Lean Practices and Sales Performance of Listed Oil and Gas Firms in Nigeria

Business and Management

This study employs the random effects method to investigate the impact of lean inventory practices on sales performance of oil and gas firms in Nigeria. The study considers three dimensions of lean inventory practices: namely, just in time, total quality management, and total preventive maintenance, with data on these variables collected through a validated structured questionnaire instrument from 100 purposely selected managers or representatives of 10 listed oil and gas companies in Nigeria. The Cronbach Alpha method is used to determine the reliability of the research instrument, while face and content validity are based on the opinions of industry experts and teaching professionals. However, sales revenue data are obtained from the annual reports and accounts of the selected companies and consist of 80 firm-year panel observations for the period from 2010 to 2017. Our results show that all the three dimensions of lean inventory practices have a positive relationship with sales revenue performance. However, while only the effect of just in time is statistically significant, the joint explanatory power of all the three lean practices dimensions is very low at approximately 3%. These results therefore suggest that oil and gas firms that are listed in the Nigerian stock exchange have not fully embraced lean inventory as a strategy for improving their sales performance.

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