OPERATIONS STRATEGIES AND PROJECT PERFORMANCE OF

JAPAN INTERNATIONAL COOPERATION AGENCY

FUNDED PROJECTS IN KENYA

MUNGAI J. G.
D61/75997/2012

A RESEARCH PROJECT REPORT SUBMITTED IN PARTIAL

FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF A
MASTER OF BUSINESS ADMINISTRATION

2014
 DECLARATION
I declare that this research project is my work and has not been submitted in any
University. No part of this project may be reproduced without prior permission of the
author and/or university of Nairobi.

Student Name: Mungai J.G.

Signed: .............................................. Date: ...........................................

This research project has been presented for examination with my approval as the
appointed University Supervisor.

Supervisor: Dr. X.N. Iraki

Signed: ............................................... Date: ..........................................

School of Business, University of Nairobi

ii
 DEDICATION
This Research Report is a special dedicated to my parents Elizaphan Mungai Githongo
and my late mum Kezziah Wanjiku Mungai who showed me to live practically in the
virtues of humility, sacrifice and hard work and to my two daughters Kezzy and Jane
whom I draw my strength and inspiration.

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 ACKOWLEDGEMENT

I am grateful and thankful to the almighty God for good health and for bringing me this
far.

To my supervisor Dr. X. N. Iraki, I sincerely thank him for his guidance, encouragement
and patience in reading, correcting, re-reading and refining this work. and not forgetting
my moderator Dr. P. O. Magutu. The same goes to the Chairman of the Department of
Management science and his entire staff for the invaluable assistance accorded to me
during my studies. Special thanks also go to my lecturers and fellow students in the MBA
class for their ideas, support and encouragement during the study.

To my beloved parents, Elizaphan Mungai Githongo and my late mum Keziah Wanjiku
Mungai for their moral, financial support and encouragement during my studies. To my
sister and brothers I am thankful for their moral support accorded to me in realizing this
dream.

I also wish to thank Anastacia and my two angels Kezzy and Jane for standing with me
and giving me all the support I ever needed during the entire postgraduate study period
and other relatives for their concern and support. I am also grateful to all my friends who
offered me the moral support and encouragement during my study.

Finally, I appreciate the financial support accorded to me by JICA Kenya office and staff
for availing to me the necessary data for this project paper without which this study
would not have been successful.

May God bless you all.

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 TABLE OF CONTENTS
DEDICATION.................................................................................................................. iii

ACKOWLEDGEMENT.................................................................................................. iv

TABLE OF CONTENTS ................................................................................................. v

LIST OF TABLES ......................................................................................................... viii

ABSTRACT ...................................................................................................................... xi

CHAPTER ONE ............................................................................................................... 1

INTRODUCTION............................................................................................................. 1

1.1 Background ................................................................................................................... 1

1.1.1 Operations strategies .................................................................................................. 1

1.1.2 Framework of Operations strategies ....................................................................... 2

1.1.3 Project Performance ................................................................................................... 5

1.2 Research Problem ......................................................................................................... 6

1.3 Research Objectives ................................................................................................ 7

1.4 Value of the Study ........................................................................................................ 7

CHAPTER TWO .............................................................................................................. 8

LITERATURE REVIEW ................................................................................................ 8

2.1 Introduction .................................................................................................................. 8

2.1.1 Operations Strategies ................................................................................................. 8

2.2 Operations Strategy Development Models ................................................................. 10

2.2.1 The trade-off concept and sand cone model ............................................................ 11

2.2.2 Wheelwright and Hayes Four –Stage Model .......................................................... 11

2.2.3 Content Model – Structural and Infrastructure Contents ......................................... 11

2.2.4 Process Model – Four Perspectives of Operations Strategy .................................... 12

2.3 Contextual Framework of Operations Strategy .......................................................... 12

v
2.3.1 Operations Strategies in other sectors ...................................................................... 13

2.3.2 Humanitarian Organizations Operations Strategies ................................................. 13

2.4 Operations Strategies and Project Performance .......................................................... 14

2.5 Japan International Cooperation Agency (JICA) funded Projects in Kenya .............. 15

2.6 Evaluation of JICA funded Projects in Kenya ............................................................ 16

2.7 Conclusion .................................................................................................................. 17

2.8 Conceptual Framework ............................................................................................... 18

CHAPTER THREE ........................................................................................................ 19

RESEARCH METHODOLOGY .................................................................................. 19

3.1 Introduction ................................................................................................................. 19

3.2 Research Design.......................................................................................................... 19

3.3 Target Population ........................................................................................................ 19

3.4 Sample Design ............................................................................................................ 19

3.5 Data Collection ........................................................................................................... 20

CHAPTER FOUR: ......................................................................................................... 23

DATA ANALYSIS, FINDINGS AND DISCUSSIONS ............................................... 23

4.1 Introduction ................................................................................................................. 23

4.2 Background Information ............................................................................................. 23

4.3 Operational Strategies at JICA.................................................................................... 24

4.3.1 Alignment of operational strategies to government requirements and organizational

capabilities ........................................................................................................................ 25

4.3.2 Success of operation Strategy in meeting project performance measures ............... 26

4.4 Effect of Operations Strategies on Project Performance ............................................ 28

4.4.2 Kaizen Strategy ........................................................................................................ 30

4.4.3 Enterprise Resource Planning .................................................................................. 31

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4.5 Just-In-Time and Supply Chain Management Operational Strategies ........................ 32

4.6: Effect of Just-In-Time and Supply Chain Management Project Performance .......... 33

4.7 Regression Analysis .................................................................................................... 35

CHAPTER FIVE: ........................................................................................................... 37

SUMMARY, CONCLUSION AND RECOMMENDATIONS .................................. 37

5.1 Summary ..................................................................................................................... 37

5.2 Conclusion .................................................................................................................. 38

5.3 Recommendations ....................................................................................................... 39

5.4 Limitations of the study .............................................................................................. 39

5.5 Suggestions for further research ................................................................................. 40

REFERENCES ................................................................................................................ 41

APPENDIX I: QUESTIONNAIRE ............................................................................... 45

APPENDIX II: JICA PROJECTS (2004-2013) ........................................................... 50

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 LIST OF TABLES

Table 1: The PDCA Cycle 17

Table 2: Target Population and sample size 20

Table 3: Operational strategy alignment to JICA’s corporate strategy 25

Table 4: Alignment of operational strategies to government 26

requirements and organizational capabilities
Table 5: Effectiveness of the applied Operation Strategy 27

Table 6: Effect of Lean operations 29

Table 7: Effect of Kaizen Strategy 30

Table 8: Effect of Enterprise Resource Planning Strategy 31

Table 9: Effect of Supply Chain Management to Project Performance 34

Table 10: Results of General Least Square 35

Table 11: Model Summary for NOP with Control Variables 36

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ix
 ACRONYMS

CARD Coalition for Africa Rice Development

DMU Decision Making Units.

ERP Enterprise Resource Planning

JBIC Japan Bank for International Cooperation

JICA Japan International Cooperation Agency

JIT Just In Time

JOCV Japan Overseas Cooperation Volunteers

NGO Non-governmental Organisations

ODA Official Development Agency

PDCA Plan, do, check and Action

RCM Red Crescent Movement

SCM Supply Chain Management

TQM Total Quality Management

UNHCR United High Commission for Refugees

SPSS Statistical Package for the Social Science

x
 ABSTRACT
Operation strategy is critical to successful implementation of projects. Operations
strategy ensures efficient operationalization of projects plans through seamless
implementation. Projects carry activities which have a defined timeline and clear
indicators, the two variables which largely define project success. Through operation
strategies, project work schedules are adhered to and the resource are focused towards
key performance indicators.
Japan International Co-operation Agency (JICA) has been involved in a number of
projects in Kenya for the last ten years. The projects re multi-sectoral covering the areas
of agriculture, economic infrastructure, health, human resources development,
environment and water and sanitation. The success rate of the projects is high with only
two failures both at sustainability level. An academic understanding of the role is what
this study attempted to investigate on.
The study begins with understanding the concepts of operations, strategy, operations
performance, JICA Projects in Kenya before answering research questions and
objectives. The body of literature in operation strategies and performance of projects is
covered in literature review.
The study carried out the research through collection of data which were analyzed using
SPPP computer program before arriving at the conclusion.

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 CHAPTER ONE

INTRODUCTION

1.1 Background
There has been a paradigm shift from a focus on functional operations to project
operations. Business strategies are being split into small manageable projects headed by a
project manager who overseas success in their operations and ultimate completion.
Project approach in organization strategy has been found to be superior to functional
approach. It allows for more analyzability, integration, focus, accountability and is
associated with higher performance leading to competitive advantage (Artoo et al., 2004).
Consequently, the study of operations management in organizations is shifting from
general operations to operation performance of projects (Morris et al., 2005).

Project portfolio is the key feature in modern organizations. Project portfolio is a set of
projects that share and compete for scarce resources and are carried out under the
sponsorship and management of a particular organization (Archer et al., 2004). Each
project in the portfolio is treated as an independent business with its separate
management, resources, objectives, and implementation timeline and operations strategy.
Project manager ensures operations performance of the project by implementing the
project and operations strategy. Management of different projects under a defined
organizational umbrella gives synergy and delivers benefits higher than those total
benefits that would be delivered by each project working independently (Potakal et al.,
2009). To achieve this synergy and a higher performance in operations, a strategic fit for
operations and corporate strategy is required (Turner, 2010).

1.1.1 Operations strategies

Slack and Lewis (2011) view operations strategy as a set of decisions which shape the
long term capabilities of any type of operations and their contribution to overall strategy,
through reconciliation of market requirements with operations resources. Satisfying
market requirements requires that organization address the needs of a particular market.

1
Operations strategy can also be viewed as the development of long term plan for using
the major resources of the organization for a high degree of compatibility between these
resources and the firm’s long term corporate strategy (Hayes et al., 2005).

Mill et al. (2002) states that operations strategy is the value addition process undertaken
by the organization to ensure delivery of value to the customers through transformation
of resources to final products and services. Whether market, planning or customer
approach, operations strategy is resource based. Hayes et al. (2005) has observed that
operations strategy provides to the organization a limitless framework of developing
priorities on how to optimize on the available resources through efficient operational
activities in an attempt to gain competitive advantage and achieve organizational
objectives.

Leong et al. (2002) states that operational strategy can be categorized into structure and
infrastructure decision making. Structure decision making is concerned with facilities,
capacities, process technology and supply network. Infrastructure decision involves
planning and control, quantity, human resources, new product development and
performance measures.

1.1.2 Framework of Operations strategies

JICA is a project based organization whose activities are organized around a project.
Each project is viewed as an independent operation. However, operation in all the
projects are knowledge based requiring situational analysis and borrowing from
knowledge gained from previous similar projects.

Operations strategy adopted by Japan International Cooperation Agency (JICA) for their
projects in Kenya is largely plan based, customer or bottom-up focused and operations
led. Plan based operation strategy are consistent with the JICA’s overall mission. Hayes
et al. (2005) argues that planned operation strategy should be consistent with the vision
and mission and overall of strategy of the organization. JICA’s vision is “inclusive and
dynamic development”. The vision is supported by four missions and four main

2
strategies. The missions are: addressing global agenda, reducing poverty through
equitable growth, improving governance and achieving human security. The strategies
are: integrated assistance, seamless assistance, promoting development partnership and
enhancing research and knowledge sharing (JICA Kenya Annual Report, 2013).

Customer or bottom-up focus operations strategy involves responding to customer’s

demand, solving specific problems with the customers and learning from situational
requirements (Leonard, 1992). To understand the community or customer needs, JICA
conducts baseline studies for the purpose of understanding the situation prior to the
launch of the project. Baseline studies helps in understanding community needs, planning
for infrastructure support, and setting up parameters that shall be used to evaluate
performance, impact and change brought about by the project. The bottom up operations
strategy incorporates community participation and technology transfer which are also
supportive to the vision and mission of JICA (JICA Annual Report, 2013).

Operations led approach is one in which excellence in operations is used to drive overall
organization strategy. The approach is based on resource based view whereby superior
performance of an organization comes from the way in which it acquires, develops and
deploys its resources and builds its capabilities (Barney, 1991). Excellence in operations
is achieved through incorporation of best practices in operations strategy. JICA has
adopted result based project management strategy. Learning experiences from ex-post
evaluations are adopted in operations of future projects which share similar situation
challenges and have common objective. JICA research Institute conducts research and
operations analysis to develop policies on best practices derived from information sharing
and feedback from evaluation results (JICA Annual Report 2013).

JICA was established by the Law concerning the Independent Administrative Institution,
Japan International Cooperation Agency (Law No.136 of December 6, 2002). The current
organization was formed on October 1, 2003 as outlined in the International Cooperation
(Independent Governmental) Agency Act of 2002. Its predecessor, the Japan
International Cooperation Agency (also known as "JICA"), was a semi-governmental

3
organization under the jurisdiction of the Ministry of Foreign Affairs, formed in 1974. A
major component of the comprehensive overhaul of Japan's ODA that the Japanese
government had decided on in November, 2006 is the merger in 2008 between JICA and
that part of the Japan Bank for International Cooperation (JBIC) which currently extends
concessional loans to developing countries (JICA Profile, 2012).

JICA is a bridge linking Japan with developing countries. In accordance with its vision of
“Inclusive and Dynamic Development”, JICA supports the resolution of issues of
developing countries by using the most suitable tools in various assistance methods and a
combined regional or country issue oriented approach. JICA is in-charge of administering
all Official Development Assistance (ODA). ODA describes financial and technical
cooperation extended to governments for development purposes. ODA assistance is
classified as either bilateral assistance or multilateral assistance. Bilateral assistance is co-
operation between two countries or Japan and another country while multilateral
assistance is investment and contributions provided to international organizations.

JICA projects are classified as either, Technical Co-operation, ODA Loans and
concessionary loans and Grant Aid. Technical co-operation projects are for human
resources development and formulation of administrative systems in developing
countries. Technical co-operation involves the dispatch of experts, provision of necessary
equipment and training of personnel. ODA or concessionary loans are used for projects
involving large scale infrastructure and other forms of development that require
substantial funds. Grant aid is the provision of funds to developing countries with low
income levels without the obligation of repayment. Grant aid is used for improving basic
infrastructure such as schools, hospitals, water supply facilities and roads along with
obtaining health and medical care equipment and other requirements.

Other JICA projects occur through disaster relief and co-operation through citizen
participation. Disaster relief projects is in response to request by affected governments or
international organizations such as Red Cross for rescue, search for missing persons or
provision for first aid and medical treatment to victims involved in calamities.

4
Cooperation through citizenship involves dispatching of volunteers to work in countries
in areas such as a local government office, schools, hospitals and other community
service workers under the umbrella of Japan overseas cooperation volunteers (JOCV).

JICA projects in Kenya are coordinated at JICA Kenya office which also supports
projects in Burundi, Eretria, Somalia and Seychelles. The projects are confined to five
priority areas; Economic infrastructure, agriculture, water and sanitation/environment,
human resources development and health. Since 2004 JICA has initiated 67 projects
spread across the country and within the premises of the five priority areas. JICA projects
in Kenya constitute to over 15% of the JICA projects in Africa. The projects are spread
across in all the regions of the country with infrastructure development constituting of the
biggest proportion (JICA Profile, 2012).

1.1.3 Project Performance

Project performance is the overall quality of a project in terms of its impact, value to
beneficiaries, implementation effectiveness, and efficiency and sustainability ( Chandes
et al., 2010). Project performance is different from Industrial or manufacturing sector
performance owing to the unique structural nature of the projects. However, like the
operations of other sectors, project performance can be achieved through evaluation
against suitable criteria, monitoring and control or benchmarking against set standards or
previous performance of similar projects (Warmode, 2002). Key criteria against which
the project performance can be evaluated against includes; relevance, effectiveness,
impact, efficiency and sustainability (Hill, 2005).

Relevance examines the extent to which the project activities are suited to the priorities
and policies of the target group, recipient and donor or sponsor. Key questions that are
asked in assessing relevance are whether the goals of the project meet the needs of the
beneficiaries and whether the activities and outputs of the project are consistent with the
overall goal and attainment of its objectives. Effectiveness measures the extent to which a
program or a project attains its objectives. Impact examines positive and negative
changes as a result of the project. This includes direct and indirect effects and expected

5
and unexpected effects Efficiency measures the out puts in relation to the inputs to
determine whether the project uses the least costly resources possible to achieve the
desired results. Sustainability relates to whether the benefits of the project are likely to
continue after the closure of the project (Chandes et al., 2010)

1.2 Research Problem

The multi-sectoral approach of operation strategies to manage projects adopted by JICA

is unique out of the high success rate. JICA Kenya annual report (2009) reported one
project failure. Training and capacity development project by the name of Africa Institute
for Capacity Development (AICAD) closed at sustainability stage after it was handed
over to the three East African Countries.

The success rate of JICAs projects with this exception translates to 98%. Also notable is
the operational strategy of the projects at all the project levels; pre-implementation,
implementation, post implementation and feedback stages. The high success rate elicits
scholarly interest of studying the unique project management phenomena involved. The
focus of study would center on the operations strategies adopted by JICA in ensuring
project performance and eventual success of the projects in Kenya and how this body of
knowledge can be shared between Japan and beneficiary countries.

Several studies on operations strategies have been undertaken in the various sectors of the
economy. Bosibori (2012) found out that operations strategies are critical to the success
of airline industries. Njoroge (2013) observed that real estate sector in Kenya adopts
operations strategies to meet diverse needs of customers. Nyamunge (2001) concluded
that operations strategies determine competitiveness of large manufacturing firms in
Kenya. Sascha (2010) examined the influence of business strategy on project portfolio
management and its success.

The studies provided a conceptual framework on management of project portfolio

management and its success. To the best of the researcher’s knowledge there hasn’t been

6
any research on operations strategies and project performance of JICA funded projects in
Kenya. The cause of success in JICA funded projects can only be speculated as a result of
employing operations strategies. Thus the research aims to fill this gap by investigating
the relationship between operations strategies and project performance of JICA funded
projects in Kenya by answering the following research questions; What operations
strategies are adopted by JICA?, and what is the relationship between operations
strategies and project performance in JICA funded project in Kenya?

1.3 Research Objectives

i. To determine the operations strategies adopted by JICA funded projects in
Kenya
ii. To establish the relationship between operations strategies and project
performance of JICA Funded projects in Kenya.

1.4 Value of the Study

The study will be of value to JICA and Japanese government who shall use the study as a
scheme of enhancing operation strategies for all their projects in Kenya. Donor Agencies
and non-governmental organizations involved in community development projects shall
use the study to understand the importance of having clear operations strategies as a
support to operation efficiency and success of the projects. Kenya government which is
also involved in other development projects shall use the study in gaining insight of
JICA’S operations and hence replicate the JICA model in their projects.

The study is a step forward towards recognizing the paradigm shift from functional
management to project management through operations. Scholars shall research more on
application of this paradigm shift in other sectors in addition to project management i.e.
education institutions, research bodies and religious organizations.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

Operation strategy is critical to performance of an organization because it determines

how well the resources are utilized and prioritized through the various competing needs
of an organization. Operation strategies represent operationalization through
determination of work processes using various work techniques. Different organizations
employ different operation strategies depending on nature of their business strategies
(Chase et al., 2007)

2.1.1 Operations Strategies

Operations strategy is a set of systems which an organization has put in place to develop,
protect and leverage on its unique resources and advantages. Operations strategies differ
between organizations owing to the uniqueness of the resources and advantages.
Development of operations systems requires creativity, innovation, insight and
experience on how to combine the diverse resources to define an operation strategy that
isn’t imitable (Hill, 2005).

The uniqueness of the operations strategy developed by an organization confers an

advantage to it over the competitors. Chase et al. (2007) observes the resources include
land and buildings, fixed and moving machines and equipment, tools, raw materials and
other current assets which are largely classified as the structural component of operations.
Advantages includes organizational knowledge, managerial competencies, supply chain
relations and networks, loyalty, technology applications, co-ordinations process and jobs
design and the synergy arising from the integration of all which are classified as the
process competent of operations (Leong et al., 1990).

Competitive strategy and resources based views form the basic foundations towards
formulation of operations strategy.

8
Competitive strategy focuses on how an organization formulates and implements a
business strategy that accords it a competitive advantage in the external business
environment (Partha et al., 2011). Business competitive strategies can be classified as
defender, prospector, analyzer and reaction (Miles and Snow, 1978). The first three
competitive strategies focus on cost, and efficiency of operations and the last one being a
strategic failure.

Porter (1980) categories business competitive strategies as cost leadership,

differentiation, concentration and stuck in the middle. The first three competitive
strategies focus on cost and differentiation on operation and products while the last
represent no strategy. Treacy and Wicerbema (1983) advocate the competitive strategies
of operational excellence, customer intimacy and product leadership. Operational
excellence competitive strategy focuses on efficiency and cost reduction; customer
intimacy focuses on efficiency and differentiation while product leadership focuses on
distinct product innovation.

Bowman and Faulkner (1997) argue that competitive strategies are a hybrid of the three
approaches and have a focus on price leadership, efficiency and differentiation.
Competitive strategy approach holds that operations strategies adopted by an organization
are supportive to the business strategy. Organizations adopting competitive approach
have their strategies aiming at seamless operations, efficiency, cost reduction and
customer in differentiation of outputs (Sohrab et al., 2013).

Resource based view is an internal analytical process that focuses on organizations

capabilities of the opinion of that organizations capabilities and resources should be
optimally utilized through strategic operation activities to develop a sustainable
competitive advantage for the organization. Stephane (1999) states that resource based
view is inwardly looking whereby the primary goal of a strategy is to develop and
leverage resources through operation innovations anchored within business processes and

9
organizational routines. Grant (1991) proposes a five step process in developing
operational strategy using the resource based view.

At first there is an extensive analysis of the operating capabilities existing within the
organization. Management then selects a few core capabilities according to their superior
returns potential or “rent generating capacity”. The selected capabilities are further
analyzed through extensive “market tests” to ensure that they can provide effective and
sustainable competitive advantage.

Finally, business diversification and capability development strategies are formulated to

ensure operations are rebuilt according to the strengths–opportunities relationship
identified through strategic analysis. Identification of the core competencies is a difficult
thing in practice and requires a consensus between team members, innovative thinking
and high proficiency and skills between the team players (McGrath et al., 1996).
Resource based view implies that the operations manager becomes the centrally placed
person in developing appropriate operation strategies that shall gain competitive
advantage (Hamel et al., 1994.)

The two views are not mutually exclusive and operation strategy comes about through an
interactive process that employs both perspectives. A firm may opt to position itself in
the market and then develop capabilities or it may examine its capabilities and chose to
leverage them in identifying new business or market segments in which to compete
(Backman et al., 2008).

2.2 Operations Strategy Development Models

The models provide a framework on how the organizations can develop strategies in their
operations. Changes in the business environment have led to evolution of the models
through time. There is however no single model that would be prescribed for a situation
and organizations are required to have contingency perception in applying the models and
generate innovation and creativity during model modification (Slack et al., 2004).

10
2.2.1 The trade-off concept and sand cone model
The model is the oldest in the field of operations strategy. Skinner (1969) founded the
model on the basis of specialization. The fundamental argument in the model is that firms
may not excel in all the four competencies of operations; quality, cost, speed and
flexibility. A firm would select one in two competencies to build competitive advantage
on. Trade off would therefore occur for the competencies not focused on. Market based
analysis is the single most important basis of determining the competencies to focus on.

2.2.2 Wheelwright and Hayes Four –Stage Model

Wheelwright and Hayes (1985) model traces the adoption and recognition of operation as
a strategic tool which guarantees competitive advantage through four phases each with
distinct characteristics. The first stage described as internally neutral is characterized by
absence of focus on either quality, cost or flexibility. Second stage is referred to as
externally neutral. Organization at this stage tries to gain parity with its competitors by
copying best operation practices of its industry such as Just In Time and Total Quality
Management.

Third stage is described as internally supportive. The organization has operation

strategies that are linked to and derived from the business strategy. Fourth stage is the
externally supportive in which operations strategy is used as a basis of developing of the
business strategy, Organization at this stage has developed and acquired best practices
which are above those of the market or the industry. It coincides with sandcone
productivity frontier which thrives on innovative and creativity of learning organizations
(Sohrab et al., 2013).

2.2.3 Content Model – Structural and Infrastructure Contents

The model was developed by Leong et al. (1990) which guides in determining the key
decision areas which call for emphasis when developing operation strategy. The model
differentiates decision making criteria into structural and infrastructural. Structural
criteria of operations strategy are physical in nature, involve capital investment and have
a relative high degree of permanence and inflexible. They are the hardware of the

11
organization and include physical facilities and their location and sizes, capacity and the
ability to satisfactorily serve a market, technology in use and the supply network.

2.2.4 Process Model – Four Perspectives of Operations Strategy

According to Slack and Lewis (2011) operations strategies emerges from four different
perspectives namely top down, bottom up, marketing led and operations led. The model
relates the operations strategy to the vertical organization levels and horizontally with the
departments.

Vertically the operations strategy can either be top down or bottom up. Top down
supports the business strategy that is developed by the top level management. Such
operations strategy coincides with wheel Wright and Hayes stage three. Bottom up
approach arises out of observation on operations behavior and evaluation of predictable
patterns which become operational norm. It’s a perspective where the organization learns
from its experiences, developing and enhancing its operational capabilities through
incremental improvements (Hayes et al., 2005).

Horizontally the operations strategy can either be market or operations led. Market led
operations strategy involves translating marketing requirements into operations decisions.
Such a strategy considers how the organizational products and services win orders in the
market place (Terry, 1985).

2.3 Contextual Framework of Operations Strategy

Operations strategy is contextual to the nature of the organizations and business. All
organizations including government and churches adopt operations strategies unique to
the nature of their business. Operations strategies however have similarities for the firms
operating in similar industry. Skinner (1969) states that, the study of operations strategies
was initially focused on manufacturing before diversifying to service, projects and
humanitarian and non-governmental organizations (NGO’s).

12
2.3.1 Operations Strategies in other sectors
Manufacturing concerns operations strategies are unique to those of other organization
because their objective is to add value to production processes and produce goods and
services (Schrub et al., (2013). Operations strategies in service aims in enabling
operations management to develop a system that can produce and deliver a service
package that matches customer's expectation with perception (Armistead, 2003).

Operations strategy for projects involves the activities carried out in the four project
phases of planning, implementation, post implementation and feedback. The four stages
or phases are interrelated despite having distinct activities (Turner, 2010).

2.3.2 Humanitarian Organizations Operations Strategies

Humanitarian Organizations are focused on reducing human misery and sufferings
caused by natural calamities or man-made inflictions such as civil Humanitarian
organizations like United Nations High Commission for Refugees (UNHCR). Red Cross,
Red Crescent Movement (RCM) and other Non-Governmental Organizations (NGO’s)
involved in disaster relief. All the humanitarian organizations work under the values of
humanity, impartiality and neutrality (Sandwell, 2011). Unlike the projects whose
activities are planned and clearly defined with schedules and timelines, activities of
humanitarian are adhoc, crisis based with a time horizon that isn’t predictable (Pache et
al., 2010).

Operations strategy adopted by such organizations requires flexibility. Nori et al., (1995)
defines flexibility as the ability to respond or conform to new situations which are
unpredictable. Flexibility associated with such operations strategy includes expansion,
distribution, routing, labour and equipment flexibility (Arias, 2003). Expansion flexibility
is the ease with which capacity can be added when needed. The flexibility helps when the
operations on the ground require enhancement. Distribution flexibility is the case in
which channels of distribution can be altered to match the situation while routing
flexibility is the ability to use alternative physical routes or directions to reach the

13
intended destination. Labour and equipment flexibility is the ease of interchange of
personnel and machine during the operations.

Notable Operations Strategies in projects includes lean operations, continuous

improvement or Kaizen, Enterprise resource planning (ERP), Just-in-time (JIT) and
supply chain management (SCM) (Panizzolo, 1998).

Lean operation aims at meeting demand instantly, deliver perfect quality and eliminate
waste in all its forms. Waste is regarded as any activity that doesn’t add value to the
operations (Ohno, 1988). Waste in project occurs through punctuated flow of raw-
materials that affect projects deadlines, unnecessary motions and movements, inventory
and raw materials management.

Continuous improvement or Kaizen is achieved through learning experienced in other

similar projects. This forms the basis of continuous improvement, elimination of common
mistakes and high rate of projects success (Gary, 2009). Enterprise Resource Planning
(ERP) ensures an integrated mode of information sharing across the various projects
(Bajwa, 2004).

Supply Chain Management (SCM) in JICA projects is based on contractual and mutual
partnership between the project and the service providers. The supply chain management
is supported by ERP in the procurement process. Strategic linkages are established in the
supply chain. The linkages are between the organization and local suppliers or
international supplies. Efficient supply chain management allows for practice of Just In
Time (JIT) (Gary, 2009).

2.4 Operations Strategies and Project Performance

Performance is a relative term that is dependent upon the set objectives, evaluation
criteria or indicators. Every performance is realized after assessment or evaluation against
expectations or standards. Performance can be expressed in quantitative or qualitative
terms depending on the nature of the tasks being carried out. Operational performance is

14
dependent upon the nature of the activities, business or the industry in which the
organization is operating in (Slack et al., 2004).

Project performance is largely dependent upon the indicators which have been set during
the planning stage. Achievement of the objectives at the various stages of project
development is translated to imply a high performance of a project. The criteria of
operation strategy adopted by the project aim at ensuring reduction of waste on the
materials, confinement to budget and scheduled work programs.

2.5 Japan International Cooperation Agency (JICA) funded Projects in

Kenya
JICA plays a critical support role in economic development of Kenya by supporting
projects aimed at achieving millennium development goals as well as vision 2030. The
projects are in line with the government focus of achieving high living standards,
international competitiveness and economic prosperity for its citizens (Vision, 2030). The
projects are in agriculture, Human Resources Development, health, water and
sanitation/environment, economic infrastructure and volunteering activities.

Project based organizations use projects as coordinating mechanisms within the

established organization. Project based organizations have a set of projects that cease to
exist once their projected time is over, leaving the organization intact to initiate and
absorb other projects (Davies et al., 2010). Activities are organized around small
temporary systems of work organization or projects rather than the large permanent
organization (Malone et al., 1998).

Project based organizations have notable features that differentiate them from other
organizations. First the projects are viewed as transitory organizational or configurations
for allocating personnel and resources. Secondly, there is permanent learning in the
temporary structures. Learning occurs incrementally through inference of previous
experiences and institutions memory of the organization that is well documented
(Grabber, 2002). Thirdly there is innovation capabilities associated with the projects. Out

15
of the learning experience, methodology and operations, strategies do change as new
projects are being undertaken (Whitley, 2006). Fourthly there is network and social
relations associated with projects. Staff working in a project gain group identify and are
likely to develop team culture and cohesiveness which is essential for project success
(Bakker, 2010).

JICA mode of operation makes it to be a project based organization. Various JICA

projects in Kenya are “Stand Alone,” with each project being an independent sub-entity
with its own management, resources and distinct object. Operations of one project don’t
affect the operations of the other projects nor is the life of the projects connected. The
central coordinating office, JICA Kenya however requires documentation of the learning
process or outcomes which is in turn used to improve future projects (JICA Evaluation
Report 2013).

2.6 Evaluation of JICA funded Projects in Kenya

The performance evaluation system of JICA has the following features; consistent
evaluation throughout the projects cycle; coherent methodologies and criteria; cross
sectional and comprehensive evaluation through a thematic evaluation; ensuring
objectivity and transparency, and emphasizing use of evaluation results (Evaluation
Report, 2012)

Consistent evaluation thought the product cycle involves evaluation at pre-

implementation stage, implementation stage, post implementation stage and at feedback
stage. The evaluation is referred to as PDCA cycle meaning Plan, Do Check and Action.
Evaluation on PDCA cycle fits with the four stages of the project (Evaluation Report,
2013).

Cross sectoral and comprehensive evaluation through a thematic evaluation aims at

deriving recommendations and lessons learnt. Projects evaluated this way must have a
common theme. Ex-post evaluation and ex-post monitoring require an objective

16
evaluation by independent persons in order to check on quality of JICA projects.
Feedback is critical as a learning process (Chanders & Pache, 2010).

Table 1: The PDCA Cycle

Source: JICA Annual Report, (2013).

2.7 Conclusion
Operations strategies are instrumental to performance and achievement of organization’s
objectives. Through operations, strategy efficiency in utilization of organization
objectives is achieved leading to competitiveness. Business strategy of an organization
once defined relies on the mode of operation strategies adopted for successful
implementation and realization. There is therefore a need to have a structural fit between
the business strategy adopted and the operations strategy developed. There is a clearly
defined fit that serves to ensure that the operations are geared towards achievement of
project success. This is ensured through project planning, continuous evaluation and a
learning process, through feedback mechanism. Sustainability of the project is considered

17
to be an integral part of the project. Such sustainability is achieved through community
ownership of the project and involvement of the recipients in decision making about the
project and technology transfer.

Japan’s role in economic development in Kenya and improvement of the wellbeing of its
citizen has a wide impact because JICA’s projects are multi-sectoral and social economic
based.

2.8 Conceptual Framework

This study will seek to establish the effects of operation strategies on the project
performance of JICA funded projects in Kenya. The independent variables in this study
will be Lean operations, Kaizen, Enterprise Resource Planning, Just In Time and Supply
Chain Management. The study will therefore seek to establish the influence of the
independent variables on the dependent variables which will be Relevance, Effectiveness,
Impact, Efficiency and Sustainability.
Independent Variables Dependent Variables

Lean operations

Project Performance

Kaizen • Relevance
• Effectiveness
Enterprise Resource Planning • Impact
(ERP) • Efficiency
• Sustainability

Just In Time (JIT)

Supply Chain Management

(SCM)

Source: Author, (2014)

18
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This chapter provides the methodology of the research study used. It gives the specific
procedures that were followed in undertaking the study. The research design, population,
sampling design, data collection methods and data analysis are described in this chapter.

3.2 Research Design

The study used a descriptive research design. A descriptive study attempts to describe or
define a subject, often by creating a profile of a group of problems, people or events,
through the collection of data and tabulation of the frequencies on research variable or
their interaction (Cooper and Schindler, 2006) Descriptive design method provided
qualitative data from the respondents. The data collected answered questions concerning
the objectives of the subject under study.

3.3 Target Population

Target population of the study comprises of 67 JICA projects in Kenya (See APPEDIX
II).

3.4 Sample Design

Stratified sampling method was applied to generate the research sample. The method
recognizes the existence of strata with distinct characteristics in the sample frame.
Stratified sampling method ensures the sample is a representative of the population by
ensuring that data is collected from each stratum (Kothari, 2004). Strata in this study
included various categories under which JICA projects are classified. These includes;
Agriculture, Water and Sanitation/Environment, Economic Infrastructure, Human
Resources Development and Health.

19
Mugenda and Mugenda (2003) recommend that 10 percent or more of the target
population is representative of the population where the appropriate method of sample
design is applied. The research settled for a sample size of 30 projects. The sample size
was big enough to accommodate project strata which are small and which yield a sample
of one project e.g. Human Resource Development. It also allows project strata with more
than two projects to carry a proportionate weighting in the sample size e.g. agriculture.
100% sampling was accommodated where the strata had few projects e.g. Human
resources development.

TABLE 2: TARGET POPULATION AND SAMPLE SIZE

Project Sector Population Sample size

Agriculture 15 7
Water and Sanitation/ Environment 7 4
Infrastructure and Energy 30 11
Human Resources Development 3 3
Health 12 5
Total 67 30
Source (Author 2014)

3.5 Data Collection

The study used both primary data and secondary data. Primary data was collected through
the use of questionnaire. Questionnaire enables the researcher to focus on areas of
importance and which address the research directly (Leedy, et al., 2001). Open ended and
closed ended questions as well as structured and unstructured was used in the
questionnaire. Structured questions reduce data collection time while unstructured
questions encourage the respondent to give in depth responses thereby enhancing quality
of data collected (Cooper and Schindler, 2008).

Questionnaires were standardized to ensure validity and reliability. The questionnaires

were administered to one senior manager of the sampled projects. The managers were
either project officers or project coordinators. Drop and pick method was used whereby
the selected managers were expected to have filled the questionnaire after three days.

20
Electronic system of e-mail and followed up by telephone was applied to managers
outside Nairobi.

Secondary data was collected from project reports which are available at JICA website.

In the study, reliability was confirmed by pre-testing the questionnaire with a selected
sample from one of the projects. The pretest was conducted by both the principle
researcher and the research assistant to enhance clarity of the questionnaire. According to
Mugenda and Mugenda (2003), the accuracy of the data collected largely depends on the
data collection instrument in terms of validity and reliability. This instrument was
reviewed based on the pre-test experience.

3.6 Data Analysis

Data analysis was conducted using descriptive and inferential statistics. The specific
descriptive statistics used were the mean scores and frequencies. The particular
inferential statistics used was regression analysis.

Multiple regression analysis was used to establish the relationship between independent
variables and the dependent variables.

Y =α + β1X1 + β2X2 + β3X3 + β4X4 + µ+ β5X5+ β6X6+ β7X7

Where;

Y = Project performance = Relevance, Effectiveness, Impact, Efficiency and

sustainability

X1 = Lean Operations = Reduction of waste, quality delivery and customer satisfaction.

X2 = Kaizen = Continuous utilization of learning and experiences gained from similar

projects

X3 = Enterprise Resource Planning (ERP) = Sharing of Information

X4 = Just- In-Time (JIT) = Timely delivery of products and services

21
X5 = Supply Chain Management (SCM) = Strategic Linkages or Vertical Integration with

stakeholders

Control variables

X6 = Project Funds = Donor funds availed to the project

X7 = Human Resource Capital = Qualifications, Skills, Diligence etc. of project

employees.

In the model, α = the constant term while the coefficient βii = 1…7 was used to measure

the sensitivity of the dependent variable (Y) to unit change in the predictor variables. µ is

the error term which captures the unexplained variations in the model. In its complete

form, the model was;

Project Performance = α + β1 Lean Operations + β2 Kaizen + β3 Enterprise Resource

Planning + β4 Just- In-Time + β5 Supply Chain Management + β6 Project Funds + β7

Human Resource Capital

22
 CHAPTER FOUR:

DATA ANALYSIS, FINDINGS AND DISCUSSIONS

4.1 Introduction
The research objective was to determine the operations strategies adopted by JICA and
establish the relationship between operations strategies and project performance of JICA
Funded projects in Kenya. This chapter presents the analysis, findings and the discussion
with regard to the objective. The analysis is presented in mean and standard deviations
while the findings are presented in frequency distributions and tables.

4.2 Background Information

The demographic information considered in this study included the job titles of the
respondents, work life experience, the projects that are currently ongoing, and the
thematic area of the projects. A total of 30 questionnaires were issued out. The completed
questionnaires were edited for completeness and consistency. Of the 30 questionnaires
distributed, 24 were returned. This represented 80% response rate which was deemed to
be adequate in the realization of the research objectives. The respondents had worked for
the organization for different number of years that ranged from 5 to 11 years and their job
position was in the middle to top management cadre. The respondents included project
supervisors, programme coordinators, administrators, and project managers.

The projects that were found to be undertaken by JICA varied and included in such areas
as in Agriculture, Economic Infrastructure, Human Resource capacity and health sectors.
Presently, the organization is carrying out projects that deal with the improvement of
maternal and child health, water supply projects, incubating grassroots women capacity
for sustainable socio-economic empowerment & livelihood transformations, HIV/AIDS
control and construction of Nairobi missing links. In addition, JICA is engaged with the
strengthening of health in Nyanza province, the strengthening of mathematics and science
in education sector, development of national water master plans and also projects
concerned with strengthening of capacity for supervision on road maintenance. The

23
diverse nature of the projects that are being undertaken by the organization will require
that the project managers develop appropriate operational strategies to achieve the
desired operational performance. On the basis of the above experience and different types
of projects, it is evident that the respondents were an invaluable source towards
realization of the research objective.

4.3 Operational Strategies at JICA

This section of the questionnaire sought to establish the existence of the operational
strategies, the form that the implementation of the strategies takes and the characteristics
that the strategies take. The findings of the study were that all the projects being
undertaken by JICA have operational strategies that guide them. It was also found that
the organizations operational strategy is mostly top-down and is aligned to the overall
corporate strategy that has been developed by the JICA.

The organization was found to have operations in different countries and with such a
spread in operations, it was imperative to integrating profit, people, and the planet into
the culture, strategy, and operations of companies. As (Hammer 2005) pointed, there are
immense benefits to nonmanufacturing processes to applying the time-based and waste-
minimization efforts that TQM and JIT had applied to manufacturing. This will explain
the findings of the study that even the non-profit oriented organizations have reasons to
embrace these operational strategies in their operations to be able to realize their
objectives as well as meet the expectations of the stakeholders.

On the questions of whether the respondents found the operations strategies being
employed in the organization is aligned with JICA’s corporate strategy as well as copies
good practices in other practices, the response was varied. The results to the questions are
represented in table 4.1 below.

24
Table 3: Operational strategy alignment to JICA’s corporate strategy

Cumulative
Frequency Percent Percent
NO 7 26 26
Yes 17 74 100.0
Total 24 100.0

The findings above show that JICA has been employing modern operation strategies that meet
the set international requirement. This findings support the position taken by Porter (1991) that as
organizations developed their core competencies, they included in the business processes, the
tools and concepts of TQM and JIT were applied to developing new product development and
managing supply chains. Therefore, the adoption of appropriate operational strategies is no
longer a source of competitiveness but rather it is necessary for realization of the organizational
objectives more effectively.

4.3.1 Alignment of operational strategies to government requirements

and organizational capabilities

The operational strategies adopted by a firm should be market led, meet government
requirements as well be based on capabilities and the resources of the projects. On
whether JICA’s projects meet the above criteria, the results was mixed with half of the
respondents agreeing to the same while the other half holding a contrary position. These
results are presented in table 4.2 below.

25
Table 4: Alignment of operational strategies to government requirements and
organizational capabilities

Cumulative
Frequency Percent Percent
Valid yes 12 50 50.0
no 12 50 100.0
Total 24 100.0

The findings from the questions shows that 50% of the respondents were of the view that
the present operational strategies of the JICA funded projects was compliant to the
government requirements as well as being based on the capabilities and resources of the
organization while the other 50% were of contrary opinion.

4.3.2 Success of operation Strategy in meeting project performance

measures

The researcher identified five operations strategy that affects the success of the projects
being undertaken by JICA. These strategies included lean operations, kaizen, enterprise
resource planning, just-in-time and the supply chain management. In a scale of 1 to 5 in
which 5 (very large extent and 1 (Not at all), the results of the findings is represented in
table 4.3 below.

26
Table 5: Effectiveness of the applied Operation Strategy

Mean Std. Deviation

Lean Operations 4.2857 .61125
Meets the objective of waste reduction, quality delivery
and customer satisfaction
Kaizen 4.1429 .36314
Meets the objective of continuous utilization of positive
learning and experiences gained from similar project inside
and outside Kenya to improve current project performance
Enterprise Resource Planning (ERP) 3.8571 .49725
Meets the objective of enhancing sharing of information in
all sections of the project to enable planning and optimum
use of resources
Just-In-Time (JIT) 3.9286 .91687
Meets the objective of timely delivery of products or
services as and when required.
Supply Chain Management 3.4143 1.18831
Meets the objective of enhancing strategic linkage or
vertical integration with suppliers, customers and other
stakeholders
Overall Mean 3.926

From the results above, the ability of the lean operations to achieve the objective of waste
reduction, quality delivery and customer satisfaction came out as an achievable goal
under the lean operations strategy (mean = 4.2857). The adoption of the Kaizen strategy
to achieve the objective of continuous utilization of positive learning and experience
gained in similar projects in the firm (mean= 4.1429). On the other extreme end of the
scale, supply chain management strategy aimed at enhancing strategic linkage or vertical
integration with suppliers, customers and other stakeholders was found to be the least
responsive strategy on JICA projects (mean = 3.4143).

The ability of the ERP to achieve enhancement sharing of information in all sections of
the project to enable planning and optimum use of resources was also found to have

27
minimum impact on the project’s success (mean = 3.8571). The operations strategy
adopted by firms helps in increasing their level of flexibility and in this present study, it
was evident that adoption of the lean operations has increased JICA’s projects to adapt to
changes in their operating environments. This position is similar to that pointed by Nori
et al., (1995) when they studied effect of operation strategy on operations of American
manufacturing firms and conclude that lean manufacturing enhanced the ability of the
firms to respond or conform to new situations which are unpredictable.

Flexibility associated with such operations strategy includes expansion, distribution,

routing, labour and equipment flexibility (Arias, 2003). Expansion flexibility is the ease
with which capacity can be added when needed. The flexibility helps when the operations
on the ground require enhancement.

4.4 Effect of Operations Strategies on Project Performance

This section of the questionnaire sought to establish how the various operational
strategies of the JICA affected the project performance of the organization. The results
were measured on a Likert scale with 5 (To a very large extent) and 1 (Not all). The
results are represented in the tables that follow.

Performance is based on the following criteria

Relevance – The extent to which the goal of the activity meets the needs of the
beneficiaries.

Effectiveness – The extent to which the project attains its objectives.

Efficiency – The extent outputs in relation to the inputs determine whether the aid uses
the least costly resources possible to achieve the desired results.

Impact – Examines positive and negative changes as a result of the project.

Sustainability – Relates to whether the projects are likely to continue after the closure of
the project.

28
4.4.1 Effect of Lean Strategy

Table 6: Effect of Lean Operations

Performance Criteria Std.

Mean Deviation
Relevance - JICA initiated projects are able to meet 4.2351 .65044
beneficiaries needs.
Effectiveness -the projects undertaken by JICA meets the 4.3265 .51355
intended objectives
Efficiency - The benefit - costs ratio of the organizations 3.1272 .66299
projects is high
Impact - JICA projects have a positive and negative 2.9745 .69929
changes to the community
Sustainability - The projects are able to continue even 2.4286 1.01635
after the handing over of the same
Overall Mean 3.4184

Current organizational projects are far from producing truly sustainable projects;
however, moving towards that goal is possible. One strategy for improving the
sustainability of projects is through lean operational strategies, which focuses on
removing waste from projects to make them more efficient.

The findings from the JICA projects showed that lean operations strategy have a great
effect on the project and meeting the needs of beneficiaries. Partha, (2011) states that
meeting the objectives is the biggest indicator of effectiveness By ensuring that there is
waste reduction and quality delivery lean operations strategy contributes highly to project
efficiency. The minimal standard deviations on the answers from the respondents show
that there was high level of agreement among the respondents. By adopting lean
operations, JICA projects are efficient and have a high benefit/cost ratio. The efficiency
arises from reduction in all forms of waste and a quality culture that is tied to all the
operations (4. 1272). Lean operations however had a low mean score in impact (2.4745)

29
and sustainability (2.4286) because the two criteria are affected by many exogenous
variables outside the project domain (Wills 2009).

4.4.2 Kaizen Strategy

Table 7: Effect of Kaizen Strategy on Project Performance at JICA

Performance Criteria Std.

Mean Deviation
Relevance - Kaizen strategy has enabled JICA projects to meet needs of 4.5714 .64621
the community and society in which the project is based.
Effectiveness - Kaizen strategy has enable JICA projects to achieve the 4.4286 .51355
objectives of what they were set up for.
Efficiency - The strategy has enabled JICA incur much lower cost for a 3.0000 .55470
high returns in a project
Impact - Kaizen strategy has enabled higher positive change projects at 3.1429 .66299
JICA
Sustainability - Kaizen oriented projects have been registering a 3.5000 1.01905
prolonged project life after project closure
Overall Mean 3.7286

The adoption of Kaizen operational strategy by JICA is intended to realize an intensive

and focused approach to process improvement. The strategy seeks operational
optimization by eliminating waste—non-value-added activities from the perspective of
the customer. Consequently, the adoption of Kaizen strategy has enabled JICA projects to
meet needs of the community and society in which the project is based (Mean= 4.5714)
as well as be able to achieve the objectives to which they were set for (mean = 4.4286).
However, a moderate result was found on whether the JICA projects had achieved a
minimal cost reduction as a result of adopting the Kaizen strategy. This finding will be
slightly different from the one found by Womack (2009) to the extent that conducting a
kaizen event helps to eliminate waste by empowering employees with the responsibility,
time, and tools to uncover areas for improvement and to support change. Similarly
moderate results were found in criteria’s of impact and sustainability because of other

30
exogenous factors. The results are however better than that of lean operations on the two
strategies

4.4.3 Enterprise Resource Planning

The ability of JICA projects to be relevant, effective, efficient, and sustainable and have
an impact as a result of adopting the ERP was also investigated. Managing a project
should take into consideration project strategy so that it is successful and will contribute
to the prosperity of the organization. In contrast, without good strategic management, a
project may be completed successfully and yet may make a relatively insignificant
contribution to the development of an organization. This goal is able to be achieved
through the adoption of the ERP strategy.

Table 8: Effect of Enterprise Resource Planning Strategy

Performance Criteria Std.

Deviatio
Mean n
Relevance – FRP installed by JICA relevance to the projects undertaken in 4.2545 .65044
the sense that they meet the needs of the beneficiaries
Effectiveness - The ERP system applied contributes to effectiveness in the 4.0571 .49725
sense that the projects are able to achieve intended objectives
Efficiency - The ERP system contributes to efficiency in the sense that we 3.3452 .55470
are able to realize our desired objectives at a minimal cost
Impact - ERP at JICA improves the level of impact that the projects have 3.1429 .66299
had in the community where the projects are based
Sustainability - ERP has enhanced sustainability of JICA projects. 4.0852 0.4237

Overall Mean 3.777

The findings from table 4.5 above shows that adoption of ERP is relevant to the projects
undertaken in the sense that it meets the needs of the beneficiaries (mean=4.2545) and
that implementation of ERP on JICA projects has enabled the organization to achieve its

31
objectives (mean=4.0571). This means that implementation of an effective ERP system
can bring both strategic and operational benefits to the organization even in a changing
and competitive environment. This supports the findings of Nicolaou (2004) since core
business processes are integrated throughout the organization through incorporation of
the best practices that will facilitate rapid decision making, cost reduction, and better
management control.

However, the finding was not conclusive to find an effective assessment method of
overall organizational performance to measure ERP system impact. In previous studies
the organizational performance has been measured by looking at both the financial and
nonfinancial benefits. Financial benefits include cost savings, employee productivity,
return on investment, and return on sales (Hunton et al., 2007) but supports the
nonfinancial benefits that include accuracy, timeliness, efficiency, and effectiveness
(Chand, et al., 2005).

4.5 Just-In-Time and Supply Chain Management Operational Strategies

The other operational strategies that are applied by JICA in its projects are the
management of the supply chain as well as just-in-time process. The researcher also
sought to establish the impact that the two strategies has had on the project performance.
The result findings are provided in table 4.6 below. The aim was to establish the extent to
which the strategies are relevant, effective, efficiency and impact it has on the projects
undertaken.

32
4.6: Effect of Just-In-Time and Supply Chain Management Project
Performance

Just-In-Time Std.
Mean Deviation
Delivery of services and goods has been enhanced due to the 3.9254 .63332
adoption of JIT system in the organizations operations
Relevance – quality delivery of services and goods to customers 4.1750 .51355
satisfaction has been enhanced due to the adoption of JIT system in
the projects operations.
Effectiveness - Our objective realization has been enhanced due to 3.9286 .47463
employment of the JIT system at JICA.
Efficiency - The benefit-cost-ratio has been improved with the 3.9286 .47463
adoption of the JIT strategy in our operations
Impact - The projects being undertaken have had great change to 4.2143 .89258
the beneficiaries due to the employment of JIT strategies
Overall Mean 4.0344

Employment of J.I.T. in the project has increased the sustainability of the projects
(4.2143). Realization of the objectives is also high because of the promptness of response
created by J.I.T. in all the interconnected departments of a project. Relevance or
achievement of objectives (3.2954); Efficiency or benefit/cost ration (3.2986); and impact
(3.2986) have recorded impressive means. This underscores the importance of J.I.T.
strategy in performance of JICA projects in Kenya.

33
4.4.6: Supply Chain Management (SCM)

4.9: Effect of Supply Chain Management to Project Performance

Supply Chain Management

Relevance - The linkages of JICA with the suppliers in the value 3.3571 .49725
chain has enhanced the relevant of the projects we undertake

Effectiveness - strategic linkage with the suppliers and customers 4.1000 .51887
through SCM.

Efficiency - Supply chain has improved the efficiency level of the 3.9286 .61573
projects being undertaken through effective cost management.

Impact - SCM has enhance impact of JICA operational strategies 3.0714 .61573
to the society as well as to the donors

Sustainability - The supply chain linkages are cubical project 2.1429 .77033
sustainability.

Overall Mean 3.321

SCM has minimal effect to the project sustainability (3.357). Effectiveness (4.100) and
efficiency (3.2986) have impressive mean scores implying that SCM is a major
determinant in project cost management and achievement of objectives. Ireland and
Webb (2007) that SCM continues to be adopted by organizations as the medium for
creating and sustaining a competitive advantage. These benefits attributed to supply chain
management include inventory reduction, improved delivery service, and shorter product
development cycles. SCM affect on relevance (3.3571) and input (3.0714) are moderate
and would give an reliable analytical relationship.

Generally, it was found that all the respondents appreciated the role of operations
strategies and that effective adoption of the strategies identified in the study positively
affects the performance of the organizations projects.

34
4.7 Regression Analysis
The determinants of a projects performance as a result of adopting the operational

strategies was investigated from the results of the respondents. From Table 4.7 below, the

established multiple linear regression equation becomes:

Y= 11.231 + 1.32X1 + 0.049X2 + 0.126X3 + 1.008X4 + 0.776X5

The results of the regression equation are generated from the table below. It shows that
there is a positive relationship between the adoption of operational strategy and the
performance of the projects in term of their relevance, impact to the society,
sustainability, cost management and timeliness of project delivery. It is evident from the
results that implementation of the ERP in the organization was found to have greater
impact on the performance of the projects because of the higher coefficient value.

Table 10: Results of General Least Square

Un-standardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t-values
1 (Constant) 11.231 .218 1.236

X1 1.32 .026 -.349 -1.049

X2 0.049 .012 -.585 0.266

X3 0.126 .5 -.017 -.061

X4 1.008 .006 .568 1.349

X5 0.776 0.127 .035 0.457

The coefficient of intercept C has a value (11.231) and is significant. The coefficient of
all the independent variables are positive at ά. = 5%, and implies that the increase in the
independent variables results in an increase in the organizations projects performance.
This finding did not come as a surprise because it was thought that the adoption of

35
operational strategies by an organization will have positive effects on an organization
performance and that based on the previous studies that have been carried on the subject
area in the developed countries, a positive relationship has been found in most of the
projects and that such strategies are a source of competitiveness.

Table 11: Model Summary for NOP with Control Variables

Adjusted R Std. Error of F -statistic

Model R R Square Square the Estimate
1 .763 .582 .392 .2296886 49.4

Source: Researchers’ computation

This R2 of 58.2 % means 58.2 % of the changes in the performance of the organizations
project is explained by the operations strategies employed by the organization. The
remaining 41.8% of the changes in the Y is explained by other factors not in the model.
These factors include those not include in variables like government, community and
human resources in the JICA Kenya projects. The F statistic is used to test the
significance of R. Overall; the model is significant as F-statistics is 49.4.

36
 CHAPTER FIVE:

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

The study found that as organizations develop their core competencies and included them
in their business processes, the tools and concepts of operation strategies were becoming
more and more important in the successful completion of projects. The application of
lean operations, kaizen, and enterprise resource planning, just-in-time and supply chain
management has become key ingredients of a project. Generally, the organization first
incorporated JIT between suppliers and project units, then moved to optimized logistics
between producers and distributors, then to customer relationship management (CRM)
with the community to make the project sustainable.

The findings from the research were that JICA has been employing modern operation
strategies on its projects that include Kaizen, lean operations, ERP, JIT and supply chain
management. The adoption of appropriate operational strategies is no longer a source of
competitiveness but rather it is necessary for realization of the organizational objectives
and realization of project sustainability after its completion. However, it was also found
that the operational strategies adopted by a firm should be market led, meet government
requirements as well be based on capabilities and the resources of the projects. It was
found that in the case of JICA, the operational strategies of were compliant to the
government requirements as well as being based on the capabilities and resources of the
organization.

The organization adopted the Kaizen strategy to achieve the objective of continuous
utilization of positive learning and experience gained in similar projects that were done
elsewhere under different experiences and that employment of ERP was meant to achieve
improved sharing of information in all sections of the project to enable planning and
optimum use of resources. The lean operations strategy facilitated enhanced ability of the
firms to respond or conform to new situations which are unpredictable. Flexibility
associated with such operations strategy includes expansion, distribution, routing, labour
37
and equipment flexibility. Expansion flexibility is concerned with the ease with which
capacity can be added when needed.

Another finding of the study was that the operations strategy adopted by an organization
should take into consideration project strategy so that it is a success and contribute to the
prosperity of the organization. In contrast, without good strategic management, a project
may be completed successfully and yet may make a relatively insignificant contribution
to the development of an organization. This goal is able to be achieved through the
adoption of the ERP strategy. The financial benefits associated with operation strategies
included cost savings, employee productivity, and benefits on cost. Nonfinancial benefits
include accuracy, timeliness, efficiency, and effectiveness. In summary, the study found
that adoption of operational strategies has a positive effect on the operational
performance of the task at hand.

5.2 Conclusion

The research findings presented show the positive effects of operations strategies on
project performance and with successful implementation of such projects, it there is high
chance of the projects sustenance. Combining the strengths of kaizen strategy, ERP and
supply chain management has the potential to improve the sustainability and successful
realization of organizations projects. Development of appropriate strategies is no longer
limited to the overall organization but rather even at individual project level and there is
need to ensure the project achieves a high benefit-cost-ratio especially for projects with
social responsible base.

From the findings of the study, it can also be concluded that the project success is no
longer found on the products and services an organization is offering alone but instead it
is those inimitable characteristics of an organization has such as policies and operational
strategies that will differentiate and give an organization the required competitiveness.
The benefits accruing to the companies as a result of the adoption of operational
strategies have been found to include, reduction in operational cost and also increasing

38
the acceptance of such projects by the communities where they are initiated. They should
however be weary of the challenges which inhibit them from obtaining economies of
scale and significantly reduces the economic value from the adoption of the appropriate
operational strategies.

5.3 Recommendations

The study found out that not all the operational strategies are being employed by the
organization in the projects being undertaken and consequently the benefits resulting
from the adoption of the same operational strategy are not being realized. This was more
evident with supply chain management. As a result, it is recommended that the
management consider training the project managers to effectively manage their supply
chain since efficient management of suppliers of materials and services will improve the
success rate of the projects

However, because of time constraints, present research was not able to examine
longitudinally the effect of operation strategies on different projects undertaken by other
organizations outside JICA. It is therefore recommended that a study be undertaken to
implement operational strategies in other countries and organizations over a period of
time.

5.4 Limitations of the study

The study focused on JICA funded projects in Kenya only. Being a localized study there
is need to undertake similar studies in JICA projects outside Kenya for the conclusions
arrives at and the study to be generalized about all JICA projects.

Similarly, the findings may not necessary be appropriately applied to other projects being
undertaken by similar organizations whose orientation could be different from that of
JICA.

39
Community involvement as role in operations strategy was not captured. This is because
the projects are meant to benefit of the communities. There is need therefore to study the
influence of the community to the operations. The community provides human resources,
inputs, acceptable, conducive environment and provision of sustainability all which are
important for the success of projects.

Time constraints limited the study to JICA projects only. The study needs to be
broadened to include a determined analysis of government and donors influence to the
operations of JICA

5.5 Suggestions for further research

Longitudinal effect of operations strategies on different projects undertaken by other

organizations outside JICA need to be undertaken. Such a study shall lead to a
generalization on applicability of such operational strategies leading to development of
principles and theories with a universal application. An exchange of learning experiences
between project based organizations would be possible where such universal application
is found to be applicable.

JICA Kenya being a herb of JICA projects in Somalia, Djibouti and other African
countries is a factor that requires to be considered. Its influence to operations of JICA
Kenya projects requires an in-depth analysis because such coordinating roles call for
attention, care and diligence that may have an effect on JICA projects in Kenya.

Other factors that explain performance of JICA projects in Kenya account for 41.8%. The
proportion is significant and requires to be researched on. The factors include
government donors, community, Japan government, physical factors of weather, literacy
etc.

40
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 APPENDIX I: QUESTIONNAIRE
Dear participant,
I am currently undertaking an academic research project on the operation strategies and
performance of Japan International Cooperation Agency funded projects in Kenya. Your
response is extremely important to the success of this study. I would like to assure you
that your response will be treated as "Strictly Confidential” and it will be used for
research purposes only. Please answer the questionnaire from the perspective that defines
your Project‘s operations strategy from the thematic segment within which your project
operate. Thank you very much for your help and cooperation.
Section A: About the respondent

1. Gender: Male: …………… Female: …………………….

2. Please specify your job title -----------------------------------------------------------------
3. Please specify how many years of working experience you have in the project? _____
4. Name of the project ………………………………………………………
5. Thematic area of the Project ……………………………………………..
(E.g. Agriculture, Health, Economic Infrastructure, Human Resource Development or
Water and Sanitation/Environment)

Section B: Operations strategies at JICA- (Lean operations, Kaizen

operation strategy, Enterprise Resource Planning (ERP), Just- I n- time
(JIT), Supply Chain Management (SCM) )
1.Does the project have written operation strategies?
Yes [ ] No. [ ]
2.If yes how is your operations strategy developed?
a) Aligned with JICA’s corporate strategy e.g. mission &vision (top down) Yes [ ] No. [ ]
b) By copying good practices in other projects and from JICA’s own experiences
(bottom up) Yes [ ] No. [ ]
c) Response to government requirements (market led) Yes [ ] No. [ ]
d) Based on the capabilities and the resources of the project (operations led)Yes [ ] No. [ ]

45
3. On a scale of 1-5 please indicate in the table below the degrees to which each
operation strategy meets its objective at the project that you work in performance of each
strategy in meeting its performance indicator as described.
Tick (√) as appropriate where:
(1) To a very large extent, (2) To a large extent, (3) To some extent, (4) To a small extent
(5) Not at all

OPERATION STRATEGY 1 2 3 4 5
LEAN OPERATIONS
Meets the objective of waste reduction, quality delivery and
customer satisfaction.

KAIZEN
Meets the objective of continuous utilization of positive
learning and experiences gained from similar project inside and
outside Kenya to improve current project performance
ENTERPRISE RESOURCE PLANNING (ERP)
Meets the objective of enhancing sharing of information in all
sections of the project to enable planning and optimum use of
resources.
JUST-IN-TIME (JIT)
Meets the objective of timely delivery of products or services as
and when required.
SUPPLY CHAIN MANAGEMENT
Meets the objective of enhancing strategic linkage or vertical
integration with suppliers, customers and other stakeholders
Others (specify)

46
 Section C. Operation Strategies and project Performance
4. On a scale of 1-5 indicate on the table below the extent to which the project operations
strategies influence project performance. Project performance is measured in terms of
relevance, effectiveness, efficiency, impact and sustainability.
Tick (√) as appropriate where:
(1) To a very large extent, (2) To a large extent, (3) To some extent, (4) To a small extent
(5) Not at all
5 4 3 2 1

Lean Operation Strategies

1 The companies projects are initiated only when they are

expected to meet stakeholders need

2 The projects undertaken by JICA are structured in a way

that meets its objectives

3 The benefit cots ratio of the organizations projects is high

4 The projects undertaken by JICA are analyzed to determine

their positive and negative impacts of the undertaking

5 The projects are undertaken in such a way that they will be

able to continue even after the handing offer of the same

Kaizen Strategy

1 The adoption of Kaizen strategy has enabled the firm to

identify projects that are relevant to the community and
society in which the project is based.

2 Kaizen strategy has enable the organization to identify

projects that are will achieve the objectives of JICA in
setting up the projects

47
3 The strategy has enabled JICA incur much lower cost for a
high returns in a project

4 Most of the projects undertaken by JICA under Kaizen

strategy has had higher impact than under any other project
that does not involve Kaizen

5 Kaizen oriented projects have been registering higher

sustainability

Enterprise Resource Planning

1 The enterprise resource planning system that has been

installed by JICA relevant to the projects undertaken in the
sense that it meets the needs of the beneficiaries

2 The ERP system applied is effective in the sense that we

are able to achieve our objectives

3 The ERP system is efficient in the sense that we are able to

realize our desired objectives at a minimal cost

4 Adoption of ERP at JICA improves the level of impact that

the projects have had in the community where the projects
are based.

5 The sustainability of the projects has been enhanced with

the adoption of the ERP

JUST – IN -TIME

1 Delivery of services and goods has been enhanced due to

the adoption of JIT system in the organizations operations

2 Our objective realization has been enhanced due to

employment of the JIT system at JICA.

48
3 The benefit-cost-ratio has been improved with the adoption
of the JIT strategy in our operations

4 The projects being undertaken have had great impact to the

beneficiaries due to the employment of JIT strategies

5 Adoption of the JIT strategies has increased project

sustainability undertaken by JICA

Supply Chain Management

1 The linkages of JICA with the suppliers in the value chain

has enhanced the relevant of the projects we undertake

2 The strategic linkage with the suppliers and customers has

improved the projects effectiveness

3 The management of the organizations Supply chain has

improved the efficiency level of the projects being
undertaken

4 The impact of JICA operational strategies is presently being

felt by the society as well as the donors

5 The supply chain linkages is sustainable

5. Briefly describe your view on the role of operations strategies on performance of your
project by answering following questions?

(a) Operations strategies are critical to project performance YES NO

(b) Operations strategies play an insignificant role to project performance

YES NO
Thank you for your cooperation.

49
APPENDIX II: JICA PROJECTS (2004-2013)
A) AGRICULTURE

1 The Smallholder Horticulture Empowerment and Promotion Unit Project (SHEP

UP)

2 Mwea Irrigation Development Project

3 Enhancing Community Resilience against Drought in Northern Kenya

(ECORAD)

4 Small Holder Horticulture Empowerment Project (SHEP)

5 Sustainable Smallholder Irrigation Development and Management project

(SIDEMAN)

6 Sustainable Smallholder Irrigation Development and Management in Semi-Arid

Lands project (SIDEMAN SAL)

7 Horticulture Produce Handling Facilities (HPHF)

8 Tana Delta Irrigation Project

9 Mwea Irrigation Agricultural Development Project

11 Community Agriculture Development for Semi-Arid Lands (CADSAL) Project

12 The project on rice research for tailor-made breeding and cultivation technology

development in Kenya (SATREPS)

13 Grant Assistance for Underprivileged Farmers (2KR) 2008

14 KR Food Assistance

15 Rice-based and Market-oriented Agriculture Promotion Project (RICEMAP)

B) WATER AND SANITATION/ENVIRONMENT

16 Project for Management of Non-Revenue Water in Kenya

17 Project for Augmentation of Water Supply System in Kapsabet Town

50
18 Project for Development of Drought Tolerant Trees for Adaptation to Climate
Change in Dry lands of Kenya

19 Project for Capacity Development for Effective Flood Management in prone

Areas

20 Project for Capacity Development of Solid Waste Management of Nairobi City

21 Project for Rural Water Supply Phase ll (Machakos, Makueni)

22 Project on the Development of the National Water Master Plan

C) ECONOMIC INFRASTRUCTURE

23 Strengthening of Capacity for Supervision and Operation on Road Maintenance

Works through Contracting

24 The Project for Dualling of Nairobi-Dagoreti Corner Road C60/C6

25 Construction of Nairobi Missing Links No. 3, 6 & 7

26 Mombasa Port Container Terminal Expansion Project

27 Mombasa Port Area Road Development Project

28 Olkaria I Unit 4&5 Geothermal Power

29 Sondu/Miriu Hydropower Project (Sang'oro Power Plant)

30 Olkaria-Lessos- Kisumu Transmission Line Construction

31 Establishment of Rural Electrification Model using Renewable Energy

32 Capacity Development for Rural Electrification using Renewable Energy

33 Project for Capacity Building of Child Care and Protection Officers in Juvenile
Justice System

34 Mombasa Airport Project

35 New Nyali Bridge Project

36 New Mtwapa Bridge Construction Project

37 The Telecommunication Modernization Project

38 Grain Silo Construction Project

39 Kilifi Bridge Construction Project

51
40 Greater Nakuru Water Supply Project

41 Tana Delta irrigation Project (1)

42 Horticultural Produce Handling Facilities Project

43 Trade Training Program for SME exporters (Phase 2)

44 Project for Improving OVOP Services

45 Project on Productivity Improvement

46 Capacity Building for the Customs Administration of the Eastern African Region

47 Project for Capacity Building of Child Care and Protection Officers in Juvenile
Justice System

48 Technical Cooperation Project on the Strengthening of the Fiscal and Monetary

System in Kenya

49 Master Plan Study for Kenya's Industrial Development (MAPSKID)

50 Master Plan for Development of Dongo Kundu, Mombasa Special Economic

Zone

51 Public Financial Management Reforms (PFMR)

52 Third Country Training on Geographic Information System (GIS)

D) HUMAN RESOURCE DEVELOPMENT

53 Strengthening Mathematics and Science Education (SMASE)

54 Project for the Upgrading and Refurbishment of the Centre for Mathematics,
Science and Technology Education in Africa

55 Incubating grassroots women capacity for sustainable socio-economic

empowerment and Livelihoods transformation

E) HEALTH

56 Strengthening of People Empowerment against HIV/AIDS in Kenya (SPEAK)

Project Phase 2

57 Technical Advisor for Tuberculosis Control for Kenya

52
58 Strengthening Management for Health in Nyanza Province

59 Strengthening Community Health Strategy

60 Partnership for Health System Strengthening in Africa

61 Project for Reinforcement of Vaccine Storage in Kenya

62 Project for Development of Rapid Diagnostics and Establishment of an Alert

System for Outbreaks of Yellow Fever and Rift Valley Fever in Kenya

63 Project for improvement of District Hospital in the Western Region of the

Republic of Kenya (Phase ll)

64 The project for HIV/AIDS Control

65 Supporting Health from School to Community in Mbita District

66 The Improvement of Maternal and Child Health Service in Remote Locations in

Kericho District

67 Community Participatory HIV Prevention of Mother to Child Transmission

Projects in Ukwala Division, Ugenya District

SOURCE: COMPILED FROM ANNUAL REPORTS (2004-2013)

53