This chapter gives a brief outline of the study, beginning with a background to the study which necessitates the rationale behind the conduct of the research. It also contains the problem statement, research questions, objectives of the study, limitations and the relevance of the study as well as some ethical concerns.
Inventory constitutes a large portion of any organizations assets (i.e. merchandise or manufacturing) due to its transaction, precautionary, and speculative purposes. There is always cost associated with keeping excess inventory and a high possibility of running out of stock if good inventory keeping is not adhered to. It is therefore imperative to balance between the financial and operational influence of inventory through proper inventory management. For instance, instead of buying in bulk to hedge against price fluctuations, firms can enter into long-term contracts with suppliers so that they have a guaranteed supply of products with minimal changes in price. In addition, firms will be able to combat the increases in demand by reducing their setup times.
The efficient functioning of all organisations depends on the effective management of inventories. It is a known fact that the impact of improper inventory management which often results in either over or under stocking of inventories leads to severe consequences to organisations. Stock represents money and must be cared for to minimize any losses to organisations.
The government of Ghana has over the years invested heavily in equipping the Ghana Air Force (GAF) with various platforms (aircraft) and continuing to provide it with spares, petroleum and uniform among others to boost its operational readiness.
The success of any military operation either offensive or defensive depends on getting the needed logistics at the right time, in the right quantity and in the right state. This therefore makes inventory management a crucial aspect of any military operation. The repercussion of stock outs and surplus inventory have far reaching implications for the GAF and the nation at large.
Apart from firms practicing Just-In-Time (JIT), all organisations regardless of their nature and size, whether manufacturing or service industries keep some inventory. Inventory refers to a stored quantity of goods that exceeds what is needed for the firm to function at the current time. According to Biederman David (2004) inventory is a quantity or store of goods that is held for some purpose or use. Inventory may be kept as an insurance against long lead times, as a buffer to meet uncertain demands or to benefit from economies of scale.
According to the National Defence Policy of Ghana, the role of the Ghana Air Force (GAF) is to provide "air transport and offensive air support to the Armed Forces and to protect the territorial air space of Ghana". To achieve this, an effective, efficient and sustained inventory support system is a prerequisite. This guarantees a continuous flow of requisite materials to meet operational exigencies. The need for effective inventory management in the GAF cannot be underscored since most of its operational requirements are procured from outside sources.
The Supply Directorate together with its Wings (Departments) is the entity responsible for provisioning, storing, issuing and accounting for all items used by the GAF. Over the years, the Supply Wing has been confronted with overstocking of certain inventories ranging from aircraft spares to consumables. The consequences of large quantities of obsolescence and obsolete stock and their attendant financial losses to the GAF in particular and the state at large are rife.
The maintenance of excess inventory comes with inventory carrying costs such as storage, insurance, obsolescence or obsolete costs and also the cost of money tied up in the inventory itself.
The concern of Supply personnel of GAF is not keeping too much or too little inventory but also on how to: maintain a wide variety of stock without spreading the rapidly moving inventory too thin in order to meet customer requirement and satisfaction as well as preventing inventory from becoming obsolete and the elimination of waste in the entire supply chain. This therefore calls for the need for an efficient management of all GAF inventories to ensure smooth air operations within the Ghana Air Force.
A critical area in GAF decision support is inventory management. Planning for stock levels can be a daunting task due to uncertainty associated with military air operations. The Air Force is an environment where improbable events can have massive impact on operations. The availability of correct amount of stock can in no doubt enhance the responsiveness, efficiency and preparedness of the Air Force and ultimately save human lives especially during national emergencies. On the contrary, excessive stock especially surplus ammunition can result in huge military losses through damage, stock degradation and obsolescence. This can also pose a serious risk to public safety and ultimately challenge Ghana's ability to attain air superiority. To enhance the operational readiness of GAF, it is very significant to give effective inventory management the desired attention.
Inventory management problems have plagued the defense departments of several countries for decades For instance, the Pentagon has included inventory management as part of its list of government areas most prone to fraud, waste, and abuse. GAO recently reported that half of DOD's $69.6 billion inventory of spare parts, medical supplies, hardware, food, and clothing is either obsolete or rarely used. The underlying causes of this unneeded inventory include outdated and inefficient inventory management practices that often fail to meet customer demands, inadequate inventory oversight, weak financial accountability, and overstated requirements.
Best practices used in the airline industry provide opportunities to build on the efforts of the military to improve its logistics pipeline. The first key practice is that warehousing and distribution functions can be outsourced to third-party logistics services that are capable of rapid delivery of parts and state-of-the-art information systems that would speed the shipment of parts between depots and field locations.
The second is eliminating excess inventory and quickly initiating repair actions to reduce the amount of time parts are stored, improve the visibility of production backlogs, and reduce the need for large inventory to cover operations while parts are out of service.
The third is that cellular manufacturing techniques can improve repair shop efficiency by bringing all the resources (tooling, support equipment, etc.) needed to complete repairs to one location, thereby minimizing the current time-consuming exercise of routing parts to different workshops located hundreds of yards apart.
The fourth is that innovative supplier partnerships can increase the availability of consumable parts, minimize the time it takes to deliver parts to mechanics, and delay the purchase of parts until they are needed to complete repairs.
1.2 Statement of the Problem
The Ghana Air Force (GAF) is the third arm of the Ghana Armed Forces. It was established in1959 by Dr. Kwame Nkrumah (Ghana's first president) to complement the efforts of Ghana Army and Navy with the mandate of protecting and defending the territorial airspace of Ghana and also to contribute to overall national development. GAF has lived up to its responsibility and with the discovery of crude oil three years ago more is expected from it to protect this black gold.
The GAF has a Headquarters in Accra and three operational Bases situated in Accra, Takoradi and Tamale. It operates various platforms including helicopters, fighter and transport aircraft. Aircraft are machines that are structurally fragile and require frequent and routine maintenance to ensure their continued serviceability. In order for GAF to maintain its operational readiness, various forms of spares including consumables as well as clothing items are kept in anticipation for uncertain future demands.
Over the years, GAF has performed its mandate creditably albeit some problems and challenges. Notable among these problems and challenges are poor inventory control and issues relating to large quantities of stores getting spoilt or obsolescent in storage. These are against the best practices good inventory and stores management.
Several factors contribute to slow logistics pipeline of the Air Force. Four of the factors are:
Slow processing and shipping of parts from the field to the repair depot,
Delays in inducting parts into the repair shops,
Inefficient organisation of the depot repair process, and
Lack of consumable parts needed to complete repairs. Because of these factors, parts sit idle or are delayed in the repair process, which lengthens the total repair time.
With the reequipping of the Ghana Air Force with modern platforms, it is appropriate to explore proper inventory management practices to help in addressing wastes and costs associated with either under or over stocking of inventory.
It is argued that the final resort for any supply chain is the proper management of the inventory among the players within the chain. Less number of research has been conducted on inventory management practices and issues within the GAF. It is against this background that this study is being conducted to investigate the inventory management techniques and practices of the GAF. This study is being conducted to fill the gap in theoretical and empirical knowledge of inventory management practices in Ghana.
1.3 The Research Questions of the Study
To effectively analyse the objectives of this study, the following research questions will be asked:
What are the inventory management techniques and practices used by the GAF?
How does the GAF minimise waste in its supply system?
What are the measures put in place to minimize obsolescence in its inventory?
What are the problems and challenges encountered in the management of inventory at the GAF?
What are the remedies prescribed to improve on efficiency and effectiveness of inventory management in the GAF?
1.4 Objectives of the Study
This study's objectives have been categorized into general and specific as follows:
1.5 General objective
The general or broad objective of this study is to investigate the inventory management techniques and practices of the GAF.
1.6 Specific Objectives
The specific or actual objectives of this study are:
To identify GAF's specific inventory techniques and practices.
To find out how GAF effectively minimises waste in its supply system.
To examine the measures put in place to deal with frequent obsolescence of GAF stores.
To identify problems and challenges encountered in managing inventory in the GAF.
To make recommendations as to how inventory management can be improved in the GAF.
1.7 Limitations of the study
Research work requires ample time and financial support. This study was challenged by the difficulty in combining research with work routines. Again, financial and time constraints significantly influenced the limitation of the sample size to 50 respondents. Despite the bottlenecks however, every effort was put in place to ensure the reliability and validity of the study were not compromised.
1.8 Ethics
The confidentiality of respondents was maintained throughout the study and beyond. The views and opinions of all respondents were taken in good faith and adequately safeguarded from getting into the public domain without their consent. Additionally, no form of in-human treatment or harassment was meted out to any respondent for the purpose gaining any undue advantage. The respondents were at liberty to discontinue from taking part in the study at any point. The researcher adequately briefed all respondents on the objectives and sought their consent prior to any data collection.
Every literature used in this study has been sufficiently and appropriately cited to avoid plagiarism. The research strictly obeyed the Coventry University guide on ethics and ensured that questionnaires and interview questions were duly approved before they were administered. Above all, all the data collected were treated confidentially and used strictly for the purpose for which it was collected.
1.9 Significance of the Study
This study is undertaken to advance the awareness in the effect of different inventory management techniques in an organisation. The issue of inventory management is vital to the success of any organisation and is one of the serious determinants of the continuity and efficient productivity and operation of the organisation.
This study is significant because it is hoped that on completion, it will provide further insights into the understanding of stock control among GAF personnel. Thus the significance of this research cannot be underestimated since it will serve as a basis for the adoption of improved inventory management techniques that could result in a lot of cost savings to GAF and the nation at large.
Furthermore, because of the crucial role the GAF plays in overall national defence and international peacekeeping, it is believed that this study will be able to unearth the inventory management techniques that can enhance smooth air operations in the GAF and the Ghana Armed Forces in general.
Through using GAF as a reference point, the study will make an interesting contribution to the understanding of the general and specific effects of stores control in other public institutions.
Besides, the study will further justify the need to strengthen management and control of stock with anticipated benefits. In addition to helping the public utility sector in taking serious decisions on management of stock, it will also serve the interest of the private sector business organisations as well as the general public as a source of enlightenment since it will enlarge the existing literature on management of stock in Ghana.
Again, the study will enhance the knowledge of GAF supply personnel and equip them with a better understanding of the best inventory management practices that could be adopted to eliminate waste in GAF supply system.
Last but not least, in the case of advanced researches on the subject matter, researchers can use this thesis to learn more about the basic relationship between the concepts.
1.10 Organisation of the Thesis
The thesis is arranged in five key chapters as follows:
Chapter one covers the introduction, background, statement of research problem, research questions, objectives of study, limitations and significance.
Chapter two deals with the literature review.
Chapter three is about research methodology and how the research was carried out.
Chapter four contains the findings of the research.
Chapter five contains conclusions and recommendations.
