Adapting to Thrive: Operation Management Capabilities and Flexibility Effects on Procurement Performance among Manufacturing Firms in Ghana

Joseph Kwasi AGBEKA; Bismark Stephen KUMAH; Mawuli SENANU; Sampson AFRIFA JNR

Authors

Joseph Kwasi AGBEKA Evangelical Presbyterian University College https://orcid.org/0009-0009-0749-5900
Bismark Stephen KUMAH Ghana Grid Company Limited https://orcid.org/0009-0009-2334-6411
Mawuli SENANU Ikern Institute for Tax Policy and Research
Sampson AFRIFA JNR Central University of Technology https://orcid.org/0000-0002-1693-1200

Keywords:

strategic capability; process efficiency capability; process integration capability; strategic flexibility; procurement performance; manufacturing firms

Abstract

This study examined the direct and moderating relationships between operational management capabilities, specifically process efficiency capability, process integration capability, operational flexibility and procurement performance among manufacturing firms in Ghana. The study adopted a quantitative cross-sectional survey design. A total of three hundred and fifty (350) procurement officials from fifty (50) manufacturing firms were selected for the study. Stratified and purposive sampling techniques were used in the selection of manufacturing firms and procurement officials, respectively. Questionnaires were used in the data collection, and data were analyzed using Partial Least Squares (PLS) Structural Equation Modelling (SEM). For direct effects, the study showed that a non-significant positive relationship exists between process integration capability and procurement performance. However, a significant positive relationship was found to exist between process efficiency capability and procurement performance. The study also found that operational flexibility does not moderate the relationship between process integration capability and procurement performance. Meanwhile, operational flexibility negatively moderates the relationship between process efficiency capability and procurement performance among manufacturing firms in Ghana. The results of the study highlight the importance of developing robust process efficiency capabilities for improved procurement outcomes, while also suggesting a careful balance in operational flexibility initiatives to avoid inefficiencies among manufacturing firms. The study contributes to the dynamic capabilities theory and provides practical implications for manufacturing firms seeking to optimize their procurement strategies.

References

Afum, E., Agyabeng-Mensah, Y., Acquah, I. S. K., Baah, C., Dacosta, E., Owusu, C. S., & Amponsah Owusu, J. (2021). Examining the links between logistics outsourcing, company competitiveness and selected performances: The evidence from an emerging country. The International Journal of Logistics Management, 32(3), 1068-1090. https://doi.org/10.1108/IJLM-05-2020-0205

Agbeka, E. K., Quagrainie, F. A., & Kabalan, A. A. M. (2024). Procurement practices and operational performance: A study of linear and curvilinear relationships in a developing economy. Journal of Public Procurement, 24(3), 320-347. https://doi.org/10.1108/JOPP-01-2024-0010

Ahmadi, J., & Letter, T. (2021). The impact of IT capability on company performance: The mediating role of business process management capability and supply chain integration capability. Journal of Social, Management and Tourism Letter, 2021(1), 1-16.

Alsamarraie, M. M., & Ghazali, F. (2023). Evaluation of organizational procurement performance for public construction projects: Systematic review. International Journal of Construction Management, 23(14), 2499-2508. https://doi.org/10.1080/15623599.2022.2070447

Amoako-Gyampah, K., Boakye, K. G., Adaku, E., & Famiyeh, S. (2019). Supplier relationship management and firm performance in developing economies: A moderated mediation analysis of flexibility capability and ownership structure. International Journal of Production Economics, 208, 160-170. https://doi.org/10.1016/j.ijpe.2018.11.021

Amoako-Gyampah, K., Boakye, K. G., Famiyeh, S., & Adaku, E. (2020). Supplier integration, operational capability and firm performance: An investigation in an emerging economy environment. Production Planning & Control, 31(13), 1128-1148. https://doi.org/10.1016/j.ijinfomgt.2020.102195Get rights and content

Anderson, D. M. (2020). Design for manufacturability: How to use concurrent engineering to rapidly develop low-cost, high-quality products for lean production. Productivity Press. https://doi.org/10.4324/9780429285981

Anning-Dorson, T. (2021). Organizational culture and leadership as antecedents to organizational flexibility: Implications for SME competitiveness. Journal of Entrepreneurship in Emerging Economies, 13(5), 1309-1325. https://doi.org/10.1108/JEEE-08-2020-0288

Appiah, M., Gyamfi, B. A., Adebayo, T. S., & Bekun, F. V. (2023). Do financial development, foreign direct investment, and economic growth enhance industrial development? Fresh evidence from Sub-Sahara African countries. Portuguese Economic Journal, 22(2), 203-227. https://doi.org/10.1007/s10258-022-00207-0

Asamoah, D., Agyei-Owusu, B., Andoh-Baidoo, F. K., & Ayaburi, E. (2021). Inter-organizational systems use and supply chain performance: Mediating role of supply chain management capabilities. International Journal of Information Management, 58, 102195. https://doi.org/10.1016/j.ijinfomgt.2020.102195

Bag, S., Wood, L. C., Mangla, S. K., & Luthra, S. (2020). Procurement 4.0 and its implications on business process performance in a circular economy. Resources, Conservation and Recycling, 152, 104502. https://doi.org/10.1016/j.resconrec.2019.104502

Benah, S., & Li, Y. (2020). Examining the relationship between lean supplier relationship management (LSRM) and Firm Performance: A study on manufacturing companies in Ghana. Open Journal of Business and Management, 8(06), 2423. DOI10.4236/ojbm.2020.86150

Bienhaus, F., & Haddud, A. (2018). Procurement 4.0: factors influencing the digitisation of procurement and supply chains. Business Process Management Journal, 24(4), 965-984. https://doi.org/10.1108/BPMJ-06-2017-0139

Bleady, A., Ali, A. H., & Ibrahim, S. B. (2018). Dynamic capabilities theory: pinning down a shifting concept. Academy of Accounting and Financial Studies Journal, 22(2), 1-16.

Butt, J. (2020). A conceptual framework to support digital transformation in manufacturing using an integrated business process management approach. Designs, 4(3), 17. https://doi.org/10.3390/designs4030017

Changalima, I. A., & Mdee, A. E. (2023). Procurement skills and procurement performance in public organizations: The mediating role of procurement planning. Cogent Business & Management, 10(1), 2163562. https://doi.org/10.1080/23311975.2022.2163562

Chaudhuri, A., Boer, H., & Taran, Y. (2018). Supply chain integration, risk management and manufacturing flexibility. International Journal of Operations & Production Management, 38(3), 690-712. https://doi.org/10.1108/IJOPM-08-2015-0508

Chenini, A., Iqbal, J., Qurrahtulain, K., Husain Mahmood, M. A., & Aldehayyat, J. S. (2021). Strategic procurement, supplier integration, and speed‐to‐market: The mediating role of procurement lead‐time performance and manufacturing performance. Journal of Public Affairs, 21(3), e2248. https://doi.org/10.1002/pa.2248

Dadzie, E. B., Amoah, J., Egala, S. B., Keelson, S. A., & Jibril, A. B. (2024). The impact of procurement training on procurement process efficiency and organizational performance: A PLS-SEM analysis. International Journal of Entrepreneurial Knowledge, 12(1), 24-42. https://doi.org/10.37335/ijek.v12i1.228

Domenek, A. C., Moori, R. G., & Vitorino Filho, V. A. (2022). The mediating effect of operational capabilities on operational performance. Management Magazine, 29(4), 350-366. https://doi.org/10.1108/REGE-01-2021-0016

Donkor, F., Papadopoulos, T., & Spiegler, V. (2024). Supply chain integration and supply chain sustainability relationship: A qualitative analysis of the UK and Ghana pharmaceutical industry. Production Planning & Control, 35(6), 535-558. https://doi.org/10.1080/09537287.2022.2105762

Farida, N., Joseph, N., Sheila, N., Levi, K., & Moses, M. (2024). Asset specificity, relational governance, firm adaptability and supply chain integration. Modern Supply Chain Research and Applications, 6(1), 2-30. https://doi.org/10.1108/MSCRA-09-2022-0021

Fisher, O., Watson, N., Porcu, L., Bacon, D., Rigley, M., & Gomes, R. L. (2018). Cloud manufacturing is a sustainable process manufacturing route. Journal of Manufacturing Systems, 47, 53-68. https://doi.org/10.1016/j.jmsy.2018.03.005

Gorondutse, A. H., Arshad, D., & Alshuaibi, A. S. (2021). Driving sustainability in SMEs’ performance: The effect of strategic flexibility. Journal of Strategy and Management, 14(1), 64-81. https://doi.org/10.1108/JSMA-03-2020-0064

Gregory, G. D., Ngo, L. V., & Karavdic, M. (2019). Developing e-commerce marketing capabilities and efficiencies for enhanced performance in business-to-business export ventures. Industrial Marketing Management, 78, 146-157. https://doi.org/10.1016/j.indmarman.2017.03.002

Gremme, K. M., & Wohlgemuth, V. (2017). Dynamic capabilities: a systematic literature review of theory and practice. European Journal of Management Issues, 25(1), 30-35. https://doi.org/10.15421/191705

Hair, J. F., Astrachan, C. B., Moisescu, O. I., Radomir, L., Sarstedt, M., Vaithilingam, S., & Ringle, C. M. (2021). Executing and interpreting applications of PLS-SEM: Updates for family business researchers. Journal of Family Business Strategy, 12(3), 100392. https://doi.org/10.1016/j.jfbs.2020.100392

Hair, J., & Alamer, A. (2022). Partial Least Squares Structural Equation Modelling (PLS-SEM) in second language and education research: Guidelines using an applied example. Research Methods in Applied Linguistics, 1(3), 100027. https://doi.org/10.1016/j.rmal.2022.100027

Hallikas, J., Immonen, M., & Brax, S. (2021). Digitalizing procurement: The impact of data analytics on supply chain performance. Supply Chain Management: An International Journal, 26(5), 629-646. https://doi.org/10.1108/SCM-05-2020-0201

Hamidu, Z., Boachie-Mensah, F. O., & Issau, K. (2023). Supply chain resilience and performance of manufacturing firms: Role of supply chain disruption. Journal of Manufacturing Technology Management, 34(3), 361-382. https://doi.org/10.1108/JMTM-08-2022-0307

Han, Y., Chong, W. K., & Li, D. (2020). A systematic literature review of the capabilities and performance metrics of supply chain resilience. International Journal of Production Research, 58(15), 4541-4566. https://doi.org/10.1080/00207543.2020.1785034

Hou, C. K. (2020). The effects of IT infrastructure integration and flexibility on supply chain capabilities and organizational performance: An empirical study of the electronics industry in Taiwan. Information Development, 36(4), 576-602. https://doi.org/10.1177/02666669198843

Irfan, M., Wang, M., & Akhtar, N. (2020). Enabling supply chain agility through process integration and supply flexibility: Evidence from the fashion industry. Asia Pacific Journal of Marketing and Logistics, 32(2), 519-547. https://doi.org/10.1108/APJML-03-2019-0122

Ivanov, D., Tsipoulanidis, A., Schönberger, J., Ivanov, D., Tsipoulanidis, A., & Schönberger, J. (2021). Basics of supply chain and operations management. Springer International Publishing. https://doi.org/10.1007/978-3- 030-72331-6_1

Jaboob, A. S., Awain, A. M., Ali, K. A., & Mohammed, A. M. (2024). Introduction to Operation and Supply Chain Management for Entrepreneurship. In K. Kankaew, P. Nakpathom, A. Chnitphattana, K. Pitchayadejanant, & S. Kunnapapdeelert (Eds.), Applying Business Intelligence and Innovation to Entrepreneurship (pp. 52-80). IGI Global Scientific Publishing. https://doi.org/10.4018/979-8-3693-1846-1.ch004

Jorde, T. M., & Teece, D. J. (1990). Innovation and cooperation: Implications for competition and antitrust. Journal of Economic Perspectives, 4(3), 75-96. https://doi.org/10.1257/jep.4.3.75

Jum'a, L., & Bushnaq, M. (2024). Investigating the role of flexibility as a moderator between supply chain integration and firm performance: The case of manufacturing sector. Journal of Advances in Management Research, 21(2), 203-227. https://doi.org/10.1108/JAMR-07-2023-0188

Kakwezi, P., & Nyeko, S. (2019). Procurement processes and performance: Efficiency and effectiveness of the procurement function. International Journal of Social Sciences Management and Entrepreneurship (IJSSME), 3(1) 172-182.

Kimario, H. F., & Mwagike, L. R. (2024). Buyer–supplier collaboration's commitment. An antecedent for procurement performance of large manufacturing entities in Tanzania. Benchmarking: An International Journal, 31(2), 535-557. https://doi.org/10.1108/BIJ-03-2022-0174

Kimario, H. F., & Kira, A. R. (2024). Cause – effect relationship of trust of buyer – suppliers' integration on procurement performance in large manufacturing firms in Tanzania. Journal of Global Operations and Strategic Sourcing, 17(4), 708-729. https://doi.org/10.1108/JGOSS-12-2021-0101

Kumar, V., Jabarzadeh, Y., Jeihouni, P., & Garza-Reyes, J. A. (2020). Learning orientation and innovation performance: The mediating role of operations strategy and supply chain integration. Supply Chain Management: An International Journal, 25(4), 457-474. https://doi.org/10.1108/SCM-05-2019-0209

Li, Y., Wang, C., Li, G., Wang, J., Zhao, D., & Chen, C. (2020). Improving operational flexibility of integrated energy system with uncertain renewable generations considering thermal inertia of buildings. Energy Conversion and Management, 207, 112526 https://doi.org/10.1016/j.enconman.2020.112526.

Liu, Y., Guo, M., Han, Z., Gavurova, B., Bresciani, S., & Wang, T. (2024). Effects of digital orientation on organizational resilience: A dynamic capabilities perspective. Journal of Manufacturing Technology Management, 35(2), 268-290. https://doi.org/10.1108/JMTM-06-2023-0224

Lysons, K., & Farrington, B. (2020). Procurement and supply chain management. Pearson UK.

Mandala, N. O., Renson, A. I., & Kipketer, T. S. (2024). The impact of technology adoption on efficiency and transparency in public procurement processes in Kenya. European Scientific Journal, 25, 483. https://esipreprints.org/index.php/esipreprints/article/view/769

Mora-Monge, C. A., Fatoki, J., Arslan, F., & Rauniar, R. (2023). Exploring drivers of business performance in web-enabled supply chains: The role of web technology training and supply chain integration. Journal of Enterprise Information Management, 36(4), 1135-1157. https://doi.org/10.1108/JEIM-09-2022-0318

Najafi-Tavani, S., Najafi-Tavani, Z., Naudé, P., Oghazi, P., & Zeynaloo, E. (2018). How collaborative innovation networks affect new product performance: Product innovation capability, process innovation capability, and absorptive capacity. Industrial Marketing Management, 73, 193-205. https://doi.org/10.1016/j.indmarman.2018.02.009

Ndone, J. E. (2023). Strategies to Reduce the Impact of Disruptions on Manufacturing Transportation Supply Chains. Walden University.

Nyamah, E. Y., Feng, Y., Yeboah Nyamah, E., Opoku, R. K., & Ewusi, M. (2023). Procurement process risk and performance: Empirical evidence from manufacturing firms. Benchmarking: An International Journal, 30(1), 75-101. https://doi.org/10.1108/BIJ-06-2021-0306

Odutola, A. (2022). Advanced procurement analytics: Building a model for improved decision making and cost efficiency within global supply chains. International Journal of Scientific and Management Research, 5(1), 273-286. http://doi.org/10.37502/IJSMR.2022.5623

Osei, M. A., Appiah, N. A., Adala, C. E., Asinyo, B. K., & Howard, E. K. (2023). Globalisation and its impact on operational flexibility drive and the performance of Ghana’s small and medium-scale garment enterprises. African Journal of Applied Research, 9(2), 210-221. https://doi.org/10.26437/ajar.v9i2.583

Pisano, G. P. (1994). Knowledge, integration, and the locus of learning: An empirical analysis of process development. Strategic Management Journal, 15(S1), 85-100. https://doi.org/10.1002/smj.4250150907

Pisano, G. P. (2015). A normative theory of dynamic capabilities: Connecting strategy, know-how, and competition (Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 16-036). SSRN. https://doi.org/10.2139/ssrn.2667018

Prajogo, D., Toy, J., Bhattacharya, A., Oke, A., & Cheng, T. C. E. (2018). The relationships between information management, process management and operational performance: Internal and external contexts. International Journal of Production Economics, 199, 95-103. https://doi.org/10.1016/j.ijpe.2018.02.019

Rai, A., Arikan, I., Pye, J., & Tiwana, A. (2015). Fit and misfit of plural sourcing strategies and IT-enabled process integration capabilities. MIS Quarterly, 39(4), 865-886. https://www.jstor.org/stable/26628655

Rajaguru, R., & Matanda, M. J. (2019). Role of compatibility and supply chain process integration in facilitating supply chain capabilities and organizational performance. Supply Chain Management: An International Journal, 24(2), 301-316. https://doi.org/10.1108/SCM-05-2017-0187

Rajesh, R. (2021). Flexible business strategies to enhance resilience in manufacturing supply chains: An empirical study. Journal of Manufacturing Systems, 60, 903-919. https://doi.org/10.1016/j.jmsy.2020.10.010

Rorich, G. M. (2015). Relationship between E-tendering and procurement performance among County Governments in Kenya. Science Innovation, 3(5), 46-51. https://doi.org/10.11648/j.si.20150305.11

Saragih, J., Tarigan, A., Pratama, I., Wardati, J., & Silalahi, E. F. (2020). The impact of total quality management, supply chain management practices and operations capability on firm performance. Polish Journal of Management Studies, 21(2), 384-397. https://doi.org/10.17512/pjms.2020.21.2.27

Sarfo, C., Fakhar Manesh, M., & Caputo, A. (2024). Exploitative and exploratory search: Dynamic capabilities enhancing SME adaptation, new product development, and environmental performance. Journal of Small Business Management, 1-30. https://doi.org/10.1080/00472778.2024.2418026

Shee, H., Miah, S. J., Fairfield, L., & Pujawan, N. (2018). The impact of cloud-enabled process integration on supply chain performance and firm sustainability: The moderating role of top management. Supply Chain Management: An International Journal, 23(6), 500-517. https://doi.org/10.1108/SCM-09-2017-0309

Shuen, A., & Sieber, S. (2009). Orchestrating the new dynamic capabilities. IESE Insights, Fourth Quarter 3, 58-65.

Shukor, A. A. A., Newaz, M. S., Rahman, M. K., & Taha, A. Z. (2021). Supply chain integration and its impact on supply chain agility and organizational flexibility in manufacturing firms. International Journal of Emerging Markets, 16(8), 1721-1744. https://doi.org/10.1108/IJOEM-04-2020-0418

Sousa, S., Rodrigues, N., & Nunes, E. (2018). Evolution of process capability in a manufacturing process. Journal of Management Analytics, 5(2), 95-115. https://doi.org/10.1080/23270012.2018.1436988

Srimarut, T., & Mekhum, W. (2020). The impact of compatibility on the process integration of the supply chain in improving firm performance: The mediating effect of information technology capability. International Journal of Supply Chain Management, 9(1), 155-167. https://doi.org/10.59160/ijscm.v9i1.4288

Swink, M., & Schoenherr, T. (2015). The effects of cross‐functional integration on profitability, process efficiency, and asset productivity. Journal of Business Logistics, 36(1), 69-87.https://doi.org/10.1111/jbl.12070

Tabachnick, B. G., & Fidell, L. S. (2019). Using Multivariate Statistics (7th ed.). Pearson.

Tabrizi, B., Lam, E., Girard, K., & Irvin, V. (2019). Digital transformation is not about technology. Harvard Business Review, 13(March), 1-6.

Tavakol, M., & Wetzel, A. (2020). Factor Analysis: a means for theory and instrument development in support of construct validity. International Journal of Medical education, 11, 245. https://doi.org/10.5116/ijme.5f96.0f4a

Teece, D. J. (2018). Dynamic capabilities as (workable) management systems theory. Journal of Management & Organization, 24(3), 359-368. https://doi.org/10.1017/jmo.2017.75

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z

Wagner, S. M., Grosse-Ruyken, P. T., & Erhun, F. (2018). Determinants of sourcing flexibility and its impact on performance. International Journal of Production Economics, 205, 329-341. https://doi.org/10.1016/j.ijpe.2018.08.006

Wang, C. L., Senaratne, C., & Rafiq, M. (2015). Success traps, dynamic capabilities and firm performance. British Journal of Management, 26(1), 26-44. https://doi.org/10.1111/1467-8551.12066

Wei, C. S. (2014). Measuring performance of management process: Efficiency, capability, cost and maturity. Human Systems Management, 33(4), 171-179. https://doi.org/10.3233/HSM-140820

Wilden, R., Devinney, T. M., & Dowling, G. R. (2016). The architecture of dynamic capability research identifying the building blocks of a configurational approach. Academy of Management Annals, 10(1), 997-1076. https://doi.org/10.5465/19416520.2016.1161966

Yousuf, A., Lorestani Zeynvand, V., Felfoldi, J., Zatonatska, T., Kozlovskyi, S., & Dluhopolskyi, O. (2021). Companies’ performance management: The role of operational flexibility. Marketing and Management of Innovations, 1, 30-37. http://doi.org/10.21272/mmi.2021.1-03

Yu, K., Luo, B. N., Feng, X., & Liu, J. (2018). Supply chain information integration, flexibility, and operational performance: An archival search and content analysis. The International Journal of Logistics Management, 29(1), 340-364. https://doi.org/10.1108/IJLM-08-2016-0185

Yu, W., Zhao, G., Liu, Q., & Song, Y. (2021). Role of big data analytics capability in developing integrated hospital supply chains and operational flexibility: An organizational information processing theory perspective. Technological Forecasting and Social Change, 163, 120417. https://doi.org/10.1016/j.techfore.2020.120417

Zhou, J., Hu, L., Yu, Y., Zhang, J. Z., & Zheng, L. J. (2024). Impacts of IT capability and supply chain collaboration on supply chain resilience: empirical evidence from China in COVID-19 pandemic. Journal of Enterprise Information Management, 37(2), 777-803. doi.org/10.1108/JEIM-03-2022-0091

Zhou, K. Z., & Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic Management Journal, 31(5), 547–561. https://doi.org/10.1002/smj.830

Zhu, X., Zhao, Q., & Yao, X. (2024). How inventory flexibility affects productivity: the moderating roles of digital transformation and supply chain concentration. Journal of Manufacturing Technology Management, 35(8), 1554-1580. https://doi.org/10.1108/JMTM-03-2024-0110

Zimmermann, R., Ferreira, L. M. D., & Moreira, A. C. (2020). How supply chain strategies moderate the relationship between innovation capabilities and business performance. Journal of Purchasing and Supply Management, 26(5), 100658. https://doi.org/10.1016/j.pursup.2020.100658

Adapting to Thrive: Operation Management Capabilities and Flexibility Effects on Procurement Performance among Manufacturing Firms in Ghana

Authors

Keywords:

Abstract

References

Downloads

Published

How to Cite

Issue

Section

License

Information