understand the key factors that affect inventory control function in an organization. Lysons (2006) points out that demand forecasting helps in planning and decision making in business. However.4 Summary From the literature review. Thus minimizing understocking and overstocking. Inventory management is one of most important activities in procurement operations that have been emphasized in the public sector.outlines that it was necessary that all organizations use computers for better data processing rather than the manual process of record keeping. inventory is replenished with predetermined quantity of stock every time the inventory falls to specific order level. argued that with fixed order quantities. the author stated that inventory control was being carried out by professionals without indicating how they can acquire skills and professional knowledge aimed at ensuring customer satisfaction is the bottom line.

It is also necessary to realize the importance of information technology in all the operations in the public sector more so in the health sectors. customer satisfaction. The schematic diagram provides the explanation concerning the variable relationship Figure 2. better data processing and reduction of operations costs as major factors that cause impact on inventory control. This makes retrieval of documents fast and reduces long queues.2 Conceptual Framework Independent variables Dependent variable Quality Control Customer Satisfaction Inventory Management in healthcare organizations in Kenya Data Processing Reduction of Operation Costs Source: Author (2011) 28 .5 Conceptual Framework This section provides an exploration framework concerning variable inter-relationships that explains the effect of information technology on inventory management. It identifies quality control. 2.

2. Quality control involves monitoring to ensure that defects or potential defects are spotted. And conformance quality is established by inspection. It involves a series of inspections and tests to check that the planned quality is actually being achieved where controlling after occurrence is emphasized. Quality is the worthiness that the customers get from the suppliers. expectations for now and the future. Quality is fitness for use.1 Reduction of Operation Costs Reduction of operation costs results when the warehouse is automated. their wants. data input. retain them and make them loyal should conform to the standardization set.Quality Control This is the measures at which customers are satisfied with the products and services provided by a company thus customers get value of their money. Suppliers are concerned with quality of design or specifications of the right material for the job and communication of the requirements to the supplier in a clear and unambiguous way hence performance quality. preparation of the collected data for processing. Data Processing Data processing includes collection of the data. It has to do with defect detection and correction achievable through inspection and setting quality standards at an early stage. newly received inventory is scanned and computer files are updated in ‘real-time mode’ resulting in data 29 . This is the value the customer feels subjectively and sometimes in the world of irrationally. processing. what motivates them to buy or change in suppliers and what you must do to satisfy them. The changes they may want you to make. Better data processing ensures that all stages are systematically followed to the letter with the help of computer based technology. their needs. output and interpretation of the data and finally storing of the data.5. This means knowing their likes and dislikes in regards to the business.

The research design and methodology that was used was well defined and the reasons as to why they were chosen in the study were elaborated in the course of the study. consolidating shelves will be easier and more efficient as your ‘real-time’ computer files will reflect both the consolidated and new inventory location and quantity. less shipping mistakes and returns will be made as picked inventory gets scanned for accuracy. This was because the problem was well defined specifically and there were certain issues that the researcher wanted to establish that was. CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY 3.1 Introduction This chapter outlines the methodology that was used in gathering data on the factors that affect inventory management in health care. The research design of the study was descriptive research design. descriptive research designs are objective and test specific hypothesis making it suitable for the study. the extent to which variables are related. Fourthly. 30 . Secondly. This was accurately and effectively done to ensure desirable. In addition. sample design.instantly available to everyone company-wide. target population. The research design incorporated important aspects of methodology that included study design. Thirdly.2 Research Design Research design is simply a guide in collecting and analyzing data in order to accomplish a study. you will be able to find misplaced inventory and prevent it from ‘collecting dust’. 3. data collection methods and data analysis methods.

subordinate staff.1 Target Population Population Category Procurement Department Store personnel Human Resource Personnel Finance Personnel Laboratory Staff Pharmacy Ward Attendants Medical Officers Subordinate staff Total Source: Author (2011) Population Size 730 410 250 105 520 320 665 1800 1200 6000 Percentage 12 7 4 2 9 5 11 30 20 100 3. The researcher wanted to ensure every stratum was well represented and therefore took a sample of 1% of each stratum as shown in table 3. pharmacy.4 Sampling Design Stratified random sampling was used in which the population was divided into strata and a random sample drawn from each sample who participated in the study.2 below. 31 .3 Target Population The target population included all elements in a researcher’s area of investigation. medical officers. ward attendants.3. finance personnel. store personnel. and human resource personnel hence the target population included representations of all categories of staff from management to operational level to avoid biasness and enhance accuracy. In this study the main objective was on inventory activity. Table 3. The target population included purchasers.

This was to ensure that each of the sub population was well represented. A stratified random sample was obtained by dividing the elements of a population into non. This was because the researcher wanted to make inference from a population which is not homogenous. Stratified random sampling provided a more accurate impression of the strata. Population Size 730 410 250 105 520 320 665 1800 1200 6000 Sample Size 7 4 3 1 5 3 7 18 12 60 Percentage 12 7 4 2 9 5 11 30 20 100 3.overlapping and homogenous sub population called strata.Table 3. the researcher selected a simple randomly from each of the stratum.2 Sample Size Population Category Procurement Department Store personnel Human Resource Personnel Finance Personnel Laboratory Staff Pharmacy Ward Attendants Medical Officers Subordinate staff Total Source: Author (2011) The researcher used stratified random sampling. Once this was obtained.5 Data Collection Methods 32 .

5. A specific time frame was given to the respondents to complete the questionnaire. 3. Data collection methods used to collect the relevant data was questionnaires. Closed questions were simply used to fill and collect the data where Yes or No answers were expected.5. questionnaires are always economical and time saving and free minded responses are encouraged. Sub-ordinate Staff and Finance Staff in KNH. come from either primary or secondary sources. The questions were both closed and open ended. Data collection methods are those employed in getting the information from the units under investigation.1 Questionnaires This is because Questionnaires were used to provide the major sources of data. questionnaires were distributed to individual persons in the categories. Questionnaires were designed and given to respondents so that they can fill at their own convenient time. Open ended questions were availed and space left for filling in the relevant explanations. This gave an opportunity to the respondents to clearly state and elaborate their views accordingly. Questionnaires were designed in a simple form which were easily understood and were delivered to the respondents who were to participate in the research study.6 Data Analysis Methods The questionnaires were carefully checked to ensure that responses were correctly ascertained. This 33 . The data was finally analyzed both qualitatively and quantitatively.Information that a researcher normally requires. Stores Personnel. A specific time frame was given to the respondents to fill the questionnaire 3.2 Validity and Reliability The questionnaires were distributed to 9 selected respondents in the nine categories (Purchasers. The 3.

objectives 4. The data collected was from Kenyatta National Hospital. 5% Yes No 34 95% .1 Effect of quality control on inventory management in healthcare organizations in Kenya.2 4. charts and figures were used to present the results for easier understanding and interpretation. Frequency 38 2 40 Percentage (%) 95 5 100 The analysis was done based on the research Source: Author (2011) Figure 4. presentation and interpretation of the study which was to investigate inventory management in health care organizations.2. The frequency tables. CHAPTER FOUR DATA ANALYSIS. PRESENTATION AND INTERPRETATION 4. Table 4.1 Presentation of Findings Effect of quality control on inventory management in healthcare organizations in Kenya.involved the use of descriptive statistical analysis method to ensure accuracy was obtained.1 Introduction The chapter deals with analysis.1 Response Yes No Total Effect of quality control on inventory management in healthcare organizations in Kenya.

Table 4. There was high positive response on the effect of quality control in inventory management in hospitals as the study revealed that.1 and figure 4. Extent of quality control on inventory management in healthcare organizations in Kenya. 95% of the respondents indicated that quality control affects inventory management. 5% of the respondents indicated that quality control does not affect the inventory management. the ‘yes’ respondents were majority since they understood the relationship between quality control and inventory management.2 Extent of quality control in inventory management 60 50 40 30 20 10 0 Percentage Very g reat Great ex tentS all ex m tent Moderate ex tent Category 35 .8.2.Source: Author (2011) From the table 4. Category Very great extent Great extent Small extent Moderate Total Source: Author (2011) Frequency 21 10 5 4 40 Percentage (%) 52 25 13 10 100 Figure 4.

9. it can be clearly seen that the majority of employees said quality control affect inventory management to a very great extent. Finally.3 Effect of customer satisfaction on inventory management Category Yes No Total Source: Author (2011) Frequency 30 10 40 Percentage (%) 75 25 100 Figure 4.Source: Author (2011) From the above table 4. 4.2 Effect of customer satisfaction on inventory management in healthcare organizations in Kenya Table 4. Those respondents who said to a small extent were 5 at 13%.3 Effect of customer satisfaction on inventory management 36 . 4 respondents felt the effect was to a moderate extent this represented 10%. The other 10 respondents indicated that quality control affects inventory management to a great extent at 25%.2. These respondents were 21 in total represented by 22%.2 and figure 4.

Table 4. 30 respondents in total representing 75% indicated that customer satisfaction has a major role in affecting inventory management while 10 respondents in total representing 25% that customer satisfaction had no effect on inventory management.25% Yes No 75% Source: Author (2011) From the table 4.2 and figure 4.3 above.4 Extent customer satisfaction affects inventory management Frequency 19 12 4 5 40 Percentage (%) 48 30 10 12 100 Percentage 40 20 10 Source: Author (2011) 0 Very g reat Great ex tent S all ex m tent Moderate ex tent 37 Category .2.4 Extent customer satisfaction affects inventory management Extent Very great extent Great extent Small extent Moderate Total Source: Author (2011) 50 30 Figure 4.

6 Effect of data processing 3 3% Y es No 67% 38 . 19 respondents representing 48% said that customer satisfaction affects inventory management to a very great extent.2. The results were. 4. 12 respondents representing 30% indicated that customer satisfaction affects inventory management to great extent.4 above are a reflection of the response obtained on the extent customer satisfaction affects inventory management. 4 respondents representing 10% felt customer satisfaction affects inventory management to small extent and 5 respondents representing 12% said customer satisfaction affects inventory management to a moderate extent .The table 4.4 and figure 4.3 Effect of Data processing on inventory management in healthcare organizations in Kenya Table 4.6 Effect of data processing Response Yes No Total Frequency 27 13 40 Percentage 67 33 100 Source: Author (2011) Figure 4.

7 Extent of data processing on inventory management Extent Very great extent Great extent Small extent Moderate Total Source: Author (2011) Figure 4.6.7 Extent of data processing on inventory management Frequency 30 8 2 0 40 Percentage (%) 75 20 5 0 100 80 70 60 50 40 30 20 10 0 Percentage Very g reat Great ex tent S all ex m tent Moderate ex tent Category Source: Author (2011) 39 . Table 4.Source: Author (2011) From the above table 4. 27 respondents in total representing 67% indicated that the data processing affects inventory management in the health care while 13 respondents that is 33% indicated that data processing does not affect inventory management. 6and figure 4.

4 Effect of reduction of operations costs on inventory management in healthcare organizations. 30 respondents representing 75% said that data processing affects inventory management to a very great extent. Table 4. 2 respondents representing 5% said that data processing affects inventory management to small extent.The table 4.8 Effect of reduction of operations costs on inventory management Frequency 20 20 40 Percentage 50 50 100 Yes 50% 50% N o Source: Author (2011) 40 . The results were.7 and figure 4. 4.2. 8 respondents representing 20% indicated that data processing affects inventory management to great extent. There was no response for moderate extent.8 Effect of reduction of operations costs on inventory management Response Yes No Total Source: Author (2011) Figure 4.7 above are a reflection of the response obtained on the extent data processing affects inventory management.

9and figure 4.9 Extent of reduction of operations costs on inventory management Extent Very large extent Large extent Moderate extent Low extent Total Source: Author (2011) Frequency 2 31 7 0 40 Percentage 5 77 18 0 100 Figure 4. Table 4. 20 respondents that is 50% each for both yes and no. This is an indication showing that reduction of operations costs does or does not have an effect on material delivery process.8 above is an indication showing how reduction of operations costs affects inventory control and the results obtained indicated equal response.8 and figure 4. the respondents were asked the extent to which reduction of operation costs affected inventory management and the results 41 .9 Extent of reduction of operations costs on inventory management 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 Percentage Veryla e L rg extent Modera L extent rg a e te ow extent extent Category Source: Author (2011) According to the table 4.Table 4.9 above.

4.this was represented by 37% while the age of between 31-35 years was of 25%.obtained were as follows: 2 respondents representing 5% indicate the effect was to a very large extent. 14 respondents were single and only1 respondent representing 2% was divorced. This implied that reduction of operation costs affects inventory management to a large extent. The results obtained also revealed that no respondent worked for less than 1 year while 5 respondents representing 12% worked between 1-5 years. There was no response for low extent.3. Out of the 60 questionnaires distributed 40 were returned that is 67% of the total population and only 20 questionnaires were not returned which is 33%. below 25 years was 25% and that of between 31-35 was 25% above 41-45 years was of 3%.those who have worked for between 10-13 years were 16 with 40%.3 Summary of Data analysis 4. Between 6-9 years work experience were 9 representing23%.15% represented 6 who worked for between 14-17 years while above 42 . 31 respondents representing 77% said to a large extent while 7 respondents representing 18% said to a moderate extent. . The majority of respondents were 25 representing 63% were married. According to the analysis 63% which is 25 respondents had attained professional qualifications on procurement functions and 10 of them representing 25% had reached college level while 12% which is 5 respondents had university qualifications. From the analysis most respondents were male by 25 in number representing 63% while the remaining 15 were female representing 37%. This revealed that the organization has professional qualified staff. This is an indication that the organization employs mostly married employees who are believed to be more responsible in carrying out their duties. The response also revealed that the age group of the majority was between 26-30 years meaning the age bracket is the young and energetic ready to work .1 General Information The response rate was the actual representation of the population.

It was noted that for efficiency and effectiveness to be realized in the health care . it should not be 43 . 4.3 Customer Satisfaction The contribution of customer satisfaction on inventory management had led to efficiency and effectiveness in the whole inventory management process.5 Reduction of Operation Cost The analysis revealed that although there was an equally mark from the respondents regarding reduction of operation costs on inventory management. The results also showed that the respondents were in the job grade of 4-6 representing 37% while job grade 7-10 and 11-14 both had 10 respondents with 25% each. It was revealed that data processing has been made easy by technology where documents are kept in large quantities in a small storage device like flash discs thus creating efficiency since loss of material and volumes of box files has become a thing of the past. Proper data processing systems ensured easy of document retrieval and tracing of all the stock without having to waste much time. being honesty and transparent in all dealings. 4.2 Quality Control The study revealed that quality control affects inventory management in the health care organizations.3.3. it was revealed that good inventory management results from better data processing. 4. The inventory guidelines set in the organization have to be ethically defined where quality is the core value of the organization at all time.this showed the researcher that majority of the respondents had several years working experience.18years had 4 with 10%. 4. both the customers and management have to practice highest level of integrity.4 Data processing In response to the effect of data processing.3. The results showed customer satisfaction contributed greatly to improved inventory management in the health care as such organizations are able to match their inventory with the customer’s needs at any given time without much delay.3. Those in job grade 15-17 were 5 representing 13%.

conclusions and recommendations of the research study. 44 The study gave several . CONCLUSION AND RECOMMENDATIONS 5. Use of internet and other computer based technology where all departments or sections were connected to a neutral centre improved inventory management because all the transaction were computerized and movement of good were checked by both the supplier and purchaser.1 Introduction This chapter discusses the summary of findings.forgotten that unless and until proper inventory mechanism is put in place. The findings contributed towards answering of the research questions and making conclusions of the research study. Reduction of operations costs may only work when proper methods are put in place CHAPTER FIVE SUMMARY OF FINDINGS. The summary of findings gives an in-depth explanation of the major factors raised by the respondents on the factors affecting material delivery process purchasing for cost reduction. This was based on the analyzed facts in quantitative analysis where numerical values were used to explain the effects of independent variables on dependent variables. there has to be a need to generate the entire process. the goods may not be made available in good time does affecting the efficiency of the firm in general. the whole reduction operation on inventory management may not be met. It was found that before delivery of materials begins. The use of better data processing was found to be a critical factor that affects inventory management. It was also found that when purchasing officers delay in the ordering.2 Summary of Findings Information technology was found to have a great effect on inventory management process in the health care. recommendations and suggestions for further studies to address. 5. This led to efficiency in material delivery process.

This was shown by 75% respondents. However. The study findings also revealed that with computerization. 5. when the operation costs were not checked there was a tendency of goods supplied are not of the right quality. right quantity.2 How does customer satisfaction affect inventory management in healthcare organizations in Kenya? Customer satisfaction largely affected inventory management. The findings revealed that proper documentation in procurement department was an indication of proper inventory management which can easily be retrieved whenever there are issuances and dispatch of similar items for ease of reference. Customer satisfaction had led to automation of all the inventory management activities in the organization. This was attributed to lack of highest standards of quality control professional who are competent and failure to adhere to procurement ethics as far as inventory management is concern. the study findings revealed that it equally affected inventory management while a similar number of the respondents indicate that reduction of operation coast did not very much affect inventory management.From the findings of the study. and price as ordered. The movements of goods are monitored such 45 . then there was no reduction of operation cost.3 5. paper work was reduced and computerized documentation is now spread over all departments besides the procurement and supplies department as suggested by the respondents. 5.1 Answers to research questions To what extent does quality control affect inventory management in healthcare organizations in Kenya? The extent to which quality control affects inventory management was indicated as very great with 52%. customer satisfaction had greatly contributed to improved inventory management in most organization not only in the health care but all profit and nonprofit organizations.3. With reduction of operation costs.3.

A 50% tie for yes and no was an indication that the respondents understood what reduction of operation cost meant.3 What is the effect of data processing on inventory management in healthcare organizations in Kenya? The effect of better data processing was high with a large number of respondents comprising of 67% indicating that. 5. . under utilization of information technology in inventory management leads to high level of ineffectiveness and slows down inventory control operations like recording of receipts and issues. 5. Information technology is a critical factor that determines the efficiency and effectiveness of inventory control. Reduction of operation cost is an aspect indicating proper inventory management system put in place. 5. The wide spread use of computer based inventory control techniques like JIT and MRP is greatly determined by how the company has integrated information technology particularly in stores and procurement department where information regarding inventory had to be shared. Some said that the extent better data processing affects inventory management was very great.that the buyer is able to know when the goods were delivery for shipments and the distribution channels used.5 How does reduction of operation costs affect inventory management in heathcare organizations in Kenya? There was equal response on the effect of reduction of operation costs on inventory management.3.3. Proper inventor is mandatory in cost reduction not only in purchasing but in general business operations of the company and if possible should be computerized to reduce the paper base transactions. This will enable the capturing and storing of information and 46 . This was because better data processing ensured effective and efficient inventory management.4 Conclusion All organizations especially the health care need to strictly adhere to proper inventory management policies.

5 Recommendations After the above findings. It was recommended that health care organizations should lower their operation costs and increase productivity in order to survive in the current competitive business world.5.3 Data Processing Although public health care organizations still use manual ways of keeping records. 5. Its inventory management should be a system that guarantees customer satisfaction at all costs. the researcher recommends health care organizations ensure proper inventory management is done and should have backups in data form stored in the computers and other storage devices that are easy to carry and retrieve data anywhere.5.2 Customer Satisfaction With customer satisfaction.4 Reduction of operation costs.5. health care organizations should realize that one unsatisfied customer may lead to the collapse of the entire organization. the researcher came up with the following recommendations: 5. Customer satisfaction is equally important in inventory management since customers always refer to the quality products or quality service they once received from the organization. 5. Proper keeping of records will ensure that stock in hand is well known and hence well regulated. Quality control systems should be put in place to reduce inspection costs and time consume 5.1 Quality Control Health care organizations should be able to monitor any defects or potential defects on the spot so as to correct these defects through proper inspection and also through setting quality standards. 5.5.also facilitate the analysis and use of information. 47 .

Mumbai. A (1998) “Personnel Management Theory and Practice”. United Kingdom Farmer D. Kogan Page Ltd. London.6 Suggestion for further study Inventory control is affected by many factors depending on the nature of the business operations and the type of inventories kept. The study explored four factors that were addressed by the specific objectives and this limited the study to explore on more other factors that negatively affects inventory management. Supply Chain Management Group. 4th Edition DP Publications. City Bunch India Ferguson N K and Neil G C. United Kingdom Armstrong M. and Jessop D. 5th ed Pearson Education Publishers United Kingdom Cole G. 5.V. Boroughs. Plymouth town. England. (2006) A handbook of Human Resource Management Practices 10th ed. W.United Kingdom. (2005) Purchasing & Supply Chain Management 4th Edition Prentice Hall Publishers. London.Automation could be seen as one way of reducing operating costs and improving company profit line. (2005). Accountability and Abuses of Power in World Politics. New England. United Kingdom Grant. R. and Robert O. Glasgow Business School. Silver Burdett. (1996) Purchasing and Management 9th ed. 4th ed Tata McGraw Hill Publishers. London. (2005) Purchasing Principle and Management. Kogan Page Publishers. Bailey P. (1991) ‘Developing Customer – Supplier Relationships. S (2003) World Class Supply Management. References Arjan J. United Kingdom 48 . 2nd ed. W. American Political Science Review 1st ed. Pitman Publishing. Suggestions for further studies is hence advisable to contribute towards identification of more other factors that affect inventory management and assist towards implementation of strategic methods or techniques in inventory control management. United Kingdom Dobler B.

J. and Dwivedi. Perreault and E. 2nd ed. Pitman Publisher. Hartford. 4th ed. 49 . London. (1996) Purchasing Principles and Management. New York Lysons K. 1st ed Longman. (1996): Purchasing. Pitman Publishing.F (2002). Jones B. Mc Carthy (2006) Joseph P.United Kingdom Landers . Bell and chain Ltd Glasgow Irwin Great Britain. ( 1989) Public Service Accountability: A Comparative Perspective.. Canada. P. 1st ed. The Chattered Institute of Purchasing and Supply Monitoring and Evaluation. Cannon William D. Newbury Park. Public Procurement Management. Great Britain Saunders M. Kumarian Press. 4th ed.J (1997) Strategic Purchasing and Supply Chain Management.Jabbra. Jerome Basic Marketing Mc Graw Hill Irwin Publishers..

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