The effect of inventory management on profitability of cement manufacturing companies in Nigeria

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Mgbemena, Ugochukwu Michael
Issue Date
MBA in Project Management
Dublin Business School
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Inventory is an important section of supply chain that tracks non-capitalised assets and its selling in order to generate higher profitability. The manufacturing sectors highly require proper inventory management to maintain its business operation. Being the second largest industry of Nigeria, information, such as, the inventory management, the innovation, importance, advantage and disadvantages, regarding the Nigerian cement giants, Dangote, Lafarge Holcim and BUA greatly unavailable. The research variable, the relation between inventory management and profitability generation was identified the necessity of inventory conversion day of raw materials, work-in-progress goods and finished goods. Dangote is the largest cement company, that generates N300 billion through the delivery of 73-million-ton cement, that determining economic contribution of the company. However, the technological innovation is one of the potential aspects of inventory management, including JIT and SAP technologies, giving improvement in inventory stock and profit generation. For the purpose of the study, the semi structured online interview measure is introduced for identifying the effectiveness of inventory management process for developing the annual productivity. Additionally, the secondary data analysis measure is also introduced by the involvement of annual reports (2014-2019) of different manufacturing companies such as Dangote, BUA and Lafarge group. On the other hand, in terms interview process 3 working capital managers and 3 inventory management officers are introduced. Therefore, the data analysis and discussion were conducted for delivering the accurate justification related with the collected information. At the end of the study, different types of recommended measures are delivered for developing the effectiveness of inventory management process of the Nigerian cement manufacturing industry.