Inventory planning and construction project performance: A case of King Fisher Drill Camp Project by China National Offshore Oil Corporation(CNOOC) Uganda Ltd

Abstract

The study examines the relationship between inventory planning and construction project performance in CNOOC Uganda Ltd. Specifically, the study examines the relationship between inventory systems, replenishment methods, DRP used in CNOOC Uganda Ltd. and the performance of the Kingfisher Drill Camp and Materials Laydown area Project. This study used a cross-section design adopting a qualitative and quantitative approach on sample of 75 CNOOC Supply chain partners consisting of projects staff, outsources partners and suppliers. There was a high positive significant relationship between inventory systems used in CNOOC and project performance (r = 0.735**, p = 0.000). Inventory system was the most significant predictor of the variance in project performance (β=0.733, t = 9.329, p=0.000). Inventory replenishment methods were the second most significant predictor of the variance in project performance (β= 0.256, t=2.777, p=0.007). DRP system had no significant relationship with project performance (r = 0.297, p = 0.090, β= 0. 118, t = 1.255, p= 0.214). The study concluded that the use of single and multi period system; use of pull and push inventory replenishment methods for inventory planning significantly contributes to construction project performance in Uganda. It was also concluded that the current level of integration of DRP did not contribute to project performance. To enhance project performance, the study recommends that the management of CNOOC should use a single period system for project inventories that may have a single purchasing opportunity. While using the multi period system management should always establish inventory-holding costs, annual number of orders for its critical/important project inventory. Management should also use pull technique of quick response and efficient consumer response method for inventory replenishment; and promote sharing of inventory demands information with vendors/suppliers enabled by modern information system.