The relevance of operational skills towards business sustainability: A focus on SMME manufacturers in the Vaal triangle region

Abstract

Purpose: Activities in the manufacturing sector are often considered the bedrock of an economy and a key driver of growth and development. Within the South African manufacturing sector, operations skills are reported to be deficient and are often cited as a main cause of failure in small, medium and micro enterprises (SMMEs). This study explores and tests this fragile relationship between operations skills and SMME sustainability. Empirical investigations are conducted in a high-density SMME manufacturing environment - the Vaal Triangle Region.

Design/Methodology/Approach: Building on previously established literature on SMME sustainability and operations skills, various measures are developed and tested for reliability and validity. Factor analysis is used to identify relevant factors in terms of operations skills. Co-relational analysis is then employed to test the hypothesised relationship. The study is cross-sectional in design and relies on trained fieldworkers administering surveys for data collection.

Findings: Five clear factors for operations skills are identified through factor analysis with an overall high reliability value. Based on descriptive and co-relational analysis results reveal that operations skills are positively associated with sustainability.

Implications: SMME owners, educators and service providers may benefit from the study's findings in terms of the nature and associations that operational skills have on developing sustainable SMME's.

Originality/Value: The study focused on a neglected area of SMMEs - the importance of operations towards business sustainability, and made an important contribution towards theory development through empirical explorations. In South Africa, this is the first time an instrument measuring operations skills has been validated and associated with SMMEs in a manufacturing context.