Production Planning and control module and performance of manufacturing firms in Nairobi County, Kenya

Abstract

The performance ofthe manufacturingcompanies over the past few years has beendecliningand inorder to address this trend, firms have focused on using information and communication technology in manufacturing process to innovate, increase productivity and improve resource efficiency. Enterprise Resource Planning system integrates business activities that allow for a smooth flow of information and interaction across all divisions. Previous studies have linked Enterprise Resource Planning system to firm performance and found diverse results.The objective of this study was to establish the effect of production planning and control module on performance of manufacturing firms in Nairobi County. Descriptive research design was used. The population of the study consisted of 533 manufacturingcompaniesinNairobiCountythatweremembersoftheKenyaAssociationofManufacturers.Krejcie and Morgan’s formula was used to obtain a sample size of 223 firms and stratified random sampling was adopted. Data was analyzed using simple and multiple regression analysis with the help of SPSS version 25.0. Multiple regression analysis and correlation analysis were performed to examine the association between variables and hypothesis was tested using t-statistic at 5% significance level. With a regression coefficient of 0.709 and a p-value of 0.000, the studyfound that the production planning and control module had a favorable and significant impact on firmperformance.Thisinferredthattheusageofproductionplanningand controlmoduleimprovedtheperformance ofthefirm.Thestudyrecommendsthatfirmsshouldendeavortoacquireanduseenterpriseresourceplanningsystems, to promote organizational survival, efficiency, and overall performance.