Operations Planning and Performance of Motor Vehicle Assessment Firms in Nairobi

Abstract

Operations planning make the needs of the business strategy specific to the operations function by focusing on the right competitive priorities. The study sought to investigate the influence of operations planning on firm performance among motor vehicle assessment firms in Nairobi. The study adopted a descriptive survey research design and was guided by the following objectives: to identify the various operations planning practices adopted by motor vehicle assessment firms in Nairobi; and to establish the relationship between operations planning practices and firm performance among motor vehicle assessment firms in Nairobi. Both secondary and primary data was utilized in the study. Primary data was collected using a semi-structured questionnaire. Secondary data was obtained from the annual financial and corporate reports of the firms. The respondents in the study were managers of the motor vehicle assessment firms. A census approach was applied in the study in which case, the sampling frame consisted of all the 101 motor vehicle assessment firms Nairobi County. A 5-point Likert scale was used to measure the output of each item answered by the participants. Descriptive statistics was used to describe and analyse the variables numerically. Using SPSS version 21 package, a Multivariate regression model was used to analyse the relationship between operations planning and firm performance among the motor vehicle assessment firms in Nairobi. The outcome of the study establishes a near perfect positive relationship between operations planning and firm performance with a Coefficient of Multiple Determination (R2) of 0.877 implying that up to 87.7% of the variation in the firm performance of motor vehicle assessment firms in Nairobi can be attributed to the operations planning practices they have adopted over time. The p-value of 0.001 indicates that the impact of operations planning on firm performance is significant at the 95% confidence level among the motor vehicle assessment firms in Nairobi. The study recommends that local firms implement operation planning to enhance their dynamic capability through operations efficiency. This is further supported by the fact that the study revealed a number of key operations planning drivers which could be making the local firms less competitive. At policy level, there is need for government and other key stakeholders keen on building a viable motor industry to focus on creating impetus to encourage operations planning including operation performance recognition and rewards systems. It is clear that a study of this magnitude should include a survey of sizeable number of firms. However time and material resources did not make this feasible and for this reason the study concentrated on the motor vehicle assessment firms in Nairobi County. Due to the sensitivity of firm performance matters, some of the respondents were non-committal posing major challenge in the field during the data collection. The study recommends further studies involving confirmatory factor analysis to further test the model so established and to confirm the findings of the study. In the same context, there is need for further research to focus on the critical success factors in the adoption of best practices in operations planning.