Relationship between product design, lean manufacturing and operational performance of Sugar firms in Kenya

Abstract

The Sugar Firms in Kenya contribute approximately 26% directly to the Gross Domestic Product (GDP) and an additional 25% indirectly through agro-based and associated industries linkages. However, they have experienced a significant decline of milled sugar production from 523,652 metric tones in 2010 to 440,935 metric tones in 2019 according to in the sugar sub-sector report by Kenya Association of Manufacturers in 2020. This decline was mainly attributed to the high cost of production stemming from inefficiencies across the value chain from inadequate research and extension leading to the design of production systems that are inefficient. Despite the vast contribution of the sugar firms to the economy, this problem of inefficient production system has not been solved and thus the Sugar Firms performance continues to spiral downward leading to the dissolution of some firms, downscaling of operations. The reviewed studies revealed an absence of a clear association among the three variables. They also indicating a weak relationship between product design and operational performance, underscoring the necessity for introducing a lean manufacturing as a moderator to enhance understanding and potentially strengthen the intricate interplay between product design and operational performance. Product design, lean manufacturing, and operational performance practically exist together, since lean manufacturing boosts product design by eliminating waste and consequently elevates operational performance, on the contrary, based on the reviewed studies, there has been an absence of research endeavors aimed at establishing the association of this three variables. It is in this regard that this study purposes to establish the relationship between product design, lean manufacturing, and operational performance of Sugar Firms in Kenya. Specifically this study seeks to determine the effect of product design on operational performance of Sugar Firms in Kenya, to establish the effect of lean manufacturing practices on operational performance of Sugar Firms in Kenya, and to establish the moderating effect of lean manufacturing practices on the relationship between product design and operational performance of Sugar Firms in Kenya. The research was guided by the resource-based view theory and transaction cost theory. This study was guided by a correlational research design. A census survey was conducted targeting all 164 managers and assistant managers of Sugar Firms in Kenya. A pilot study was conducted of 14 participants constituting of managers and assistant managers of seven departments in Transmara Sugar Company to test for reliability using Cronbach‘s alpha, with a threshold of 0.70, indicating satisfactory instrument reliability. The Cronbach's Alpha reliability coefficient obtained in this study was 0.849. Primary data was collected using questionnaires. The study was based on three fundamental ways of assessing the validity of the research instrument which include; criterion, content, and construct. A multiple linear regression model was applied to establish the association among explanatory variables in this study. The results established that product design significantly affects operational performance (β =0.742, p=.000), hence, adoption of product design yields a significant 0.742 unit increase in operational performance for Sugar Firms. Indicating a positive and significant association between the two variables. Lean Manufacturing had a significant positive effect on operational performance (β=0.661, p=0.000), suggesting that the implementation of lean manufacturing practices leads to 0.661 unit increase in operational performance. After incorporating the interaction effect, the R square change was 0.008 (p=0.048), indicating that lean manufacturing statistically moderates the relationship between product design and operational performance by 0.8%. It was concluded that supply chain management played a more prominent role in determining product design compared to digital technologies which had the lowest prevalence in that regard. Consequently, it was concluded that lean manufacturing is a crucial and influential factor in shaping the operational performance of Sugar Firms in Kenya. Finally the study concludes that lean manufacturing plays a significantly moderates relationship between product design and operational performance, providing valuable insights for enhancing these aspects within the manufacturing context of Sugar Firms. Thus, the study recommends that Sugar Firms' Management should focus on maintaining a robust product design while integrating lean manufacturing practices to enhance operational performance. By adopting the provided lean manufacturing model, they can effectively strengthen the relationship between product design and operational performance. This approach is likely to lead to improved overall performance and efficiency in the sugar firms' manufacturing processes. The study may have a significant impact: to the government by aiding in the formulation of policies, to the sugar sub-sector by aiding them to focus on a robust manufacturing system with a paradigm shift from loss marking to profit-making institutions and a hub for the creation of employment and the world of academia may contribute to the increasing body of literature on operations management activities.