Effectiveness of production techniques on company performance: A case of fertiliser companies in Zimbabwe

Abstract

This study investigated the effectiveness of production techniques on the performance of companies using a case study of the fertilizer manufacturing industry in Zimbabwe. The study measured the effectiveness of production techniques by the capacity utilization, machine downtimes and defective rate, which were then tested if they affect profitability (return on assets) of firms. The study also aimed at investigating the levels of capacity utilization, machine downtimes and defective rate in the fertilizer manufacturing industry in Zimbabwe, as well as investigating the factors affecting these variables. Primary data collected with the help of interview guides, and secondary data were used and analysed with the help of frequency tables, graphs and the Ordinary Least Squares technique. The study found out that the level of capacity utilisation was below 50 percent, defective rate was below 10 percent and machine downtimes were close to 50 percent. It was also established that, these factors were influenced by the level of capitalisation, level of effective demand, availability of electricity, availability of fuel, and quality, price and availability of raw materials. Regarding the impact of capacity utilization, defective rate and machine down times on profitability of fertilizers producing firms, the study found out their impacts are positive, negative and negative, respectively. Based on these findings, the study recommended the Government to craft policies that reduce costs of utilities to industries, through offering low-cost utilities like electricity, water, fuel and guarantee of such utilities to be constantly available.The study also recommended that policy makers should capacity manufacturing industries through assisting manufacturing firms to import their key raw materials by helping them in obtaining foreign currency at concessionary rate