Capacity utilization in Micro and Small Enterprises (MSEs) : The case study of small garment enterprises in the Nairobi city council markets

Abstract

This study concerns micro and small enterprises (MSEs), capacity utilisation decisions and the factors that influence these decisions. MSEs playa special role in the developing countries where they form the largest economic sector by number of employees. This sector is dogged by many constraints such as capital constraints, market and information failures, inappropriate laws caused by inappropriate regulation. Due to these prevalent constraints, a gap has been created between the MSEs and large scale sector. It is believed that it is this "missing middle" that can best drive the engine for rapid industrial and economic development which the country so badly needs. It is in light of this that this study will attempt to look closer into the problems faced by MSEs and a possible solution. Capacity management is an operations strategy which has been considered as a means of assisting MSEs manage their capacity and do things better, thus improving their efficiency. By optimally utilising the existing capacity MSEs stand a chance to improve their efficiency and actually grow without necessarily investing a huge sum of money. Understanding the capacity utilisation decisions they make and the factors that impel them to make such decisions is therefore very crucial.