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