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Investigating the effects of logistics management on organizational

performance: New evidence from the manufacturing industry

Article in Journal of Accounting Business and Finance Research · January 2023

DOI: 10.55217/102.v16i1.606

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 Journal of Accounting, Business and Finance Research
ISSN: 2521-3830
Vol. 16, No. 1, pp. 1-11, 2023
DOI: 10.55217/102.v16i1.606

Investigating the effects of logistics management on organizational performance: New

evidence from the manufacturing industry

Bugri Benjamin Adelwini1

Lomatey Isaac Toku2
Opare Francis Adu3

Koforidua Technical University, Ghana.

1,2,3

1
Email: [email protected]
2
Email: [email protected]
3
Email: [email protected]

Abstract

The goal of this study is to determine how logistics management Keywords:

affects the organizational performance of ten Ghanaian roofing Logistics management
sheet manufacturing companies. To analyze the influence of Manufacturing industries
Multiple linear regression
logistics management on organizational outcome, the researchers Organizational performance.
employed multiple linear regression. The findings showed that the
aspects of logistics management that have a beneficial impact on JEL Classification:
organizational performance include inventory management, H57; L60; L91.
physical distribution, and warehouse management. Logistics plays
Copyright:
an important role in supporting organizations as they strive for © 2023 by the authors. This article is an
more efficient management systems. Better implementation of open access article distributed under the
inventory management, transportation management, physical terms and conditions of the Creative
distribution, and warehousing management procedures in logistics Commons Attribution (CC BY) license
(https://creativecommons.org/licenses/by/4.0/).
management will help manufacturing firms to improve their
performance. Publisher:
Scientific Publishing Institute

Received: 18 November 2022

Revised: 30 December 2022
Accepted: 12 January 2023
Published: 7 February 2023

( Corresponding Author)

Funding: This study received no specific financial support.

Competing interests: The authors declare that they have no competing interests.

1. Introduction
Manufacturing industries continue to exhibit an imperative role in the growth of established (Peng, Zhang,
& Chang, 2021; Signé, 2018) and developing economies (Mbah, Obiezekwem, & Okuoyibo, 2019; Opoku, Fiati,
Kaku, Ankomah, & Opoku-Agyemang, 2020). Manufacturing has historically provided the government with
employment possibilities, creative thinking, and financial resources through gross domestic product (GDP) and
taxes (Akoto, Awunyo-Vitor, & Angmor, 2013; Bawa, Asamoah, & Kissi, 2018). Manufacturing sectors in
developing nations, such as Ghana, have contributed 15%–35% of GDP and 30%–45% of job formation (Peng et
al., 2021; Signé, 2018). They also play an important role in converting unused resources into useful goods. The
main directive of the industrial division is to alter stockpiles of raw resources, parts or elements, and ongoing
projects into finished commodities to satisfy customers' needs (Sitienei & Memba, 2015).

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Manufacturing enterprises, according to some, will never operate without relying on logistics, which
account for roughly 70% of total current assets (Sitienei & Memba, 2015; Takim, 2014). This demonstrates the
critical role of logistics in accomplishing the performance and competitiveness objectives of manufacturing
enterprises. According to John, Etim, and Ime (2015) and Panigrahi (2013), the increasingly competitive and
dynamic nature of production settings has compelled businesses to develop comprehensive and innovative
inventory management strategies. As a result, manufacturing businesses in developing countries can only
survive unhealthy competition by continually managing their inventories and responding to changing customer
demands (Kontuš, 2014; Raheman, Afza, Qayyum, & Bodla, 2010).
Logistics management refers to the plans and actions that determine and oversee a company's product line
(Chalotra, 2013; Ogah, Asiegbu, & Lagos, 2022). In order to meet customer expectations, it is also connected to
inventory identification, procurement, planning, storage, packaging, and transportation. Inventory management
activities vary by company, industry, and sector, according to Karim, Nawawi, and Salin (2018).
Furthermore, logistics management improves inner controls to assure high-quality catalogue while also
offering worth to clients (Karim et al., 2018; Sitienei & Memba, 2015). It essentially lowers logistic waste,
scarcities, theft, and production expenses while maintaining sales progress, client satisfaction, competitiveness,
and, ultimately, business survival. Manufacturing companies can reduce risk by hedging against variations
caused by main risk factors such as economic downturn, financial crises, market fluctuations, extreme weather
phenomena, and change in demand with proper logistics management. It also acts as a buffer, allowing for the
processing of uncertainties and variances (Brandt et al., 2022; Sitienei & Memba, 2015). It also strikes a good
balance between too little and too many logistics, ensuring that inventory levels are always at their best (Ogah
et al., 2022). It determines present and future inventory requirements to avoid overstocking or understocking.
Lysons and Farrighton (2012) stated that effective inventory management guarantees inventory visibility at the
upstream and downstream nodes of supply networks.
On the other hand, poorly managed logistics may lock up almost 70% of a company's entire current assets,
impacting both its operational and overall performance (Karim et al., 2018; Kontuš, 2014). It could also open
large gaps in internal controls, exposing manufacturing organizations to financial risks, such as theft and fraud
schemes (Zakaria, Nawawi, & Salin, 2016), production and delivery delays, numerous faulty products, and
wasteful product shortages (Jacobs, Chase, & Lummus, 2014; Ogah et al., 2022; Orobia, Nakibuuka, Bananuka,
& Akisimire, 2020). It could also put these companies at risk of logistical losses (expirations, pollution, theft, and
damage), lack of a competitive advantage, inefficient storage methods, frequent material waste, product
shortages, high customer dissatisfaction, poor product quality, a lack of flexibility, and employee dissatisfaction.
As a result, the study relied on the theory of limitations and strategic decision theory to correctly understand
the notion of logistics management. Manufacturing enterprises, for example, are primarily susceptible to logistic
limitations from theft, expirations, shortages, and extended lead periods, which could impede their whole system,
according to the idea of constraints (Gupta & Boyd, 2008; Puche, Ponte, Costas, & Pino, 2019). Only by
implementing applicable inventory management strategies can manufacturing organizations overcome
inventory restrictions while enhancing performance levels (Deressa, 2022; Flynn, Huo, & Zhao, 2010).
These facts also show that logistics management strategies, which aim to balance supply and demand by
regulating and tracking manufacturing and purchasing orders to guarantee continuous material flow and value-
adding activities (Opoku et al., 2020), can never be successful. The most popular logistics management
techniques include economic order quantity (EOQ), just-in-time (JIT) replenishment, vendor-managed
inventory (VMI), strategic supplier relationships, material replenishment planning (MRP), and Pareto analysis
(Chalotra, 2013; Sitienei & Memba, 2015). These tactics have been shown to lower production costs overall
while improving operational performance across a range of metrics, including product quality, operating speed,
flexibility, and dependability. In a similar vein, logistics management approaches used by manufacturing
companies in developing nations such as Ghana have been shown to be similar (Adu-Fosu, 2016; Bawa et al.,
2018). Nevertheless, it is uncertain which procedures the companies choose to use. Furthermore, no previous
research in Ghana has shown how alternative logistics management systems affect the operational performance
levels of manufacturing businesses. Major logistics management techniques used by Ghanaian manufacturing
companies, such as Pareto analysis, EOQ, JIT replenishment, VMI and, more recently, strategic supplier
partnerships, were previously identified (Prempeh, 2015; Qrunfleh & Tarafdar, 2013). They continued by saying
that it is impossible to overestimate the significance of logistics management techniques as indicators of a
company's financial performance. Similar to this, logistics management was found to enhance the performance
of Ghanaian manufacturing enterprises (Bawa et al., 2018; Nyamah, Opoku, & Kaku, 2022);however, it remains
unclear how much each of the strategies contributes to the operational performance of the manufacturing firms.
Furthermore, the African continent has performed poorly in inventory compared to other continents,
according to a 2016 evaluation by the Shippers Council of Eastern Africa (SCEA). The survey found that the
five countries with the worst logistic performance are Rwanda (2.04%), Namibia (2.02%), Sierra Leone (1.97%),
Eritrea (1.70%), and Somalia (1.34%); this shows how poorly Africa is performing in terms of logistics
management techniques. The performance of the manufacturing sector as a whole and its contributions to the
economic development of African nations have undoubtedly suffered from poor inventory management and
continue to do so. According to a 2016 study by the United Nations Industrial Development Organization
(UNIDO), the value of manufacturing sectors to developing countries has significantly reduced during the last

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25 years. For instance, the industry's economic growth in Ghana has been progressively dropping over time,
with average contributions to GDP and job creation of only 5.5% and 8.2%, respectively, indicating a stagnated
and dying sector (Bugri, Michael, & Arthur, 2019). According to a 2018 estimate by the Ghana Statistical
Service, the sector's contribution to Ghana's GDP fell by around 50.55% between 2007 (9.1%) and 2017 (4.5%).
Given this backdrop, this study examines the organizational performance and logistics management
methods of Ghanaian manufacturing enterprises. Additionally, the study evaluates the logistics management
techniques that Ghanaian manufacturing companies found to be most effective. Additionally, it investigates how
various methods of logistics management affect the productivity of manufacturing companies.

2. Literature Review
The theoretical, conceptual reviews, and conceptual framework of the study are presented in this section.

2.1 Theory of Constraints (TOC)

Eliyahu Goldratt established the theory of constraints (TOC) as a management philosophy targeted at
recognizing restrictions that prevent a system from performing at its best (Gupta & Boyd, 2008). Every
organization, according to the idea, has at least one constraint (limiting factor) that prevents the entire system
from meeting planned goals (Puche., Ponte, Costas, Pino, & De la Fuente, 2016). Anything that prevents a
company from meeting its objectives is referred to as a limitation (Antwi, 2019). It is the weakest link in a system
since it is the major limiting factor in achieving the firm's aims (Dodoo, Appiah, & Donkoh, 2020; Prempeh,
2015). The idea also implies that businesses can only overcome their limits by focusing on them in a clear,
methodical, strategic, and all-encompassing way. According to Flynn et al. (2010) TOC, a management concept
that emphasizes continuous system improvement, any limitations are addressed through total quality
management and effective processing processes. Manufacturing organizations may be more susceptible to
inventory problems, which result in unnecessarily long lead times, subpar material orders, a high number of
unmet and urgent orders, low client satisfaction, and poor performance (Qrunfleh & Tarafdar, 2013). As a result,
the theory indicates that businesses can only solve their inventory problems by implementing the best inventory
management strategies to alleviate bottleneck concerns while maintaining inventory control and production
scheduling. Furthermore, according to Puche. et al. (2016) the concept improves value addition without
disrupting the firm's production flow by eliminating any limitations. The research is therefore supported by :
Total Ownership Cost (TOC), which helps industrial firms comprehend the idea of inventory limitation and how
it may be resolved using practical techniques such as Just In Time (JIT), supply side platform/storage service
provider (SSP), Materials Requirement Planning (MRP), Economic Order Quantity (EOQ), and Vendor-
managed inventory (VMI) among others.

2.2. Strategic Choice Theory

According to strategic choice theory, decisions made by top management have an impact on organizational
performance as well as how internal and external organizations interact (Wangrow & Schloemer, 2019). In order
to increase organizational performance levels, the idea underlies the significance of key management decisions,
according to Sinaga, Nurfarina, Iskandar, Mozammel, and Rosita (2019). Strategic choice theory also illustrates
various environmental factors, such as supply, inventory, and purchase management, which have an impact on
a manager's decision-making abilities. The idea states that management with decision-making authority must
choose the appropriate inventory investment and inventory optimality options to significantly improve
performance results. According to strategic choice theory, management is seen as downstream decision makers
who influence choices while modifying organizational procedures, structures, and systems (Sinaga et al., 2019).
To maintain high performance levels, they must therefore make wise decisions to protect the organization's
culture, resources, and inventory.
Furthermore, Achieng, Paul, and Mbura (2018) also developed a strategic option model that illustrates how
an organization's actions, environment, and performance objectives are all interconnected. The methodology
seeks to ensure high performance requirements to boost efficiency when resources are constrained or limited.
The idea contends that management must make pertinent and wise judgments regarding inventory management
in order to prevent future inventory issues. Therefore, managers should use inventory management strategies
that are appropriate for their line of work; failing to do so could endanger a company's profitability,
operationalization, general performance, and continued existence. The research is informed by the strategic
choice theory since it shows how top management choices affect organizational performance levels. Each choice
made by management regarding inventory management practices could have a positive or negative effect on the
success of their businesses.

2.3. Logistic Management and Organizational Performance Linkage

Transport management is at the center of logistics due to the requirement for the movement of material
along a supply chain. As a result, numerous studies have been carried out locally to examine the function of
transportation management in supply chain management. Mutangili (2019) conducted a study to examine the
influence that electronic logistics has on the performance of logistics firms. The study used a sample of 75

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individuals chosen at random from among 107 business employees and discovered that e-logistics had a positive
impact on the performance of logistics enterprises. In today's competitive environment, numerous firms are
vying for a piece of the global market and hoping to benefit from improved production and sourcing efficiency.
Today, a key indicator of corporate performance is the importance of logistics management services in
ensuring the smooth flow of resources, goods, and information throughout a company's supply chain (Soares
Aharonovitz, Vidal Vieira, & Suyama, 2018). The relevance of logistics management has expanded across many
industries due to nationalization and globalization trends. The aim of logistics management for businesses is to
increase productivity and competitiveness of their current production and distribution systems that utilize the
same resources (Mendes dos Reis, Sanches Amorim, Sarsfield Pereira Cabral, & Toloi, 2020). For a corporation
to maintain a competitive edge in customer service and operational efficiency, logistics management is essential.
Over the past ten years, practitioners and the government have paid a lot of attention to logistics management
because, when it operates efficiently, it successfully delivers the right product to the right place at the right time.
Understanding the importance of sustainability in logistics management is essential for competitive advantage
since operational success has a positive effect on a company's financial performance.
In business, sustainability is defined as the ability to maintain and increase competitiveness over time.
However, logistics performance had to be measured for logistics management to be deemed a contributor to a
firm's performance (Liu, Yuan, Hafeez, & Yuan, 2018). Due to a growing understanding of the advantages of
using logistics to create client value and the repercussions of logistics management on corporate performance,
Ulutaş and Karaköy (2019) agreed that monitoring logistics performance has become a high priority. According
to Kabak, Ekici, and Ülengin (2020), there are at least three primary reasons why a company would want to
analyze logistics performance: to lower operating costs, to promote revenue growth, and to increase shareholder
value. He went on to note that by measuring running costs, a researcher can determine whether, when, and
where to make operational changes to decrease spending, as well as discover areas for better asset management.
Studies show that suppliers, delivery of finished goods, inventory management expenses, customer satisfaction,
and organizational success are all correlated with logistics management. As a component of the logistics
management system, the performance management process is connected to customer satisfaction. Effective
logistics operations and capabilities are the foundation for organizational success (Khan, 2020; Pham, Do, &
Ngo, 2020).
Luu (2019) evaluated the logistics performance of 150 businesses and how it affected business performance.
Increased inventory availability, timely delivery, on-time and damage-free deliveries, line items, fill rates, and
sales all increased as a result of improved logistics efficiency, effectiveness, and differentiation, which also
improved net margin and asset turnover as well as overall firm performance. Zaid, Sleimi, and Alaqra (2021)
investigated the impact of logistics capabilities on manufacturing business performance. The research was based
on a survey of 1000 manufacturing companies. Exploratory and confirmatory factor analyses can be used to
estimate a manufacturing company's logistics capacity, and the results show that there are three factors to
consider when thinking about logistical capabilities: process capability, flexibility capability, and data integration
capability.
Muchori (2015) investigated how traffic congestion affected the efficiency of freight logistics at the Port of
Mombasa. The study used a descriptive survey methodology with a sample size of 150 replies from a possible
10,450 employees, and it was based on the infrastructural burden caused by the road from Nairobi to Mombasa,
which has continued to strain logistics and operations at the port. The correlation statistics show a positive
association between traffic congestion and transportation costs. As a result, freight logistics are less effective
when there is traffic congestion. Mukolwe and Wanyoike (2015) investigated the effects of logistics management
strategies on Mumias Sugar Company's operational effectiveness. The study found, among other things, that
physical distribution methods and transportation administration are comparable to a profit-maximizing flow of
products and raw materials, which enhances operational efficiency.
In 2016, Macharia and Mwangangi (2016) examined the impact of logistics management on the performance
of the industrial sector. The study used primary and secondary data, as well as published and unpublished
information. The study found that the use of transport management systems was a significant predictor of
business performance using multiple regression analysis. The United Nations High Commissioner for Refugees
(UNHCR) program assessed how fleet management methods affect the provision of services to refugees
(Mehmood, 2021). The research is predicated on the notion that logistics cannot function without
transportation. The study used a descriptive research design and had a target population of 390 employees. The
rate of fuel use on tracking, monitoring, fuel sourcing, daily fuel allocation, and the rate at which fuel usage is
tracked all have an impact on the supply of services. According to Mutangili (2019), Safaricom Limited's inbound
logistics performance was examined in relation to lead time variability. According to the study, lead periods in
terms of manufacturing, shipping, turnaround time, time for customs brokerage, and the speed of goods
inspection have a direct and significant impact on the efficiency of incoming logistics as assessed by delivery
time, cost, and quantity using a linear regression model. Despite the abundance of literature on transportation
and logistics management and its advantages, the majority of studies only consider the logistical aspect.
Additionally, there is no data showing, for instance, how transportation management impacts the
effectiveness of supply chains for the textile industry. A company's ability to turn a profit today affects whether
or not it will continue, but for that to happen, the whole cost must be less than the total revenue. A product or

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service should be priced as affordably as possible in an era of fierce competition, but the quality should be as
high as possible to expand the market (Azeem, 2018). The only way to do this is to reduce costs. The main goals
of logistics and supply chain management are to reduce costs and boost business performance (Liu et al., 2018).
Increasing operational efficiency and effectiveness while keeping a competitive advantage requires the
introduction, implementation, and continuous improvement of logistics management practices.
Distribution, human abilities, worker competencies, and technology all have an impact on how effectively a
supply chain runs (Kanda & Iravo, 2015). The research presented in this paper focuses on logistics management
and its relationship with cutting costs, which boosts operational effectiveness and results while also making
organizations more competitive in the market. In this study, there are two objectives. The scientific purpose of
this research is to obtain new insights into logistics management in manufacturing organizations, as well as to
emphasize the long-term implications of implementing proper management techniques in this field. The
practical purpose of this study is to make the findings available to domestic businesses to help them improve
their operations and, if they are hesitant, convince them to implement a logistics and supply chain organization
structure. The general premise that has been established is that if an organization uses proper logistics
management strategies, its total expenses will decrease and its business performance will increase. Figure 1
represents the conceptual framework of the study, emphasizing the importance of logistics managements in
achieving organizational performance. It shows that five different factors constitute good logistics management
practice and will lead to positive organizational performance.

Inventory Warehouse
management management

Transportation Logistics management

management

Physical Information flow

distribution management

Figure 1. Conceptual framework.

3. Population, Sampling, and Data Collection

The participants in this study are employees and executives of 10 chosen roofing sheet manufacturing firms.
The total population within walking distance of the workplaces is around 100 people, with 10 respondents
representing each firm, but only 97 people responded. Management members were chosen via purposeful
sampling, which is the process of selecting respondents who are specialists in the field of research or who have
the technical competence to provide the information required by the study (Zikmund, Babin, Carr, & Griffin,
2013). Questionnaires were used as the main data collection instrument to acquire primary data, which is
appropriate when there is a specific goal, research topic, or hypothesis in mind (Asenahabi, 2019). Questionnaires
were chosen because, according to Zhang (2021), information collected from questionnaires is free of biases and
researcher influence, allowing for the collection of reliable and valid data. The questionnaires were self-
administered with the help of research assistants. Self-administered questionnaires, according to Osuagwu
(2020), are helpful since they are less expensive than face-to-face interviews and allow the researcher to contact
people who would otherwise be unavailable. The respondents' answers to the questions related to the five
important components in logistics management (inventory management, transport management, physical
distribution, warehousing management and information flow management) are resolute and help to determine
whether these aspects lead to better company performance.

3.1. Methodology
To analyze the influence of logistics management on organizational outcome, multiple linear regression
was employed. At a 95% confidence level, the coefficient, significance, and beta values were used to interpret the
data. As a result, the regression equation is stated as:
Y = α + β1 X1 + β2 X2 + β3 X3 + β4 X4 + β5 X5 (1)
Equation 1 presents the model for the estimation, with Y representing the dependent variable (organizational
performance), α is the intercept and β1– β5 represent the independent variables (inventory management,
transportation management, physical distribution, warehouse management, and information flow management).
The equation used to compute the figures provided by the multiple regression analysis is as follows:

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Y = 0.394 + 0.192 (X1) + 0.417 (X2) + 0.408 (X3) + 0.786 (X4) + 0.081 (X5) (2)
Equation 2 presents the coefficients of the independent variables that make up logistics management and the
dependent variable is organizational performance. Inventory management, transportation management,
physical distribution, warehousing management, and information flow management are all independent factors.

4. Results and Discussion

Demographic parameters such as gender, marital status, educational level, and length of service with the
municipality were all taken into account in the study.

Table 1. Demographic information of respondents.

Variables Frequency Percentage
Gender
Male 64 66.0%
Female 33 34.0%
Age
21–30 Years 36 37.1%
31–40 Years 35 36.1%
41–50 Years 26 26.8%
50 Years and above 0 0.0%
Marital status
Single 34 35.1%
Married 58 59.8%
Divorced/Separated 5 5.2%
Educational qualification
Master’s degree 41 42.3%
First degree 40 41.2%
Higher national diploma 16 16.5%
Years of working with the company
Under 1 year 3 3.1%
1–2 Years 37 38.1%
3–4 Years 26 26.8%
5 Years and above 31 32.0%

Table 1 explores the findings of the demographic characteristics and reveals that males made up the
majority of the respondents (66%). This indicates that the company is dominated by men, and their female
colleagues make up 34% of the workforce. When it came to age distribution, the findings revealed that 36 (37.1%)
of the respondents were between the ages of 21 and 30, 35 (36.1%) were between the ages of 31 and 40, and 26
(26.8%) were between the ages of 41 and 50. On the subject of marital status, 34 (35.1%) of the respondents were
single, 58 (59.8%) were married, and 5 (5.2%) were divorced/separated. In terms of educational attainment, 41
(42.3%) of the respondents had a master’s degree, 40 (41.2%) had a first degree, and 16 (16.5%) had a Higher
National Diploma. In terms of the number of years that employees have been with the company, 3 (3.1%) of the
respondents were employed for less than a year, 37 (38.1%) were employed for 1–2 years, 26 (26.8%) were
employed for 3–4 years, and 31(32.0%) were employed for 5 years or more.

Table 2. Model summary.

Model R R-squared Adjusted R-squared Std. error in the estimate
1 0.766a 0.587 0.564 0.377
Note: a indicates significance at 1%.

The results displayed in Table 2 and Table 3 summarize the model used in the study. The value of 0.766 in
the regression output suggests that there is a substantial association between logistics management and
organizational outcomes of the roofing sheet manufacturing companies. The R2 result implies that the
performance of these companies may explain 58% (0.587) of logistics management.

Table 3. ANOVA.
Model 1 Sum of df Mean square F Sig.
squares
Regression 17.979 5 3.596 25.337 0.000***
Residual 12.631 89 0.142
Total 30.609 94
Note: *** signifies a 1% significance level. Dependent variable: Organizational performance.
Predictors: (Constant), inventory management, transport management, physical distribution, warehousing
management, information flow management. *** indicates that the model is fit and significant.

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Table 4. Regression results.

Model 1 Unstandardized Standard T-stat. Sig.
coefficient coefficient
B Beta Beta - -
(Constant) -0.394 0.436 - -0.903 0.369
Inventory management 0.192 0.085 0.214 2.265 0.026**
Transport management -0.417 0.100 -0.429 4.175 0.000***
Physical distribution 0.408 0.124 0.325 3.292 0.001***
Warehousing management 0.786 0.129 0.592 6.070 0.000***
Information flow management 0.081 0.075 0.100 1.081 0.282
Note: *** and ** signify 1% and 5% significance levels, respectively.

Table 4 contains the regression results of the study, and they show that inventory management has a
favorable and substantial influence on the performance of manufacturing enterprises in Ghana. At a significance
level of 5%, this is represented by a coefficient figure of 0.192. This result is linked to manufacturing companies'
enhanced inventory management practices. This has three major advantages: Increased production speed and,
consequently, sales; lower financing costs (equity capital or debt) that allow for additional project investment;
and more control over liquidity levels. Since it governs how inventory decisions are made, to guarantee that the
greatest possible quantity of each item is available to purchase, inventory management is an essential component
of a manufacturing organization. This process greatly streamlines a business's processes, enabling it to distribute
manufactured items successfully and perform well as an organization. This result is backed up by Karim et al.
(2018) and Sritharan (2019). Their findings suggest that an organization's profitability and inventory
management are significantly related and that effective inventory management increases profitability, while
ineffective management results in subpar performance. Using panel regression models again, Karim et al. (2018)
discovered that an increase in inventory management effectiveness is positively connected with financial
performance as gauged by the return on operating assets. Omer and Aljaaidi (2021) and Sritharan (2019)
discovered a favorable relationship between better inventory margin and three performance metrics, as well as
a substantial link between improved turnover and earnings per share.
With a coefficient value of -0.417, transportation management has an unfavorable association with the
performance of the roofing sheet manufacturing companies. This suggests that transportation management is a
hindrance to organizational effectiveness. This is due to ineffective delivery mechanisms, such as insufficient
cars for transporting items from warehouses to wholesalers. Other issues could be a bad road network and a
significant increase in fuel prices. These variables contribute to delivery system delays. Transportation
management is a positive determinant of organizational success, according to major research (James & Inyang,
2022; Muhalia, Ngugi, & Moronge, 2021). The studies by Muhalia et al. (2021) and James and Inyang (2022)
corroborate these findings.
The physical distribution regression output is 0.408, indicating a positive and substantial link with the
performance of the roofing sheet manufacturing companies. According to the findings, a rise in physical
distribution leads to an improvement in company performance. One probable factor is that physical distribution
is straightforward; faster shipment means that more clients will be more likely to complete their purchases
rather than abandon their carts. When storing inventory in multiple locations rather than a single centralized
warehouse, shipping times can be shortened. When supply chain functions are optimized, they tend to save
money in the long run. Both the company and its clients save money when speedy basic shipping is provided.
Physical distribution aids in the maintenance of price stability. Even buyers anticipate pricing constancy over
time. The proper utilization of transportation and warehousing infrastructure can aid in the matching of demand
and supply, resulting in price stability. Physical distribution is a critical factor in company performance,
according to Snoeck and Winkenbach (2020) and Khanal and Pokhrel (2021), whose research revealed a link
between physical distribution and company performance.
In today's competitive market, a warehouse's functionality must be redesigned to achieve the necessary
outcomes and to remain competitive. A well-defined warehouse management system plays an important role in
physically completing the specified offering in this context (Masudin, Sumah, Zulfikarijah, & Restuputri, 2021).
The performance of the roofing sheet manufacturing companies has a favorable link with warehousing
management, which has a coefficient value of 0.786. According to research by Wambua, Okibo, Nyang'Au, and
Ondieki (2015) and Buzu (2021), good warehousing management has an influence on organizational results.
They discovered that the most effective technique for achieving a balanced stock is a good warehouse
management system, which makes it easier to keep track of just-in-time inventory, enhances record accuracy,
and allows for proper demand forecasting. This allows warehouses to keep products in the best possible
environment and in the most efficient order, lowering on-hand amounts, ensuring the safety of stock, and
reducing waste, scrap, and obsolescence.
Effective and prompt reactions to ever-changing client tastes and preferences have become critical
components of successful corporate performance in today's competitive climate, and information flow helps to
achieve optimal performance (Kumar, 2022). With a coefficient value of 0.081, information flow management
has a positive link with the outcome of the roofing sheet manufacturing companies. When all other independent

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Journal of Accounting, Business and Finance Research, 2023, Vol. 16, No. 1, pp. 1-11

factors (inventory management, transportation management, physical distribution, and warehouse

management) remain constant, company performance will improve. With a significance value of 0.282, which is
more than 0.005 at the 95% confidence level, information flow management is not relevant and significant, and
does not contribute positively to the prediction of the performance of the roofing sheet manufacturing companies
in the study.
However, when assessing the impact of independent variables on organizational performance (inventory
management, transportation management, physical distribution, warehouse management, and information flow
management), the beta values are employed without regard for the negative sign. The beta values for inventory
management, transportation management, physical distribution, warehouse management, and information flow
management are 0.192, -0.417, 0.408, 0.786, and 0.081, respectively. As warehousing management has the
largest beta value, this variable contributes the most to the explanation of the roofing sheet manufacturing
companies' performance.

Table 5. Reliability data using Cronbach’s alpha.

Variable Cronbach’s alpha Number of items
Inventory management 0.662 7
Transport management 0.795 6
Physical distribution 0.728 3
Warehousing management 0.769 6
Information flow management 0.899 9
Organizational performance 0.765 9

Cronbach’s alpha values were used to verify the interior steadiness of the variables employed in the study
to assure their reliability. The variables and their corresponding values are shown in Table 5. The Cronbach's
alpha values were calculated using the data collected to determine the scale's reliability. This was done to see if
the scales used in the questionnaire were reliable and consistent, and it relates to how well the items on the scale
'hang together,' i.e., if they're measuring the same thing. The Cronbach’s alpha value of a scale should ideally be
greater than 0.7 (DeVellis, Lewis, & Sterba, 2003). Values greater than 0.7 are acceptable but values greater
than 0.8 are preferred. Other researchers have suggested that an alpha of 0.4 is also acceptable. The Cronbach’s
alpha values for all of the reliability tests were greater than 0.4, indicating that these variables have strong
internal consistency.

5. Conclusion
The goal of the study was to determine the influence of logistics management on the performance of
manufacturing firms by looking at the individual components of logistics management. According to the
findings, one logistics management dimension had a negligible impact on firm performance, while the other four
had a significant impact. It was found that information flow management had little influence on the performance
of industrial companies. This means that by including inventory management, transportation management,
physical distribution, and warehousing management procedures in logistics management, a manufacturing
firm's performance is likely to improve. Logistics plays an important role in supporting organizations as they
strive for more efficient management systems. In business, an efficient logistics system combined with inefficient
internal management would make it impossible for the organization to respond to client needs at the lowest
possible price in the shortest possible timeframe, and the quality level would fail to meet client expectations,
putting the organization at a competitive disadvantage. Information flow management was found to have a
negligible impact on manufacturing firms' performance. As a result, information flow management and company
performance have a negative association.
Based on the results, it is advisable for companies to integrate information flow management into their
operational procedures, such as fleet management, vehicle scheduling, route planning, and vehicle maintenance,
in order to ensure the timely distribution of goods and the purchase of raw materials, as well as increase overall
cost effectiveness, market share, and lead time, all of which will improve performance. It is recommended that
enough measures be put in place to ensure that organizational performance in the manufacturing sector
continues to improve. Employees must also be able to communicate ideas, make decisions, and operate swiftly
and accurately. By bringing the relevant people and information together, Slack (instant messaging application)
helps to eliminate data bloat and costly bottlenecks caused by inefficient information flow. As a result, the study
suggests that suitable budgetary considerations and strategies be examined before beginning any procedure.
This will allow the pros and cons of that precise method to be determined and its appropriateness to be assessed.
The study also suggests that policymakers and legislators take into account the requirement for assisting and
establishing policies to improve the implementation of logistics and transportation strategies. Finally,
monitoring and evaluation are essential. Excellent operations management in manufacturing organizations
depends on a thorough review of all logistics and transportation procedures.

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