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Strategic Inventory Management in the Humanitarian Crisis in Kenya

Impact of Strategic Inventory Management in the Humanitarian Crisis in Kenya: A study of Lodwar County and Referal Hospital in Turkana County

Introduction

1.1 Background Information

Inventory management is the active control process that allows organisations to govern their running of the various departments (Fichtinger et al., 2015). The various departments may include the production, purchasing, human resource, research and development, marketing and finance and accounting. Inventory management or control are critical to an organisation for mishandling of inventory expose the organisation to great dangers by minimizing its capabilities to do practical and useful activities while affecting the financial supremacy.

Any government desires to provide humanitarian assistance to its people at equal measures andun-discriminatively, to all victims of disasters based on need. However, institutional factors such as poor inventory management, access to resources, cost-effectiveness, and core competencies as well as capacities, influence the ability of the government to respond and are significantly associated with the decisions for launching emergency interventions.

At the Lodwar County and Referal Hospital, there is a need to have enough materials in stock always to ensure that the institution offers goods and services satisfactorily to all theclients in need of health services. However, despite the sensitive nature of the organisation function of providing medical services which are critical for handling the humanitarian crisis, the hospital’s supplies and stores departments have numerous cases where it runs out of supplies. A difficulty has always been experienced during attempts to determine the desired stock levels that ensure free flow of materials with fewer expenses incurred in stocking the various elements.

1.4 Research question

pact of strategic inventory management on the severity of humanitarian crisis at the Lodwar County and Referal Hospital?

.2 Research Aim

The study will aim at understanding how the effect of inventory management will assist in minimizing the severity of humanitarian crisis in Kenya.

1.3 Research Objectives and questions

The specific objectives will be;

  1. To investigate the impact of essential data on the severity of the humanitarian crisis
  2. To assess the impact of identification of areas of loss on the severity of the humanitarian crisis
  3. To investigate the impact of proactive, data-driven inventory management on the severity of the humanitarian crisis
  4. To contribute to the academic knowledge concerning strategic inventory management and its impact on humanitarian crisis
  5. To investigate the academic theories that the research will be based on

5 Research Justification

This topic was chosen because it has a significant impact to lives of a significant proportion of the population of Kenya. The study will help both the both public and private organizations in Kenya understand how they may apply the strategic inventory management practices to solve the humanitarian needs and challenges. Also, the findings of the study can be used by researchers as background information for future research.

 

Literature Review

2.1 Theories of Inventory management

A significant majority of firms use the deterministic inventory modelto develop inventory reserve estimates. A deterministic model is a method based on the assumptions that all parameters and variables associated with an inventory stock are known and that there is no uncertainty associated with demand and replenishment of inventory stock. These models are applied with the aim of determining the optimal inventory of single items when demand is mostly largely obscure. According to Muthama, (2016), inventory is built up at a steady rate so that a determined or accepted demand is met. Muthama, (2016) argued that a deterministic circumstance is characterised by the precise ascertainment of the system parameters.  The most common deterministic models adopted in controlling inventory are economic ordering quantity (EOQ) model, ABC analysis, and Inventory Turnover Ratio.

EOQ represents the optimal order quantity by the firm that minimises its total costs related to ordering, receiving and holding the inventory. On the other hand, the ABC analysis offers a suggestion that inventory values are not equal, and divides the inventory stock into three categories namely category A, category B and category C for inventories with the highest value, low value, and least valuables respectively. The technique allows for application of different inventory management approaches to various segments of the inventory in order to increase revenue and decrease costs. Thirdly, the turnover inventory ratio is used to establish the association between the average inventory and the cost of inventory sold during a given period. The formula described below is used in the calculation of the inventory turnover ratio

ITR=Cost of goods sold/Average Inventory

Also, Oballah, Waiganjo, and Wachiuri, (2015) claimed that stochastic one-item models can be applied for inventory management. The authors argue that such models are mostly applicable when the demand is unknown. Nonetheless, according to Matunga, Nyanamba, and Okibo, (2013), stochastic models are more legalistic and thus more relevant. The support given to this assertion is that the models are based on the shortfalls costs, the arrangement costs and the stacking away costs, as well as the attempt of formulating an optimal inventory plan. The researcher first studied an EOQmodel under the conditions of permissible delay in payments. A presentation of the discounted cash flow approach for the analysis of the optimal inventory policy in the presence of the trade credit was made. Second, a more advanced model where a quantity discounts for freight cost is added to the EOQ model was developed. The model was used to help in the stimulation of demand, boosting of market share and decreasing inventories of some items.

Okiria, Mpaata, and Mwirumubi (2017) assessed the relationship between the inventory management practices and the effectiveness of the downward supply chain of essential medicines in some selected 6 hospitals in Uganda. The researchers adopted a cross-sectional descriptive and analytical survey where both qualitative and quantitative data were collected. Overall, it was found that a significant relationship existed between the level of inventory practices in the hospitals and the effectiveness of the downward supply chain.

2.2 Conceptual framework and identification of research variables

The number of humanitarian crisis cases in Kenya, particularly the Turkana County has remained high due to poor inventory management systems. According to Yang, Pan, and Ballot, (2017), the significant factors which determine the success of strategic inventory management include the availability of essential data, areas of loss, and proactive data-driven inventory management. Availability of essential data was seen as a positive contributor to the success of an inventory management practice. Hence, it would influence the severity of the humanitarian crisis negatively. On the other hand, areas of loss make the management of inventories difficult. However, once identified, the areas of loss can be minimised leading to better management of the inventories, which ultimately results in reduced severity of the humanitarian crisis. Also, practicing proactive, data-driven inventory management was essential in enhancing the success of inventories (Yang, Pan, & Ballot, 2017). Hence, proactive and data-driven inventory is expected to minimize the severity of the humanitarian crisis in a region.

Independent                                                                                      Dependent

Essential data

·         The amount of strategically essential data gathered in the county

Identification of areas of loss

·         Identification score

Proactive, data-driven inventory management

·         Effectiveness inventory management software systems in place

Strategic Inventory management

 

Success level

·         Severity score of the Humanitarian crises

 

 

Fig 2.1: Conceptual framework

2.3 Practical Applications

Inventory management has been applied in many industries in the recent past. Assessment on the inventory management application for supply chains in healthcare is often made after an observation of the rapid growth in the demand for drugs and diagnostic systems within the industry. The biggest challenges for healthcare supply chains were to manage inventory efficiently while keeping up the satisfactory level. Also, disposable and perishable nature of many medical products was highlighted as significant problems in healthcare supply chain management. The study adopted a literature review design which provided a comprehensive study which addressed inventory management in healthcare supply chains. Lower inventory costs can be generated after outsourcing of non-critical medical supplies with similar service levels amongst different networks systems maintained. Also, perishable medical supplies can be utilized by inventory rotation systems (Leaven, Ahmmad, & Peebles, 2017).

 

Methodology

3.1 Research Philosophy

The research philosophy presents the belief about the way in which data about the studied phenomenon will be gathered, analysed and used. The research philosophy is classified into three approaches namely epistemology, ontology, and axiology. Ontology approach is based on the nature of reality and is classified based on the objectivism and subjectivism (Patten & Newhart, 2017). Objectivism portrays the position that social objects persists in reality external to social factors while subjectivism is concerned about the social phenomena which emerges from the perceptions and consequences of the various social actors concerned with their existence. On the other hand, epistemology is anchored on the acceptable knowledge of a particular area of study and can be divided into two aspects namely resources researcher and feeling researcher. The earlier aspect deals with the natural scientist’s data, while the later is concerned about the worker’s attitudes and feelings towards their managers (Patten & Newhart, 2017)

The proposed study is set to majorly rely on positivism philosophy which is a major classification of epistemology. This is because the research strategy to be adopted will be approached through the involvement of the data collection and analysis techniques. Also, the study will follow a highly structured methodology which will be aimed at facilitating the hypothesis.  Moreover, the study will rely on quantifiable observations as well as statistical analysis, and these are what positivism works on.

3.2 Research Method and Design

The study will employ a quantitative research method where numerical data will be gathered, analyzed using statistical techniques and conclusions drawn from the analysis results. The quantitative approach was chosen to enable a better generalization of the results. Also, unlike the alternative qualitative approach, quantitative method will yield unbiased results because it does not rely on the researcher’s skills and interpretation but standard data analysis processes as described by Patten and Newhart, (2017).

3.3 Target population

The study will target a population of all senior staffs in the various departments in the Lodwar County and Referal Hospital. The staffs are distributed in across the various Hospital departments and therefore, gathering information from this population will enable the researcher to understand all the inventory processes within the institution and the success towards minimising humanitarian crisis in Turkana County.

3.4 Sample size and Justification

The study will select a stratified sample of size greater than 150 with at least 25 respondents from each department. The sample size of 150 will be large enough to allow for generalisation results and with reduced bias. Stratification will ensure that all the Hospital departments are fairly represented in the sample. Stratified sampling technique was chosen because of its ability to provide greater precision with a small sample.

3.5 Data Collection

The data will be gathered with the help of questionnaires. Standard questionnaires that will be designed by the researcher will be administered to the respondents via the email. Email delivery will be advantageous because the process will be easier and less costly compared to physical visits. Also, since respondents will deliver the filled questionnaires directly to the researcher’s email, the process will ensure greater levels of confidentiality.

The dependent variable in the proposed study will be the success level of the institution towards minimisation of the humanitarian crisis in Turkana. The severity of the humanitarian crisis in Turkana County will be measured using the number of events that are threatening in terms of health, safety, or wellbeing of the residents.

For the independent variable, the researcher will gather data regarding the adopted strategic inventory management techniques. Three fundamental building blocks, namely gathering of essential data, identification of areas of loss, and practice of proactive, data-driven inventory management, upon which a successful inventory management strategy can be built, will be used to measure the level of adoption of strategic inventory management by the Government of Turkana county governments in Kenya in response to the humanitarian crisis. These fundamental building blocks will be used to create the study’s three independent variables which will be measured on a Likert scale of 1-5 with 1 showing a low score and 5 a high score.

Analysis will be done using modern tools such as SPSS and Excel. The analysis processes will include computation of descriptive and inferential statistics.

 

.6 Research Dissertation Timeline

 

Activity/time Wk1&2 Wk3&4 Wk5&6 Wk7&8 Wk9&10 Wk11&12 Wk13&14 Wk15&16 Wk17&18
Preliminary research
Writing proposal draft
Submitting the proposal draft for guidance
Correcting and writing the final proposal report
Submitting the proposal for approval
Data Collection
Data analysis
Writing of dissertation report
Submitting the report

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