Abstract
The South African economy has attached much importance to the attributes of small and medium enterprises (SMEs) to produce jobs, as means to poverty alleviation. Low levels of productivity atre currently a serious challenge facing South African manufacturing SMEs. These SMEs are functioning under the expected manufacturing output levels. Firstly, physical capital, poor physical infrastructure, human resources problems (less efficient in labour), material and finance (overhead costs), and energy represent serious problems facing manufacturing industries among SMEs in developing countries, in particular in South Africa, where low levels of productivity prevail, and SMEs fail to secure the market share globally. Secondly, concerning technological capital, manufacturing industries are experiencing inefficiencies in their businesses due to a lack of innovation management among employees since employees do not have the educational background to use their creativity to operate machines.
Thus, this research investigates and develops a framework that will aid indigenous manufacturing SMEs in improving productivity management in the South African manufacturing industry. Primarily, the research framework modelled the extent to which lead time, quality, operational costs, training and development, technology and innovation management, and leadership practices (which were classified as the exogenous variables) predict indigenous manufacturing SMEs to obtain productivity management. A conceptual integrated holistic productivity management framework was developed based on the theory developed from the literature review. A questionnaire survey was conducted in South Africa to validate the conceptual framework.
Findings on the outcome variables of productivity management of manufacturing SMEs for this study revealed that direct and inter-factor influence of the latent variables of the exogenous constructs predicted the endogenous variable. Thus, nine variables defined the productivity management of manufacturing SMEs outcomes in South Africa. The exogenous variable that contributed mostly to the productivity management of manufacturing SMEs outcomes (endogenous variable) was technology and innovation management.
The output of the study will help the South African manufacturing SMEs in making decisions about the criteria to be given priority in providing the relevant support towards the productivity management of South African manufacturing SMEs in the manufacturing industry.
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Furthermore, the integrated holistic productivity management framework should serve as a guide to ensure that all elements necessary for the South African manufacturing industry, particularly manufacturing SMEs, have been included towards achieving and improving productivity management. The study offers an opportunity for further research to improve the framework developed in this study and possibly refine indicator variables to suit specific manufacturing SMEs.
This study findings recommend that manufacturing SMEs’ desires for achieving efficient productivity management within the South African manufacturing industry could be guided by the productivity management framework developed in this current study. The framework is also recommended for use by privately-owned and government-owned manufacturing SMEs that seek to improve productivity management within the South African manufacturing industry. Likewise, the framework is recommended to manufacturing industry-based researchers who seek to assess the productivity management of manufacturing SMEs firms, particularly in the manufacturing industry of developing countries.