Crowdsourcing as a Platform for Operational Performance in Manufacturing Firms in Kenya

Abstract

The use of information technology provides an innovative channel of transforming manufacturing. This is done through the process of outsourcing non-core functions. Firms strive to be providers of high quality goods and services at globally competitive costs. However, for a firm to decide on whether or not to use crowdsourcing as a mechanism of outsourcing the firm has to be assured the strategy will work to improve quality, productivity and timeliness. For manufacturing companies to be globally competitive, crowdsourcing provides a useful solution. This research, therefore, had three objectives: to establish the extent to which manufacturing firms in Nairobi City County have adopted Crowdsourcing; to determine the challenges encountered with crowdsourcing in manufacturing firms in Nairobi City County; and to establish the influence of crowdsourcing on operational performance of manufacturing firms in Nairobi City County. The research was a survey utilizing a sample of 31 manufacturing firms selected using stratified random sampling from a total of 455 registered manufacturing firms. The operations managers of the firms provided the required data by responding to a self-administered questionnaire. The questionnaire required the operations managers to provide both qualitative and quantitative data on crowdsourcing which was the independent variable and operational performance which was the dependent variable. The results show that crowdsourcing is just occasionally used as a method of outsourcing in manufacturing firms. The challenges that face manufacturing firms include maintaining the motivation level of crowd solution providers, managing crowdsourcing participants, loss of control of a firm’s processes to participants, control of the Quality of information technology ideas and solutions and inability of firms to articulate and define the key problems. Crowdsourcing has a great influence on productivity. It reduces maintenance costs, cost of inputs, and number of defective products and improves the quality of supervision. Crowdsourcing has also shortened the innovation chain from idea formulation to product. Product rating has also improved. Crowdsourcing affects product quality through improving customers’ opinion of products, matching the quality produced and the quality that customers expect, quickening the response to quality issues and ensuring get value for their money. However, crowdsourcing has not done much in improving brand ranking and effectiveness in response to quality issues. Crowdsourcing has not done much to improve timeliness of deliveries despite doing well in improving delivery aspects such as matching delivery services and prices charged, ensuring customers always receive orders in right quantities, increased flexibility of addressing quality issues and strict adherence to agreed delivery schedules. From the regression results, productivity contributes positively to operational performance and the contribution is significant. Timeliness and quality activities do not significantly affect operations performance. The research recommends that manufacturing firms should increase their use of crowdsourcing beyond their current occasional use. Steps should be taken to ensure crowdsourcing software allows for the improvement of the level of motivation of the crowd. Crowdsourcing should be encouraged as a mechanism of cost management, timely delivery and quality improvement.