Operational excellence and competitiveness of Kenyan manufacturing firms

Abstract

The operations function of a business plays a critical role in the attainment or sustainment of a competitive advantage in the market. Firms must develop certain core capabilities that enable them create more customer value than their competitors by balancing product cost with product quality and delivery flexibility with delivery speed thus achieving operational excellence. This study sought to determine the process-based and system-based capabilities employed by Kenyan manufacturing firms, to model operational excellence in terms of these capabilities and to determine how operational excellence as a concept influences customer value perception as an indicator of competitiveness. Self-administered questionnaires were used to collect data from a sample of 51 manufacturing firms obtained through stratified random sampling from the Manufacturers and Exporters Directory list of the Kenya Association of Manufacturers. A test of mean differences was used to determine the process-based and system-based capabilities emphasized by sampled firms. Multiple regression was used to model operational excellence in terms of process-based and system-based capabilities and liner regression was be used to determine the relationship between operational excellence and customer value perception. A test for goodness of fit was used to assess the validity of the relationships established from both multiple regression and linear regression.