Effect of lean manufactiring on organizational performance: a case of South Nyanza Sugar Company, Awendo Kenya

Abstract

Due to the present business landscape that is characterized by global competition and high cost pressures, both of which have motivated companies to take a global approach to their supply markets, lean manufacturing has become a common practice among organizations worldwide. The purpose of this study was to explore the effect of lean manufacturing on organizational performance in Sony Sugar Company, Awendo, Kenya. The study objectives were to establish the effect of elimination of waste on organizational performance, to examine the effect of intellectual knowledge on organizational performance, to determine the effect of an Andon on organizational performance, to establish the effect of technology adoption on organizational performance in Sony Sugar Company, Awendo, Kenya and to establish the moderating influence of organizational culture on the relationship between lean manufacturing and organizational performance. The study population was 371 who were HoDs, Divisional HoDs and Supervisors of Sony Sugar Company in nine departments with a sample size 79 out of 371 targeted population. The study used correlation research design and questionnaires were used as tools for data collection. Quantitative data was analyzed descriptively using percentage, frequencies, mean and standard deviation. Inferentially, Pearson Correlation coefficient and use multiple regression analysis were used as analysis tools to test for significance among various hypotheses. Quantitative techniques were used to analyze the data with the assistance of SPSS software program version 22. Five hypotheses were formulated and subsequently tested to establish the influence organizational culture. It was therefore concluded that there is a regression relationship between lean manufacturing combined with organizational culture and organizational performance implementation. The study found that elimination of waste; intellectual knowledge; andon and technology adoption were individually predictors of organizational performance with andon being the most significant predictor. The study established that organizational culture was a moderating factor in the study. The results support the current theories related to the study. Consequently, this study provides manufacturing organizations with insights of how they can develop a competitive edge through the implementation of lean manufacturing. This study therefore, recommends that factors associated with lean manufacturing need to be considered by firms in their performance strategic plans as they have significant impact on performance. Both the government, private sector should design a way of empowering the employees on the need to be equipped with lean manufacturing practices so as not to affect its implementation since the finding indicated that the strength of relationship of lean manufacturing and organizational performance depended on organizational culture. Quarterly production and customer satisfaction reports should be filed in order to track the quality of products and services delivered and the extent of customer satisfaction with a view of increasing profit and market share through the application of lean manufacturing practices. Suggestions for further research. A study can be replicated in a larger number of sugar companies and in more counties. This may account for any environmental factors that may exist in any one county and improve the generalization of the results. A study can be carried out to investigate the influence of other factors like “pull” production and lean manufacturing, just-in-time, total quality management and production smoothing on organizational performance