CAPACITY MANAGEMENT STRATEGIES AND OPERATIONAL PERFORMANCE OF SUGAR MANUFACTURING FIRMS IN KENYA

Purpose: This study was set out to determine the capacity management strategies adopted by the sugar manufacturing firms in Kenya alongside the relationship between these firms' capacity management strategies and their operational performance. Design/Research method: Census survey study design was employed in the research in which all the entire population of the sugar-manufacturing firms were considered. Eleven sugar-manufacturing firms currently operational were sampled. Data was collected using structured questionnaires and the selection of respondents from each of these firms was non-probabilistic where the sample frame was selected based on their mandate and specialized knowledge in operations management. Finding: From the results obtained in this study, all the sugar firms in Kenya operated below their installed capacity and have adopted a mechanistic form of organization structure. Match (Chase) capacity management strategy emerged to be the most common strategy within the sugar firms in Kenya; this was closely followed by lead capacity management strategy. On challenges for the firms to effectively utilize their capacity, inadequate material supply, high cost of farm inputs and poor plant maintenance scheduling emerged to be the most outstanding factors. Limitation: The major limitation of the study is that it financial performance from all the firms was confidential and was not provided. Data on current capacity utilization and efficiency also proved difficult to be reported. Implication: To gain the sector productivity and hence competitiveness, this study recommends for sufficient funding through grants and loan schemes for technology enhancement, alignment of the existing policies that governs the sector supply chain to create an enabling business environment and spur growth.