International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue I, January 2022 | ISSN 2454–6186

The Effect of Inventory Control Systems on Organisational Performance in The Mining Sector of Zimbabwe.

Dumisani Mawonde and Casper Demberere
Bindura University of Science Education, Bindura, Zimbabwe

Abstract: The aim of this study was to determine the effect of inventory control systems on organisational performance in the mining sector of Zimbabwe. A quantitative survey approach was used and a sample of 203 mining companies was used for data analysis. Structural Equation Modelling (SEM) was run in Analysis for Moment Structures (AMOS) version 22 to test the formulated hypotheses. The findings of the study were that, inventory control systems have both positive direct and positive indirect effect on organisational performance. The study concluded that, inventory control systems have a positive effect on organisational performance in the mining sector of Zimbabwe. The study recommended mining companies in Zimbabwe to implement modern computerised inventory control systems for effective inventory management in order to enhance organisational performance.

Key words: inventory, inventory control systems, organisational performance.

I. INTRODUCTION

Inventory control systems are effective in maintaining optimum inventory levels in firms to avoid either the shortage of stock or to reduce excess inventories. Most mining companies in Zimbabwe are inefficient because they use primitive inventory control systems such as spreadsheets and other manual processes to manage, reconcile and report their inventories (Zuva & Choga, 2016).
The mining sector is one of the key drivers of the economy as it ranks among the top three contributors of Gross Domestic Product (GDP), (Zimbabwe Economic Report, 2018).So, the importance of improving the performance of mining companies cannot be overlooked.As the economy is deteriorating due to fiscal and monetary misalignments and chronic foreign currency shortages, there are massive shortages of spare parts and materials in the local market that mining companies succumb to inventory shortages and this is disturbing mining operations. For that reason, many mining companies are buying inventories in large quantities from foreign markets in order to manage the volatility of prices and exchange rates (Zimbabwe Economic Report, 2018). Therefore, the use of efficient inventory control systems in the mining companies is deemed to facilitate the timely delivery of spares parts and the effective management of available inventories in order to service the mining machinery and equipment so as to avoid unnecessary breakdowns and keep the mining operations running.