• editor.aipublications@gmail.com
  • Track Your Paper
  • Contact Us
  • ISSN: 2456-7817

International Journal Of Engineering, Business And Management(IJEBM)

Effects of Inventory Control Management Systems on Organization Performance in Tanzania Manufacturing Industry- A Case Study of Food and Beverage Manufacturing Company in Mwanza City

Irene Omari Mbugi , Deusdedita Lutego

International Journal of Engineering, Business And Management(IJEBM), Vol-6,Issue-2, March - April 2022, Pages 56-69 , 10.22161/ijebm.6.2.5

Download | Downloads : 8 | Total View : 400

Article Info: Received: 28 Jan 2022; Received in revised form: 09 Mar 2022; Accepted: 18 Mar 2022; Available online: 29 Mar 2022


This study was about the effect of inventory control management systems on organization performance in Tanzania manufacturing industry: a case study of food and beverage manufacturing company in Mwanza City. The specific objectives of the study were to: determine the types and purposes of inventory control management practices followed ascertain the influence of inventory control management practices on organizational performance and determine how technology adopted in operationalization of inventory control management practices affect organization performance. In order to accomplish the objectives, qualitative approach methodwas adopted. Using purposive sampling, five participants in the inventory and production department were selected and interviewed. Data was analyzed using content analysis techniques with the aid of Nvivo Qualitative Analysis software. Other data was collected from documentary review company and industry published reports. The findings of the study revealed that the food and beverage manufacturing company had evidence of different types of inventories which included raw materials, work-in-progress and finished goods managed under FIFO system for cost reduction and production efficiency. It was also evident that the company carried inventory control management using perpetual inventory system done on periodic basis and inventory system is combined with acomputerized database of inventory quantities at various locations for up-dating in real time by store and warehouse using barcode scanners. It was also revealed that inventory control management system using principles of Economic order quantity [EOQ]affects organizational performance in terms of cost reduction, production efficiency, flexibility and profitability. The study recommends an implementation of new practices/models such as Vendor Managed Inventory (VMI) in the company’s inventory control management.

Inventory Control Management Practices, Organizational Performance, EOQ.

[1] Adamu, M. O. Budlender, N. and Idowu, G. A. (2014). A note on Just-in-Time Scheduling on flow Shop Machines. Journal of the Nigerian Mathematical Society, 33, 321-331.
[2] Adeyemi, S. L. and Salami, L.O. (2010). Inventory management: A tool of optimizing resources in a manufacturing industry. Journal of Social Science, 23(2); 135-142.
[3] Adoga, L. and Valverde R. (2014), Fundamentals of Production Management. Lagos: Enykon Consult Press.
[4] Adoga, I., and Valverde, R. (2014). An RFID Based Supply Chain Inventory Management Solution for the Petroleum Development Industry, Journal of Theoretical & Applied Information Technology, 62, (1), 199-203.
[5] Agus, A & Noor, Z.M (2006/2010). Supply chain management and performance. An Empirical Study. A working paper University of Malaysia.
[6] Ali, K, Chan, S. and Kannan, P. (2014). Inventory Management of Perishable Products: A time Decay linked logistic Approach. International Journal of Production Research, 51, (13), 3864-3879
[7] Aljunaidi, A., &Ankrak, S. (2014). The Application of Lean Principles in the Fast-Moving Consumer Goods (FMCG). Journal of Operations and Supply Chain Management, 7(2), 1-24.
[8] Ambe, I. M. (2012). Determining Supply Chain Practices and Strategies of Light Vehicle Manufacturers in South Africa. Published PhD Thesis. Pretoria, South Africa: University of South Africa.
[9] Aramide, S. F. & Bashir, M. (2015). The Effectiveness of Internal Control System and Financial Accountability at Local Government Level in Nigeria. International Journal of Research in Business, Vol. 3(8), pp.1-6.
[10] Arnold, G. (2008). Corporate financial management (4thed.). England: Financial Times/Prentice Hall.
[11] Atnafu, D and Balda, A (2018), The impact of inventory management practices on firms’ competitiveness and organizational performance: Empirical evidence from micro and small enterprises in Ethiopia, Cogent Business & Management, Vol. 4, 1-16
[12] Ballan, S., Bødiker, K. B., & El Ebras, R. (2015). Inclusive business in Egypt: A Baseline Assessment for Fast Moving Consumer Good Sector. Bonn, Germany: Business Action Network (IBAN).
[13] Bicheno, J. (1996/2016). Supplier partnerships. National institute for manufacturing management, London
[14] Blanchard, D. (2010). Supply Chain Management Best Practices (2nd ed.). London: Wiley Publishers.
[15] Brigham, E.F &Gapenski L.C (1993/2013). Intermediate Financial Management. New York:Dryden Press.
[16] Brudan, A. (2010), Rediscovering performance management: systems, learning and integration, Measuring Business Excellence, Vol. 14, No. 1, pp. 109-123.
[17] Chapman, S., Arnold, T. K., Gatewood, A. K., & Clive, L. (2015). Introduction to Materials Management (8th ed.). London: Pearson.
[18] Chase, C. (2013). Demand-driven forecasting: A structured approach to forecasting. New Jersey: Wiley Publishers.
[19] Chopra, A. (2015). Innovative state: How new Technologies can Transform Government. New York: Atlantic Monthly Press.
[20] Chuchu S A, Adoyo A and Osuga B O (2015), Information management for essential medicines supplies in public primary care facilities in Nairobi County, Kenya, African Journal of Pharmacy and Pharmacology, Vol.9(19), pp. 532-539
[21] Denzin, NK, & Lincoln, YS (2011). The SAGE Handbook of qualitative research. Thousand Oaks: Sage Publications.
[22] Duru, A. N., Okpe, I. &Udeji, A. O. (2014). Inventory positioning and firm performance in engineeringcompanies. Evidence from Nigeria. World Engineering & Applied Sciences Journal Vol. 5 (3), pp. 85-91
[23] Eneje, C., Nweze, A. &Udeh, A. (2012). Effect of efficient inventory management on profitability: Evidence from selected brewery firms in Nigeria. International Journal of Current Research, Vol.4, pp. 350-354.
[24] Eroglu, C., & Hofer, C. (2011). Lean, leaner, too lean? The inventory-performance link revisited. Journal of Operations Management, Vol. 29, pp.356–369
[25] Farzaneh, D. P. (2012). The Effect of inventory management on firm performance. International Journal of Productivity and Performance Management, 57(5), 355-369.
[26] Gitau R W (2016), Inventory Management practices and organizational productivity in parastatals in Kenya, Master’s Thesis University of Nairobi, Kenya
[27] Ideet, I. L., &Wanyoike, D. (2012).Role of Buyer-Supplier Relationship on Supply Chain Performance in the Energy Sector in Kenya: A Survey of Kenya Power and Geothermal Development Companies
[28] Jooste C, Kim V., & Roberts-Lombard M (2015),“Reinter mediation Strategies For Disinter mediated Travel Agencies: A Strategic Marketing Perspective”, International Business & Economics Research Journal, Vol. 14 (3)
[29] Joseph, L. (2014). Inventory Management Techniques and their Importance. Journal of Economics & Economic Education Research, Vol.16 (1), pp. 98-106.
[30] Kafyatta, G. (2016), Investigating the Effectiveness of Inventory Control Techniques in Uganda Public Institutions, Diploma in Supply Chain Management Dissertation, Namilyango College of Business, Mbalala, Uganda
[31] Kagashe G A , Makenya, F B and Buma D (2012), Medicines Wastage at a Tertiary Hospital in Dar Es Salaam Tanzania, Journal of Applied Pharmaceutical Science Vol. 4 (06), pp. 098-102
[32] Kanda, M. K. &Iravo M. A. (2015). Access Factors Affecting Supply Chain Efficiency of Medical Supplies in public Health Centres in Kenya: A Case Study of Public Health Centres in Elgeyo Marakwet Count. International Journal of Academic Research in Accounting, Finance and Management Sciences, Vol. 5 (2), pp. 32–41.
[33] Kazare B (2009), Assessment of the Effectiveness of Inventory Management and Control Process in Higher Learning Institutions in Tanzania, Saint Augustine University of Tanzania (SAUT) – Mwanza.
[34] .Kimaiyo, K. K. &Ochiri, G (2014). Role of Inventory Management on Performance of Manufacturing Firms in Kenya – A case of new Kenya Cooperative Creameries. European Journal of Business Management, Vol. 2 (1), pp. 336-341.
[35] Kimotho, H.K.(2014).Assessment of Insurance Uptake and Penetration in Kenya (A Case of Nakuru County). http://ir-library.ku.ac.ke/handle/123456789/10087
[36] Kitheka S S (2012), Inventory Management automaton and the performance of supermarkets in Western Kenya, Master’s Thesis, Technical University of Mombasa, Kenya
[37] Kitheka, S.S., &Ondiek, G.O. (2014). Inventory Management Automation and the Performance of Supermarkets in Western Kenya. International Journal of Research in Management & Business Studies, Vol. 1(4.), pp.9-18.
[38] Kothari, C.R. (2014). Research methodology, methods and techniques, India: New age International Publishers.
[39] Koumanakos, D.P. (2008). The effect of inventory management on firm performance. International Journal of Productivity and Performance Management, Vol. 57, pp. 355-369.
[40] Kros, J. F., Falasca, M. & Nadler, S. S. (2006). Impact of just-in-time inventory systems on OEM suppliers, Industrial Management and Data systems, Vol. 106(2), pp.224-241.
[41] Kumar,M.,Talib,S.A. and Ramayah,T.(2013).Business Research Methods, Oxford Press, UK
[42] Kurano, T., McKay, K. N. and Black, G. W. (2014). Proactive Inventory Policy Intervention to Mitigate Risk within Cooperative Supply Chains. International Journal of Industrial Engineering Computations, 5, (2), 249-264.
[43] Lwiki, T., Ojera, P.B., Mugenda,N.G., &Wachira, V.K. (2013).The Impact of Inventory Management Practices on Financial Performance of Sugar Manufacturing Firms in Kenya. International Journal of Business, Humanities and Technology, Vol. 3 (5), pp. 75-85.
[44] Lysons K. and Farrington. B (2006), Purchasing & Supply chain Management, 7th edition, London, Person Education Ltd.
[45] Makabira, D. K., &Waiganjo, E. (2014). Role of Procurement Practices on the Performance of Corporate Organizations in Kenya: A Case Study of Kenya National Police Service. International Journal of Academic Research in Business and Social Sciences, 4(10), 369.
[46] Makombe, P. (2015), Inventory Control in the Changing World: The Technology Perspective, A paper Presented at the Procurement and Supply Chain Summit, Kericho, Kenya.
[47] Malhotra N. K, Nunan D and Birks D F (2017), Marketing Research: An applied Approach, Fifth Edition, London, UK, Pearson Education Limited
[48] Mapunda, D. R. (2014). Performance of physical distribution of bank Supplies and its impacts on profitability: A case of CRDB Bank plc. Doctoral dissertation. Mzumbe University
[49] Masaburi, D. J (2006). A Paper presented at the Workshop on Strategic Procurement planning held at Chanika IPS College.
[50] Medard J (2017), Assessment of Inventory Management in Parastatal Organisations in Tanzania: A case of VETA Kigoma, Master’s Thesis Presented to Open University of Tanzania, Dar es Salaam
[51] Mercado, E.D. (2017). Hands - On Inventory Management. New York, London: Taylor and Francis group
[52] Miles, M. B., Huberman, A. M., & Saldaña, J. (2013). Qualitative Data Analysis: A Methods Sourcebook (3rd ed.). New York: SAGE Publications.
[53] Mogere, K., Oloko, M. &Okibo, W. (2013). Effect of Inventory management practices on Operational Performance of Tea Processing Firms: A Case Study of Gianchore Tea Factory, Nyamira County, Kenya. The International Journal of Business & Management, Vol.1 (5), pp.12-27.
[54] Mohamad, S. J., Suraidi, N.N., Rahman, N.N.S. & Suhaimi,R.D.S (2016). A Study on relationship between inventory management and company performance: A case study of textile chain store. Journal of Advanced Management Science, Vol. 4(4), pp. 299-304.
[55] Mohamed, I. A., Evans, K., &Tirimba, O. I. (2015). Analysis of the Effectiveness of Budgetary Control Techniques on Organizational Performance at Dar-Salaam Bank Headquarters in Hargeisa Somali and International Journal of Business Management & Economic Research, Vol. 6(6).
[56] Muchaendepi, W, Mbohwa C, Hamandishe, T and Kanyepe, J (2019), Inventory Management and Performance of SMEs in the Manufacturing Sector of Harare 16th Global Conference on Sustainable Manufacturing - Sustainable Manufacturing for Global Circular Economy
[57] .Mukopi, C. M. &Iravo, A. M. (2015).An Analysis of the Effects of Inventory Management on the Performance of the Procurement Function of Sugar Manufacturing Companies in the Western Kenya Sugar Belt. International Journal of Scientific and Research Publications, Vol. 5(5), pp. 1-13.
[58] Mukopi, C.M. &Iravo, A.M. (2015). An analysis of the effects of inventory management on the performance of the procurement function of sugar manufacturing companies in the Western Kenya Sugar Belt. International Journal of Scientific and Research Publications, Vol. 5(5), pp. 2-14.
[59] Mukopi, C.M., &Iravo, A.M. (2015). An Analysis of the Effects of Inventory Management on the Performance of the Procurement Function of Sugar Manufacturing Companies in the Western Kenya Sugar Belt. International Journal of Scientific and Research Publications, Vol. 5(5), pp. 2-14.
[60] Muma, B. O., Nyaoga, B. R., Matwere, B. R. &Nyambega, E. K. (2014). Green Supply Chain Management and Environmental Performance among Tea Processing Firms in Kericho County, Kenya. International Journal of Economics, Finance and Management Science, Vol. 2(5), pp. 270-276
[61] Mwangi, A.G. (2013). Inventory Management and Supply Chain Performance of Non-Governmental Organizations in the Agricultural Sector, Kenya. Master’s Thesis Presented to University of Nairobi.
[62] Mwangi, W., &Nyambura, M.T. (2015). The role of inventory management on performance of food processing companies: a case study of Crown Foods Limited Kenya. European Journal of Business and Social Sciences, Vol. 4(04), pp. 64-78.
[63] Mwangi, W., &Nyambura, M.T. (2015). The role of inventory management on performance of food processing companies: a case study of Crown Foods Limited Kenya. European Journal of Business and Social Sciences, Vol. 4(4), pp. 64-78.
[64] Neely, A. (2002), Business Performance Measurement: Theory and Practice, Cambridge University Press, UK.
[65] Neumann, C S and Pardini, D (2014), Factor Structure and Construct Validity of the Self-Report Psychopathy (SRP) Scale and the Youth Psychopathic Traits Inventory (YPI) in Young Men, Journal of Personality Disorders, Vol. 28(3), pp. 419–433
[66] Ngei, N.M., &Kihara, A. (2017). Influence of Inventory Management Systems on Performance of Gas Manufacturing Firms in Nairobi City County, Kenya. International Journal of Business & Law Research, Vol. 5(2), pp. 21-39.
[67] Njeru M D, Njeru A, Memba F and Tirimba O I (2015), Effect of cash management on financial performance of deposit Takin: SA000’s in Mount Kenya region, International Journal of Scientific and Research Publications
[68] Odhon’g, E.A., &Omolo, J. (2015). Effect of Human Capital Investment on Organizational Performance of Pharmaceutical Companies in Kenya. Global Journal of Human Resource Management,3 (6),1-29.
[69] Ogbo, A. (2011). Production and operations management. Supply Chain Management: An International Journal. Enugu: De-verge Agencies Ltd. 12(4), 284–296. (2007).
[70] Ogbo, A. I. (2011). Production and operations management. Enugu: De-verge Agencies Ltd
[71] Olhager J (2013), Evolution of operations planning and control: from production to supply chains, International Journal of Production Research, Vol. 51, pp. 32-47
[72] Omondi, D., &Namusonge G. (2015). The Role of Supply Chain Leadership in Retail Institutions‟ Performance: The Case of Nakumatt Holdings Limited, Kenya International Journal of Humanities and Social Science, Vol. 5 (2), pp. 135-142.
[73] Onchoke, B. N., &Wanyoike, D. M. (2016). Influence of Inventory Control Practices on Procurement Performance of Agrochemicals Distributors in Nakuru Central Sub-County, Kenya. International Journal of Economics, Finance and Management Sciences, Vol. 4 (3), pp. 117-126.
[74] Ondyeki Y (2019), An analysis of the management of inventory control system in Tanzania higher education institutions: a case of the Open University of Tanzania Headquators, Master’s Thesis Presented to Open University of Tanzania, Dar es Salaam
[75] Otuya S and Eginiwin E. J (2017), Inventory Management and SMEs Profitability. A Study of Furniture Manufacturing, Wholesale and Eatery Industry in Delta State, Nigeria, Journal of Finance and Accounting, Vol. 5 ( 3),pp. 75-79
[76] Prempeh, K.B. (2015). The impact of efficient inventory management on profitability: evidence from selected manufacturing firms in Ghana. MPRA Paper No. 67889. Available online at https://mpra.ub.uni-muenchen.de/67889.
[77] Ramos E, Pettit T J, Flanigan& M, Romero L and Huayta K (2020), Inventory Management Model Based on Lean Supply Chain to Increase the Service Level in a Distributor of Automotive Sector, International Journal of Supply Chain Management, Vol. 9 (2), pp.113-132
[78] Resnik D. B (2015) What is ethics in research & why is it important, National institute of Environmental Health.
[79] Sarkar B, Mandal, B and Sumon Sarkar S (2017). Preservation of deteriorating seasonal products with stock-dependent consumption rate and shortages. Journal of Industrial & Management Optimization, Vol. 13 (1), pp. 187-206.
[80] Shisia, A., Sang, W., Matoke, J., &Omwario, B. N. (2014). Strategic Innovation and Performance of Public Universities in Kenya.European Journal of Business and Management,6(23),259-269.
[81] Silver, E. A., and Peterson, R (2013). Decision systems for inventory management and production planning. New York, NY: Wiley. [Google Scholar]
[82] Silverman D (2011), Interpreting Qualitative Data: A Guide to the Principles of Qualitative Research, 5th edition, SAGE, Singapore
[83] Sitienei, W. &Memba, F. (2016). The effect of inventory management on profitability of cement manufacturing companies in Kenya: A case study of listed cement manufacturing companies in Kenya. International Journal of Management and Commerce Innovations, Vol. 3(2), pp. 111-119.
[84] Sliver, K. and Peterson, J. (2013), Importance of inventory Management, Journal of Procurement and Research, Vol. 2, pp. 13 – 24.
[85] Tempelmeier, H. (2011). Inventory Management in Supply Networks, 3rd. Edition, Norderstedt (Books on Demand), ISBN 3-8423-4677-8
[86] Thomas J R and Nelson J K (2001), Research Methods in Physical Activity, 4Th Edition,Champaign IL, Haman Kinetics, Routledge, London
[87] Thorpe R and Ellwood P (2010), Challenges and controversies in Management Research, 1stEdition Routledge Publications, London, UK
[88] Toomey, J.W (2010). Inventory Management Principle Concept and Techniques: Materials Management/Logistics Series, Kluwer Academic Publishers, London
[89] Tracy S J (2010), Qualitative Quality: Eight “Big-Tent” Criteria for Excellent Qualitative Research, Sage Journals, New York, USA
[90] Wambua, B. J., Okibo, W. B., Nyang’au, A. &Ondieki, S. M. (2015). Effects of Inventory Warehousing Systems on the Financial Performance of Seventh Day Adventist Institutions: A Case of Adventist Book Centers (ABC), Kenya. International Journalof Business and Management, Vol. 10(4), pp. 259 -264.
[91] Wangari, K.L., Kagiri, A.W. (2015). Influence of Inventory Management Practices on Organizational Competitiveness: A Case of Safaricom Kenya Ltd. International Academic Journal of Procurement and Supply Chain Management, Vol. 1(5), pp. 72-98.
[92] Wilson,J. (2010). Essentials of business research, London: Sage.