THE CONTRIBUTION OF INVENTORY MANAGEMENT SYSTEM ON PHARMACEUTICAL WAREHOUSE PERFORMANCE: A CASE OF MEDICAL STORE DEPARTMENT (MSD) IN TANZANIA.

Abstract

ABSTRACT The study focused on evaluating the impact of the various inventory systems and inventory risk management on the performance of the Medical Stores Department (MSD) warehouses in Tanzania. Also, under the guidance of Contingency Theory and the Economic Order Quantity (EOQ) theory, the study sought to benchmark the systems in improving the efficiencies of the public pharmaceutical supply chains. For this study, the quantitative research design was the most appropriate design, and the data was collected from the 80 warehouse employees through structured questionnaires, for which a multistage sampling technique that incorporated stratified and simple random sampling was applied. The multiple regression analysis demonstrated that the three factors together accounted for 79.4% of the variance in the performance of the warehouse (R² = 0.794, F = 97.819, p < .001). Each of the three factors: inventory control systems (β = 0.262, p = .010), inventory information systems (β = 0.383, p = .001) and inventory risk management (β = 0.287, p = .001), had statistically significant and positive predictive influence on the performance of the warehouse. As such, this study demonstrated that MSD operational performance is largely influenced by effective stock control systems, and risk management systems and integrated information systems. The results indicate that using EOQ principles minimizes overstocking and reduces stock shortages, while electronic eLMIS systems enhance visibility and accuracy of stock levels. However, limited integration of systems and infrequent training of personnel are still significant. It was also found that managing risks was important to ensure continuity of supplies and protect temperature-sensitive medicines. The study aligns EOQ and Contingency Theory as means to improve efficiency. It is hereby recommended that MSD deepens the EOQ approach by incorporating demand forecasting, integrating eLMIS to procurement and distribution systems, and reinforcing planned risk management approaches with cold chain monitoring, training, and regular staff refresher training. These will promote predictability of medicine availability and enhance stock management across all MSD facilities in Tanzania.