Supply chain management practices in the petroleum industry of Zimbabwe.

Abstract

Supply chain management is one of the contemporary management philosophies recommended to companies that seek to improve competitiveness. Supply chain management focuses on cost efficiency, customer satisfaction and systems thinking. This study analyses supply chain management practices in the Zimbabwe petroleum industry. Supply chain management is a nascent concept in Zimbabwe. Zimbabwean petroleum companies are uncompetitive because they have not embraced the supply chain management philosophy or the philosophy is not properly implemented among other reasons. The study analyses the Zimbabwe petroleum industry players based on how they manage supply chain managent activities such as procurement, inventory, logistics, information technology and customer service. It also analyses the industry‟s environment, supply chain strategies, industry structure and challenges. The study uses the robust convergent parallel mixed methods research design to simultaneously and independently collect data aimed to achieve a wider and detailed indepth understanding of factors leading to the Zimbabwe petroleum industry‟s uncompetitiveness. In-depth interviews were hel with six executives from Ministry of Energy and Power Development, Zimbabwe Energy Regulatory Authority and National Oil Iinfrastructure Company of Zimbabwe. Quantitative data was collected through objective questionnaires from fifty seven managers with supply chain management responsibilities in petroleum companies. A regression analysis on supply chain performance establishes that developing effective supply chain management strategies and staff motivation, training and development are the two determinants of supply chain management performance.The results further reveal existence of supply chain management challenges owing to an unfavourable business environment, lack of clear supply chain strategy, lack of foreign currency, weak industry structure, high cost of product, the country‟s poor policy framework, and lack of communication and cooperation among supply chain members. The study recommends that authorities craft and market a supply chain strategy that takes advantage of the country‟s potential to become a regional hub for fuel distribution to countries like Botswana, Zambia and DRC. Government must fix environmental factors that keep investors at bay and threaten de-industrialisation. Industry captains must de-bottle their planning processes; encourage teamwork and strategic alliances among supply chain members. However, the small sample size, data based on one petroleum company and its distributorship and difficulty in generalising results of the study, are some of the study‟s limitations.