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The Role of Industrial Clustering and Manufacturing Flexibility in Achieving High Innovation Capability and Operational Performance in Indonesian Manufacturing SMEs
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 Title & Authors
The Role of Industrial Clustering and Manufacturing Flexibility in Achieving High Innovation Capability and Operational Performance in Indonesian Manufacturing SMEs
Purwanto, Untung Setiyo; Kamaruddin, Shahrul; Mohamad, Norizah;
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 Abstract
This study aims to examine the effects of industrial clustering and manufacturing flexibility on innovation capability and operational performance. This study follow a survey method to collect data pertaining to the phenomena of industrial clustering, manufacturing flexibility, innovation capability, and operational performance by utilizing a single respondent design. A total of 124 Indonesian manufacturing SMEs are taken to test the proposed theoretical model by utilizing covariance-based structural equations modeling approach. It was found that both industrial clustering and manufacturing flexibility was positively associated with operational performance and innovation capability as well. In addition, innovation capability may account for the effects of industrial clustering and manufacturing flexibility on operational performance. This implies that manufacturing SMEs have to reorient their production and operation perspectives, including agglomerate with other similar or related SMEs to develop and utilize their own resources. The SMEs also need to possess some degree of manufacturing flexibility in respond to the uncertain environment and market changes. In addition, the SMEs should put a greater emphasize to use industrial cluster and manufacturing flexibility benefits to generate innovation capability to achieve high performance.
 Keywords
Industrial clustering;manufacturing flexibility;innovation capability;operational performance;manufacturing SMEs;
 Language
English
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 References
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