Abstract

This study investigates the impact of inventory management practices on the performance of commercial companies.case of santa lucia in douala. Inventory management is crucial for manufacturing firms, as it directly influences cost efficiency, production processes, and customer satisfaction. This research employs a mixed-method approach, combining quantitative data from company records and qualitative insights from interviews with key management personnel. Key inventory management practices examined include Just-In-Time (JIT), Economic Order Quantity (EOQ), and ABC analysis. The findings reveal that effective inventory management significantly enhances operational performance by reducing holding costs, minimizing stockouts, and improving order fulfillment rates. Companies practicing JIT and EOQ methods reported higher levels of efficiency and customer satisfaction due to their ability to maintain optimal inventory levels and respond swiftly to market demands. Additionally, the implementation of ABC analysis helped firms prioritize resources and streamline operations. Challenges such as inadequate infrastructure, inconsistent supply chains, and financial constraints were identified as barriers to effective inventory management. However, companies that invested in advanced inventory management systems and employee training programs saw substantial improvements in their operational metrics. The study concludes that adopting robust inventory management practices is vital for Commercial  companies in Douala to enhance their operational performance, achieve cost savings, and gain competitive advantage. Recommendations for future research include exploring the long-term effects of advanced inventory technologies and the role of government policies in supporting inventory management initiatives.

Key Words: Inventory Management, Operational Performance, Companies, Douala, Just-In-Time, Economic Order Quantity, ABC Analysis, Cost Efficiency, Customer Satisfaction, Supply Chain Management.

CHAPTER ONE

BACKGROUND TO THE STUDY

Inventory management is a critical function in the manufacturing sector, significantly influencing operational performance and overall efficiency. The ability to effectively manage inventory determines a company’s capacity to meet customer demand promptly while minimizing costs. The importance of inventory management is highlighted in numerous studies, which emphasize its role in achieving competitive advantage and operational success (Chopra & Meindl, 2016).

Douala, the economic hub of Cameroon, hosts a significant number of companies that contribute substantially to the country’s GDP. The city’s strategic location, coupled with its access to major ports and transportation networks, makes it an ideal center for manufacturing activities (World Bank, 2020). However, these companies face challenges in inventory management due to infrastructural deficiencies, inconsistent supply chains, and financial constraints.

Effective inventory management practices such as Just-In-Time (JIT), Economic Order Quantity (EOQ), and ABC analysis are essential for optimizing inventory levels, reducing holding costs, and enhancing customer satisfaction (Jacobs & Chase, 2018). JIT focuses on reducing inventory levels by coordinating production schedules closely with demand, thereby minimizing waste and inefficiencies. EOQ is a model that determines the optimal order quantity to minimize the total costs of inventory, including holding and ordering costs. ABC analysis categorizes inventory into three classes (A, B, and C) based on their importance and value, allowing companies to prioritize management efforts (Wild, 2017).

The commercial sector in Douala, despite its potential, has been grappling with several challenges. Inadequate infrastructure, such as poor road networks and unreliable power supply, hampers the smooth flow of goods and materials (Ndikumana & Boyce, 2018). Additionally, inconsistent supply chains due to logistical inefficiencies and political instability in the region pose significant risks to inventory management (Kamga, 2019).

Financial constraints further complicate inventory management for manufacturing firms in Douala. Limited access to credit and high-interest rates make it difficult for companies to invest in advanced inventory management systems and technologies (IMF, 2021). These constraints often force firms to rely on outdated and inefficient inventory practices, leading to higher operational costs and lower productivity.

Despite these challenges, some manufacturing companies in Douala have adopted innovative inventory management practices to improve their operational performance. For instance, the use of enterprise resource planning (ERP) systems has enabled better coordination and real-time monitoring of inventory levels, leading to improved decision-making and efficiency (Omar, 2019). Additionally, training programs aimed at enhancing the skills of employees in inventory management have shown positive results in terms of operational performance (Nguegan, 2020).

Government policies and support play a crucial role in facilitating effective inventory management practices. Initiatives aimed at improving infrastructure, providing financial support, and promoting technological adoption can significantly enhance the operational performance of manufacturing companies in Douala (Ministry of Economy, Planning, and Regional Development, 2020). Moreover, collaboration between the public and private sectors can lead to the development of robust supply chain networks that are resilient to external shocks.

The impact of inventory management on operational performance in Douala’s commercial sector is evident. Companies that have successfully implemented effective inventory management practices report higher levels of efficiency, cost savings, and customer satisfaction (Mburu, 2018). These firms are better positioned to respond to market demands and maintain a competitive edge in the industry.

This study aims to explore the relationship between inventory management practices and operational performance in Douala’s commercial sector. By examining the current practices, challenges, and potential solutions, this research seeks to provide valuable insights that can help companies optimize their inventory management strategies and enhance their overall operational performance. The findings are expected to contribute to the existing body of knowledge and inform policymakers on the necessary interventions to support the manufacturing industry in Douala.