Physical and Technological Capital Efficiency for Profit Growth in Small and Medium Enterprises in Gauteng, South Africa: A Descriptive Qualitative Study

Boysana Lephoi Mbonyane (), Charles Mbohwa and Jan Harm Christiaan Pretorius
Additional contact information
Boysana Lephoi Mbonyane: Department of Operations Management, University of South Africa, Nkoana Simon Radipere Building 4-55, Preller Street, Muckleneuk, Pretoria P.O. Box 27392, South Africa
Charles Mbohwa: Department of Quality and Operations Management, Faculty of Engineering and the Built Environment, University of Johannesburg, APB Campus, Johannesburg P.O. Box 524, South Africa
Jan Harm Christiaan Pretorius: Postgraduate School of Engineering Management, University of Johannesburg, APB Campus, Johannesburg P.O. Box 524, South Africa

Sustainability, 2023, vol. 15, issue 8, 1-23

Abstract: The increasing number of businesses closing down and the persistent slow growth of small and medium enterprises (SMEs) within the manufacturing sector is a serious concern globally, including in South Africa. The SMEs that are currently existing are operating below the required efficiency level. Physical and technological capital efficiency integrating manufacturing systematic planning, work study, standardisation and inventory management to improve the profit of SMEs in Gauteng South Africa is inadequate, which is a major concern. This study aimed to explore the physical and technological capital constraints affecting SMEs’ profit growth and develop the physical and technological capital efficiency adoption model merging manufacturing systematic planning, work study, standardisation and inventory management for SME profit growth in Gauteng. The study was qualitative, exploratory and descriptive in nature. Face-to-face interviews were conducted targeting 15 owners/managers amongst SMEs in Gauteng. The findings show the most common causes of slow profit growth, which involve poor material handling, unfavourable workplace layout, unscheduled machine maintenance, network challenges, failure to adhere to workplace standards, insufficient product and material recording systems and poor work methods and procedures. The study revealed major concerns for SMEs that required intervention for these enterprises to sustain their profit growth. Thus, the adoption of the model concerning the incorporation of physical and technological capital efficiency tools to advance manufacturing operations be considered as the contributing insight into the profit growth of SMEs in Gauteng. Thus, this study recommends that the government creates an enabling environment for the adoption of this model for SMEs.

Keywords: manufacturing SMEs; efficiency; physical capital; technological capital; profit growth; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/8/6621/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/8/6621/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:8:p:6621-:d:1122988

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().