The Effect of Just in Time Inventory Management on Supply Chains Efficiency: The Case of International Paint Brand Manufacturing Companies in Addis Ababa
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Date
2024-06
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Addis Ababa University
Abstract
The general objective of the study was to examine the effect of Just-in-Time (JIT) inventory management on the supply chain efficiency of international paint brand manufacturers in Addis Ababa. The research design study employed both descriptive and explanatory research designs because it was appropriate for the achievement of the research objectives. The research also used a mixed approach, combining both quantitative and qualitative data collection methods. The target populations were international paint brand manufacturing companies in Addis Ababa. A combination of stratified and random sampling techniques was employed. The total population of the paint manufacturing companies is 167 and the sample size was 116. Both primary and secondary data were collected. Primary data were collected with questionnaire and interviews and secondary data was gathered from existing literature, the collected data was analyzed using descriptive and inferential statistics by the aid of SPSS version 23. The findings indicate that the implementation of JIT Inventory Management has significantly reduced production time, improved responsiveness, and simplified production processes, with reliable supplier deliveries. Cost reduction measures have minimized waste, maintained quality, and improved efficiency, though some concerns about employee morale persist. Strong buyer-supplier relationships have optimized production scheduling, enhanced manufacturing efficiency, and ensured high-quality raw materials, relying on open communication and collaboration. Perceptions of JIT implementation risks are mixed, with some concerns about investments in forecasting and communication systems but fewer worries about quality control. Efficiency indicators like high inventory turnover and reduced order fulfillment time are widely recognized, with strong support for JIT principles and the use of KPIs, regular reviews, and benchmarking to improve supply chain practices. The findings indicated that production time, cost reduction, and risk management positively and significantly impact supply chain efficiency. Some suggestions to improve the practice are regular reviews, employee training, rewards programs, and feedback channels to improve JIT efficiency and morale.
Key Words: Just-in-Time (JIT), inventory management, Production time, Cost Reduction, Buyer Supplier Relations, Risk, Supply Chain Efficiency