Benchmarking inventory management practices and organizational performance

Abstract

Purpose Given the critical role of public healthcare performance in safeguarding human lives, effective inventory management is essential for ensuring cost efficiency, product availability, and service quality rather than profit generation. Drawing on Control Theory and the Resource-Based View, this study examines how inventory management determinants influence organizational performance in public-sector healthcare facilities in a developing economy, thereby contributing to theory by clarifying the role of inventory management as a capability and control mechanism linking organizational practices to performance outcomes. Design/methodology/approach A quantitative approach was employed to test the hypotheses using survey data collected from 200 inventory managers working in public healthcare facilities in Pakistan during 2022, with Structural Equation Modeling conducted using Analysis of Moment Structures (AMOS). Findings The results suggest that six direct and four mediation hypotheses are supported. Furthermore, the findings revealed that each disruptive factor has a significant positive effect on inventory management and organizational performance, with inventory management fully mediating these relationships. The study illustrated that implementing standard operating procedures, integrated management systems, employing competent employees, maintaining stock availability, and ensuring inventory accuracy can minimize costs and reduce the average patient bed occupancy rate. Research limitations/implications This study advances theory by integrating study variables with inventory management (IM) and organizational performance (OP), highlighting IM’s mediating role through SEM and extending Control Theory and the Resource-Based View. Organizationally, the model explains 63% of OP, emphasizing the importance of standardized procedures, Information and Communication Technology integration, and staff proficiency in improving inventory efficiency and service quality. The study also offers a benchmarking framework applicable across healthcare, service, and manufacturing sectors to guide performance improvement. Originality/value This study integrates Control Theory and the Resource-Based View within an explicit, evidence-based benchmarking design to examine inventory management and organizational performance in public healthcare. Using multidimensional comparative analysis, the study identifies performance gaps and best-practice configurations across facilities that differ in digital integration, staff proficiency, inventory management effectiveness, and facility type. By moving beyond single-sample analysis, the study provides transferable benchmarking insights and actionable guidance for enhancing performance in resource-constrained public-sector healthcare systems.