ANALYSIS OF INVENTORY MANAGEMENT SYSTEM FOR PRODUCTIVITY IMPROVEMENT IN THE CASE OF BEDELE BEER MANUFACTURING SH.C

Major Advisor: Gezahegn Tesfaye (Ph.D.)

The purpose of this study was to investigate the analysis of the inventory management system and organizational productivity in Bedele Beer Manufacturing S.H.C. And to identify the challenges related to the inventory management system to improve the current productivity of the company. The significant problems of the case company are a shortage of skilled workers, an inability to implement inventory management practices, a shortage of spare parts and raw materials, prolonged procurement procedures because of a lesser amount of foreign exchange, quality issues related to the use of older technologies, and the human factor. Besides, the limited available literature was used as a secondary source. It used primary data, which was collected using a questionnaire, and the data was analyzed using descriptive statistics, including mean and standard deviation, by using relevant computer packages such as Microsoft Office Excel and the Statistical Package for Social Sciences (SPSS) program. To analyze existing productivity measures, partial and total productivity measurement models were developed and applied to monitor the current production status of the firm. The study's finding is that the total production of the current year is 66%, and the total productivity index also showed a decline of 54% in the same period. And also, the researcher identified ABC analysis, materials requirements planning (MRP), and just-in- time (JIT) as the most popular inventory management technologies to improve current productivity. The degree of MRP and JIT implementation and integration has a positive relationship with company performance, and the hybrid MRP and JIT system, which creates synergy and attains better company performance, would lead to a unit increase in MRP inventory of 0.486. A unit increase in JIT inventory would lead to a 0.1933 increase in organizational productivity in BBMC. The researcher revealed that inventory management system analysis significantly impacts the organization's productivity and requires better production methods to minimize costs and waste. The researcher recommends that the management constantly expose its staff to training to improve their skills in inventory management practices and enable the employees to understand the current inventory systems, which, when used, will help improve the organization's productivity.