Mount Kenya University

MBA PROJECT PROPOSAL DEFENCE

Factors Affecting the Implementation of Lean as a Business
Improvement Technique for Small and Medium Enterprises
(SMEs) in Kiambu County, Kenya
Presented By: Michael Githui Wataka MBA/NRB/101/0006
.
Supervised by: Prof. Tom Nyamache

Abstract
SMEs play a vital role in the growth of the Kenyan

economy.
60% of SMEs do not operate beyond the first year.
Various business techniques are available for
improving business performance, however most
require high capital outlay that SMEs may not be
able to conveniently access.
Lean is a low cost approach to improvement. The
uptake of Lean by SMEs is however very low.
The project aims to find out what factors
contribute to this.
A study of 100 businesses shall be done.

Introduction: Background of the

Study
Businesses can use Lean as a business

improvement method.
Lean works by focusing on increase the value
created for the customer by reducing waste.
According to the Kenya National Bureau of
Statistics survey of 2007, only 40% of SMEs
operated beyond the 1st of starting.
The above points to the weak competitive
position that most SMEs occupy.
Improving the business performance of SMEs
is therefore important.

Introduction: -Profile of Kiambu

County
One of the 47 counties of Kenyan Republic.
One of the 4 counties forming the Greater

Nairobi or Nairobi Metropolitan.

Nairobi Metropolitan comprises of Nairobi,
Kajiado, Machakos and Kiambu counties
and accounts for 60% of the nations
wealth.
Kiambu County has a population of
1.6Million, 4 major towns and has a myriad
of activities ranging from manufacturing,
services, real estate and agriculture.

Introduction:- Statement of The

Problem
SMEs are usually small compared to large firms but due their

sheer numbers contribute immensely to the economy of any

nation. (Daniels, 2009).
Out of the 469,000 jobs created in the Kenyan economy in
2007, 89% were in the SME sector. (KNBS, 2007).
Randiki (2000), studied SMEs in the garment sector and found
that capacity management and bottle necks in operations
were main hurdles faced.
The above points to weakness in operational capacity of SMEs.
Lean helps improve the operational capacity of firms leading
to improved business performance.
Despite the above, few SMEs have adopted Lean as a business
technique, this Project sets to find out why this is the case, by
studying SMEs in Kiambu County.

Introduction: Objectives
General: The purpose of the study is to explore what

factors affect the uptake of Lean as improvement

strategies by SMEs in Kenya, with a case study of SMEs in
Kiambu County.
Specific:
To determine the understanding of Lean amongst SMEs in
Kiambu County.
To determine the capacity of SMEs in Kiambu County to
implement Lean management.
To determine the willingness of management or owners of
SMEs in Kiambu County to commit funds towards Lean.
To determine the willingness of SMEs workers to
participate in Lean.

Research Questions
The following research questions will be asked and
answered by this study:
What is the understanding of Lean amongst
management and owners of SMEs in Kiambu
County?
What capacity do the management and/or owners
of the business have to implement Lean initiatives?
What amount of funds would managers and owners
of SMEs in Kiambu County contribute towards
implementation Lean thinking?
What would be the willingness of workers in SMEs
in Kiambu County to participate Lean initiatives?

Justification of the Study

SMEs are vital to the growth of any economy despite their small size due to

their sheer numbers. (Daniels, 2009).

In Kenya however, the contribution of SMEs to the Kenyan economy is
hampered by their poor competitive nature (Randiki, 2000) and is further
shown by their low survival rate of below 40% in the 1 st year of operation.
(KNBS, 2008).
Improving the competitiveness of the SMEs is important to enhance their
contribution to the economy.
Innvoation and automation have been found to be too expensive for SMEs to
undertake initially (Hill &Jones, 2007). Lean on the other hand is a low cost
approach to improvement (Imai, 1997).
Unfortunately many SMEs in Kenya do not implement Lean (Sirma, 2011).
Kiambu County is part of the Nairobi Metropolis that contributes 60% of
Kenyas wealth (GoK, 2008), it also has a population of 1.6million people and
various industries ranging from manufacturing, agriculture, real estate and
other service industries. (KNBS, 2007). Due to its proximity to Nairobi and
its rural urban nature, it provides a good representation of what other SMEs
may be experiencing in Kenya.

Introduction: Hypothesis
The author has formulated the following
hypothesis that will be tested in the study:
The main barriers to uptake of Lean
amongst SMEs in Kenya are lack of
knowledge about Lean.

Other Matters
Significance of the Study
Limitations of the Study
Definition of Terms

Literature Review: Theoritical Review

Business Improvement Methods
Lean and Kaizen Theory
Application of the Theory of Contraints to

Lean
Six Sigma and Lean
Lean and Strategy

Literature Review: Conceptualization

Theoretical Framework

SME Survival and

Growth
Theory of
Constraints

Lean and
Kaizen
Theory

Six Sigma
Theory

Business
Improveme
nt Methods

Literature Review: Conceptualization

Conceptual Framework
Implementation of Lean

Knowledge
Change
Resource
Cost
Manageme Manageme Manageme Manageme
nt
nt
nt
nt

Summary of Independent Variables

Risk Management- This variable will enable the researcher to

create understanding of Lean and Kaizen initiatives amongst

management and owners of SMEs in Kiambu County.
Resource management- This variable will enable the
researcher to establish the capacity that management and
owners of the business have to implement Lean and Kaizen
initiatives.
Cost management- This variable will enable the researcher
to understand the amount of funds managers and owners of
SMEs in Kiambu County contribute towards implementation
of Kaizen and Lean initiatives.
Change management- This variable will enable the
researcher to establish the willingness of workers in SMEs in
Kiambu County to participate in Kaizen and Lean initiatives.

Literature Review
Empirical Review.
Summary of the Variables
Research Gap

Research Methodology
This covers
Introduction
Research Design and Location of the Study
Population
Sampling and Sampling Techniques
Piloting of the Research Instruments
Data Collection Methods and Procedures
Validity
Data Analysis Techniques
Ethical Considerations

Appendices
Questionnaire
Letter of Introduction
Study Time Frame
Study Budget

References
Aris, N. M. (2007). SMEs: building blocks for economic growth.

Kuala Lumpur: Department of Statistics Malaysia.

Bamford, CE & West, GP. (2010). Strategic management: value
creation, sustainability, and Performance. Mason, OH: SouthWestern Cengage Learning
Bonavia, T., & Marin, J. A. (2006). An Empirical Study of Lean
Production in the Ceramic Tile Industry in Spain. Internation Journal
of Operations and Production Management , 26 (5), 505-531.
Lal, H. (2008). Organizational excellence through total quality
management: a practical approach. Delhi, India: New Age
International Publishers.
Hill, CW & Jones, GR. (2007). Strategic management: an integrated
approach, 8th edition. UK: Boston Publishers Group
Hill, CW & Jones, GR. (2009). Strategic management theory: an
integrated approach. Boston, MA: Houghton Mifflin

References Contd
Holm, M. (2010). Leadership in Lean Production. Frontiers in

Leadership Research , 1-7.

Holweg, M. (2006). Genealogy of Lean Production. Journal of
Operations Management , 420 - 437.
Imai, M. (1997). Gemba Kaizen: A Commonsense, Low-Cost
Approach to Management (1st Edition ed.). New York: McGraw Hill.
Kenya National Bureau of Statistics. (2008). Economic Survey
2007. Nairobi: Kenya National Bureau of Staitistics.
Kruger, D. (n.d.). Lean Production and business process reengineering in a South African Context: A Case Study.
Kubiak, T.M., Benbow, W. Donald. (2009). The Certified Six Sigma
Black Belt Hand Book. Milwaukee, Wisconsin: ASQ Quality Press.
Luecke, R. (2005). Harvard Business Essentials: Strategy- Create
and Implement the Best Strategy for Your Business. Boston, MA:
Harvard Business Press.

References Contd
Mugenda, O., & Mugenda, A. (1999). Research Methods: quantitative and qualitative

approaches. Nairobi: African Centre for Technology Studies.

Oliver, N., Delbridge, R., & Barton, H. (2002). Lean Production and Manufacturing
Performance Improvement in Japan, UK and US 1994-2001. Cambridge: ESRC Centre
for Business Research, University of Cambridge.
Orodho, A, J. (2003). Essentials of educational and social sciences research method.
Nairobi: Masola Publishers.
Randiki, M. (2000). Capacity Utilisation in Micro and Small Enterprises : A Case Study.
Nairobi: University of Nairobi.
Rothenberg, S., & Cost, F. (2004). Lean Manufacturing in Small and Medium Sized
Printers. Rochester: Printing Industry Center at RIT.
Salman, M., van der Krogt, R., Little, J., & Gerahgty, J. (2008). Applying Lean Principles
to Production Scheduling. Dublin: Blackhall Publishing
Sekhar, SG. (2010). Business policy and strategic management. New Delhi, India: I K
International Publishing House Pvt Ltd.
Womack P, James., Jones, T. Daniel, Roos Daniel. (1990). The Machine that Changed
the World: The Triumph of Lean Production. Boston, MA: Productivity Press.
Yu, Y. P. (2010). The Barriers to SMES Implementation of Lean Production and
Countermeasures: Based on SMES in Wenzhou. International Journal of Innovation,
Management and Technology , 1 (2), 220-225.

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