Assessing the influence of organisational culture on the availability of inventory and on-time delivery

Abstract

Technical issues and advancements have always been a key focus area in the manufacturing industry, with soft issues often ignored. Metrics such as on-time delivery, inventory performance, and first-pass-yield are easy to measure and are typical key performance indicators for the industry. Due to the significant focus to improve these efficiency KPI’s, more delicate issues such as the organisational culture are often overlooked. The manufacturing company where the study was conducted is experiencing issues in achieving the required stock holding quantities and on-time delivery to its customers. It was established that the organisation has the necessary systems to manage both inventory and OTD to its customer successfully. Therefore, the study aimed to identify the relationship between organizational culture and its impact on the on-time delivery of manufactured components and inventory targets. For this study, the sampling frame was the selected general and precision manufacturing/engineering firm. The sample population comprised of employees from all company levels. Interviews were conducted with participants in a focus group format, with each focus group consisting of three or four participants. The techniques used to evaluate the data from the interviews were empirical discourse and relational analysis. These techniques were applied to identify a broader theme in terms of the organizational culture and identify meaningful relationships between the different concepts. The software utilised to determine the relationships is Atlas.ti. The findings pointed to a predominantly negative culture that is present in the organisation, caused by an autocratic management style and a neglected human resource management department. It was concluded that the necessary systems are in place to achieve inventory and OTD targets. However, the middle-management team has, over time, created a negative culture through their management style and mannerisms leading to reduced inventory and OTD performance. A further contributor to the negative culture is the lack of HR policies and procedures to promote evaluation, feedback, and training for promising employees.