The relationship between manufacturing strategy and operational performance within the metal & allied sector in Kenya

Abstract

The purpose of this study was to establish the relationship between manufacturing strategy and operational performance among firms in the metals and allied sector. It sought to find out which manufacturing strategies are used, which factors were considered when choice of manufacturing strategy was made and whether there exists a relationship between manufacturing strategy and operational performance. A descriptive study based on a census research design was conducted using structured questionnaires to collect data from operations/factory managers or their equivalents in 71 Kenyan manufacturing firms in the metals and allied sector. Descriptive statistics was used to analyze and determine the formality of the manufacturing strategy formulation process, participants in the formulation process, manufacturing strategies used in terms of competitive priorities and critical decisions relating to the design of process and infrastructure. A multiple regression model was used to evaluate the overall relationship between manufacturing strategy and operational performance. The findings showed that manufacturing strategy formulation followed a formal process with both top down and bottom up participation thus ensuring that the capabilities and competencies of the organization along with inputs from lower managers were factored in when developing the manufacturing strategy, the top seven manufacturing strategies were; manufacturing with consistent quality and low defects, giving focus on increasing delivery reliability, improve product performance and reliability, reducing overhead costs, implementation of quality circles, reduction in manufacturing lead time and improving delivery speed and suggested the presence of trade-offs with quality and delivery focus as the dominant manufacturing priorities, the firms placed infrastructural decisions such as sustainable competitive advantage and quality assurance ahead of structural decisions such as capacity and that the firms have adopted manufacturing strategies based on four major factors or components; competitiveness, customer focus, internal capabilities and manufacturing excellence. Multiple regression analysis results showed that there is a positive relationship between manufacturing strategy and operational performance in Kenyan manufacturing firms in the metals and allied sector. This study has provided insights into the extent of adoption of manufacturing strategy in Kenyan manufacturing firms and provides further evidence that implementation of manufacturing strategy is significant in enhancing operational performance improvement