Determinants of Agile Manufacturing Systems Adoption and its Impact on Operational Performance Among Small and Medium-Scale Enterprises (SMEs) in Ogun State, Nigeria

Abstract

Manufacturing firms today face demand volatility, shorter product lifecycles, and increasing global competition, making traditional production systems inefficient. Agile Manufacturing Systems offer a suitable response, allowing organisations to adjust their production capacity fast in light of changes in the market and maintaining their performance across all aspects. The study uses a positivist cross-sectional survey method based on the Technology-Organization-Environment (TOE) Framework, Dynamic Capabilities Theory, and the Resource-Based View. A closed-ended questionnaire on a Likert scale (α range: 0.803–0.889) was conducted among 365 manufacturing small and medium-scale enterprises (SMEs) in Ogun State, Nigeria, with 239 valid responses collected (response rate = 65.5%). Multiple ordinary least squares regression [F(3, 235) = 80.993, p < 0.001], five simple linear models, and one-way ANOVA tests for moderating firm size were used. A three-factor TOE model accounted for 50.8% of the variance in adoption (R = 0.713, R² = 0.508). Organisational (β = 0.415, t = 9.062, p < 0.001) and environmental factors (β = 0.413) exerted comparably strong effects, both substantially exceeding the effect of technological factors (β = 0.345). The use of Agile Manufacturing Systems positively influenced all five performance criteria measured: Delivery Reliability (R² = 0.474), Product Quality (R² = 0.466), Manufacturing Lead Time (R² = 0.463), Production Flexibility (R² = 0.450), and Cost Efficiency (R² = 0.426). Firm size had no moderating effect on adoption [F = 0.190, p = 0.663, η² = 0.001]. The study shows the adoption of AMS is basically an organisational strategic process and has little relation to firm size. An excess emphasis on organisational factors raises concerns about the technology-driven perspective of the concept and implies far-reaching consequences for SME policy and strategy