Analysis of the Application of Operational Management in Manufacturing Companies in Bandung City: The Effect of Production Efficiency, Product Innovation, and Customer Satisfaction on Financial Performance
DOI:
https://doi.org/10.58812/wsjee.v1i11.354Keywords:
Production Efficiency, Product Innovation, Customer Satisfaction, Financial PerformanceAbstract
The operational management of manufacturing companies in Bandung City plays a pivotal role in shaping their financial performance. This quantitative research aimed to analyze the implementation of operational management, with a focus on production efficiency, product innovation, and customer satisfaction, and their effects on financial performance. Structural Equation Modeling (SEM) with Partial Least Squares (PLS) was employed to assess these relationships. The research involved a sample of 130 manufacturing companies, spanning various sizes. The study found robust support for the following hypotheses: production efficiency positively influences financial performance, product innovation has a positive impact on financial performance, higher customer satisfaction is associated with improved financial performance, and there are significant interdependencies among production efficiency, product innovation, and customer satisfaction, collectively affecting financial performance. The findings emphasize the need for a holistic approach to operational management, innovation, and customer-centric strategies in manufacturing companies. These results provide valuable insights for managers and policymakers in Bandung City, offering practical recommendations for enhancing financial performance in the manufacturing sector.
References
F. Elmawati, H. Rohman, and M. Yasin, “Analisis Struktur Kinerja Dan Kluster Industri Unggulan,” J. Mhs. J. Ilm. Penal. dan Penelit. Mhs., vol. 5, no. 2, pp. 312–326, 2023.
N. A. P. Harahap, F. Al Qadri, D. I. Y. Harahap, M. Situmorang, and S. Wulandari, “Analisis Perkkembangan Industri Manufaktur Indonesia,” El-Mal J. Kaji. Ekon. Bisnis Islam, vol. 4, no. 5, pp. 1444–1450, 2023.
J. E. O. Rege and J. P. Gibson, “Animal genetic resources and economic development: issues in relation to economic valuation,” Ecol. Econ., vol. 45, no. 3, pp. 319–330, 2003.
D. Destari, H. Tannady, A. G. Zainal, S. Nurjanah, and J. M. J. Renwarin, “The Improvement of Employee’s Performance in Plastic Ore Industry: Mediating Role of Work Motivation.,” Turkish Online J. Qual. Inq., vol. 12, no. 7, 2021.
N. Trinandari Prasetyo Nugrahanti, “Dysfunctional Audit Behavior and Sign Off Premature Audit Procedures: Case Study of Jakarta Public Accounting Firm,” 2020.
M. Arora and A. Goel, “New Normal Manufacturing Industry Post-Pandemic 2020,” in Changing World Economic Order in the Post-Pandemic Period, IGI Global, 2023, pp. 220–232.
- Kurniawan, A. Maulana, and Y. Iskandar, “The Effect of Technology Adaptation and Government Financial Support on Sustainable Performance of MSMEs during the COVID-19 Pandemic,” Cogent Bus. Manag., vol. 10, no. 1, p. 2177400, 2023, doi: https://doi.org/10.1080/23311975.2023.2177400.
U. B. Jaman, “Legal Analysis of The Impact of Industrial Development on The Environment,” Easta J. Law Hum. Rights, vol. 1, no. 03, pp. 87–92, 2023.
T. P Nugrahanti and Y. Daulay, “Kemampuan Rasio Keuangan Dalam Memprediksi Perubahan Laba Masa Yang Akan Datang Pada Emiten Manufaktur Di Bursa Efek Indonesia,” 2008.
S. Supriandi and H. N. Muthmainah, “Penerapan Teknologi Mesin Pembelajaran Dalam Sistem Manufaktur: Kajian Bibliometrik,” J. Multidisiplin West Sci., vol. 2, no. 09, pp. 833–846, 2023.
S. Supriandi and M. Y. Masela, “Pengaruh Struktur Modal, Profitabilitas, Likuiditas Pasar Terhadap Nilai Perusahaan Pada Industri Manufaktur di Jawa Barat,” Sanskara Akunt. dan Keuang., vol. 1, no. 03, pp. 142–152, 2023.
T. P. Nugrahanti and A. S. Jahja, “Audit judgment performance: The effect of performance incentives, obedience pressures and ethical perceptions,” J. Environ. Account. Manag., vol. 6, no. 3, pp. 225–234, 2018.
F. Lindner and G. Reiner, “Industry 5.0 and Operations Management—the Importance of Human Factors,” in NOMS 2023-2023 IEEE/IFIP Network Operations and Management Symposium, IEEE, 2023, pp. 1–4.
D. Buhalis, “Strategic use of information technologies in the tourism industry,” Tour. Manag., vol. 19, no. 5, pp. 409–421, 1998.
K. Zhylenko and N. Meshko, “Dominants of business activity globalization processes,” Int. Econ. Policy, no. 2, pp. 43–81, 2019.
K. Nakashima, “Production and Quality Management for SDGs,” in Sustainable Development Disciplines for Society: Breaking Down the 5Ps—People, Planet, Prosperity, Peace, and Partnerships, Springer, 2022, pp. 107–121.
M. Volkova and V. Troian, “Operational Management in the Enterprise Management System,” Економіка та держава, no. 6, pp. 82–85, 2021.
Y. Iskandar, R. Pahrijal, and K. Kurniawan, “Sustainable HR Practices in Indonesian MSMEs from a Social Entrepreneurship Perspective: Training, Recruitment, Employee Engagement, Social Impact of Local Communities,” Int. J. Business, Law, Educ., vol. 4, no. 2, pp. 904–925, 2023.
D. Budiman, Y. Iskandar, and A. Y. Jasuni, “Millennials’ Development Strategy Agri-Socio-Preneur in West Java,” in International Conference on Economics, Management and Accounting (ICEMAC 2021), Atlantis Press, 2022, pp. 315–323.
C. Satria, E. Maulina, M. Purnomo, and T. Suryanto, “Performance Improvement in Small and Medium Enterprises; Financial Literacy and Business Experience: A case of Palembang City,” Calitatea, vol. 24, no. 193, pp. 268–277, 2023.
A. Z. Miftah, I. Widianingsih, E. A. Muhtar, and R. Sutriadi, “Reviving a City’s Economic Engine: The COVID-19 Pandemic Impact and the Private Sector’s Engagement in Bandung City,” Sustainability, vol. 15, no. 12, p. 9279, 2023.
A. Z. Miftah, I. Widianingsih, E. A. Muhtar, and R. Sutriadi, “Reviving Bandung’s Economic Engine: COVID-19 Pandemic Impact and the Private Sector’s Engagement,” 2023.
H. Izzati, A. Andiyan, and W. A. Darwin, “Filosofi Sunda dalam Konsep Lanskap Bangunan Kolonial di Kota Bandung,” ARSITEKTURA, vol. 21, no. 1, pp. 107–116.
A. O. Cahyaningrum, R. M. Permana, A. Y. Rukmana, S. Suroso, and F. Fachrurazi, “Regulatory Environmental Impact, Contract Law, Intellectual Property Rights, and Taxation of Entrepreneurial Activities in Bandung City,” J. Ekon. dan Kewirausahaan West Sci., vol. 1, no. 02, pp. 109–121, 2023.
J. I. Mzughulga, “Operational Resources Management In An Increasingly Digitized Business Environment: Technical Efficiency Analysis of Nigerian Brewery PLC from 2012-2021,” Sci. Prepr., 2023.
V. Tripathi et al., “Lean, green, and smart manufacturing: An ingenious framework for enhancing the sustainability of operations management on the shop floor in industry 4.0,” Proc. Inst. Mech. Eng. Part E J. Process Mech. Eng., p. 09544089231159834, 2023.
E. Adi, A. Anwar, Z. Baig, and S. Zeadally, “Machine learning and data analytics for the IoT,” Neural Comput. Appl., vol. 32, pp. 16205–16233, 2020.
S. Schwendemann, Z. Amjad, and A. Sikora, “A survey of machine-learning techniques for condition monitoring and predictive maintenance of bearings in grinding machines,” Comput. Ind., vol. 125, p. 103380, 2021.
H. Yuan and L. Zhao, “Construction and Empirical Analysis of the Index System of High-quality Development of Manufacturing in China,” in SHS Web of Conferences, EDP Sciences, 2023, p. 1053.
A. S. Capah, “PENGARUH EFEKTIVITAS PENGGUNAAN SISTEM INFORMASI AKUNTANSI, PENGENDALIAN INTERNAL DAN MOTIVASI KERJA TERHADAP KINERJA KARYAWAN (Studi Pada Perusahaan Jasa di Kabupaten Subang),” Prism. (Platform Ris. Mhs. Akuntansi), vol. 1, no. 6, pp. 1–14, 2020.
A. Salsabila, “Strategi Bertahan Pelaku Usaha Kecil Tahu Cibuntu Kota Bandung pada Tahun 2017-2021,” J. Ris. Ilmu Ekon. dan Bisnis, pp. 31–36, 2022.
N. S. Sari and A. Rizaldi, “Optimizing the Performance of SOE Employees in the Banking Sector by minimizing Workload, Burnout, and Job Stress,” J. Econ. Manag. Bus. Account., vol. 2, no. 2, pp. 139–145, 2022.
T. J. A. Jones, Professional management of housekeeping operations. John Wiley & Sons, 2007.
A. Eddy and J. Daily, “Systems Engineering Methods for Validation and Verification of Changes to Legacy Fielded Systems,” in 2023 IEEE International Systems Conference (SysCon), IEEE, 2023, pp. 1–8.
Г. СИТНИК, Г. СІЛАКОВА, and С. БЛАЖЕНКО, “Controlling of operational activity of trade enterprises,” · Sci. Fruct. (ВІСНИК Київського національного торговельно-економічного університету), vol. 146, no. 6, pp. 35–48, 2022.
M. S. Avi, “ANALYSIS OF CORPORATE OPERATIONAL PERFORMANCE: INTERPRETIVE ISSUES AND QUANTITATIVE DETERMINATIONS.,” Int. J. Bus. Manag. Stud., vol. 3, no. 11 NOVEMBER 2022, pp. 21–40, 2022.
G. Garcia-Garcia, Y. Singh, and S. Jagtap, “Optimising Changeover through Lean-Manufacturing Principles: A Case Study in a Food Factory,” Sustainability, vol. 14, no. 14, p. 8279, 2022.
L. Gao and L. Wan, “Does corporate environmental responsibility contribute to financial performance? A dual path analysis through operational efficiency and the cost of debt,” Corp. Soc. Responsib. Environ. Manag., vol. 30, no. 1, pp. 308–323, 2023.
Y. A. Lepekhina and E. Y. Grass, “A system of measures to achieve the efficiency of the production processes of the enterprise,” in SHS Web of Conferences, EDP Sciences, 2023.
C. F. Liew, J. Prakash, and K. S. Ong, “Development and validation of an equipment cost efficiency framework for integrating financial and operational performance assessment in manufacturing: a case study,” Int. J. Product. Qual. Manag., vol. 38, no. 3, pp. 388–412, 2023.
P. Lee and Y. W. Seo, “Directions for social enterprise from an efficiency perspective,” Sustainability, vol. 9, no. 10, p. 1914, 2017.
M. Thomas, R. C. Serrenho, S. O. Puga, J. M. Torres, S. O. Puga, and M. Stangaferro, “Effect of feeding a Saccharomyces cerevisiae fermentation product to Holstein cows exposed to high temperature and humidity conditions on milk production performance and efficiency—A pen-level trial,” J. Dairy Sci., 2023.
S. Rautela, S. Yerpude, and T. K. Singhal, “Augmentation of effectiveness of new product development through social media: an empirical validation,” Int. J. Public Sect. Perform. Manag., vol. 9, no. 1–2, pp. 5–24, 2022.
J. C. F. de Guimarães, E. A. Severo, C. J. C. Jabbour, A. B. L. de Sousa Jabbour, and A. F. P. Rosa, “The journey towards sustainable product development: why are some manufacturing companies better than others at product innovation?,” Technovation, vol. 103, p. 102239, 2021.
K. Nandakumar, J. B. Joshi, K. T. Valsaraj, and K. D. P. Nigam, “Perspectives on Manufacturing Innovation in Chemical Process Industries,” ACS Eng. Au, vol. 2, no. 1, pp. 3–11, 2022.
H. Witjaksono and M. T. Amir, “Hubungan Antara Strategi Inovasi terhadap Kinerja Keuangan di Perusahaan Manufaktur (Sebuah Tinjauan Literatur Sistematis pada Penelitian Inovasi dan Kinerja Perusahaan),” J-MAS (Jurnal Manaj. dan Sains), vol. 7, no. 1, pp. 224–237, 2022.
H. Gou, L. Su, G. Zhang, H. Li, and Z. Li, “Research on Telecom Customer Satisfaction Prediction Strategy,” in 2023 8th International Conference on Cloud Computing and Big Data Analytics (ICCCBDA), IEEE, 2023, pp. 593–598.
A. Jain, K. K. Ramachandran, S. Sharma, T. Sharma, P. Pareek, and B. Pant, “Detailed investigation of influence of machine learning (ML) and big data on digital transformation in marketing,” in 2022 2nd International Conference on Advance Computing and Innovative Technologies in Engineering (ICACITE), IEEE, 2022, pp. 1061–1065.
E. L. Melnic, “How to strengthen customer loyalty, using customer segmentation?,” Bull. Transilv. Univ. Brasov. Ser. V Econ. Sci., pp. 51–60, 2016.
M. M. Marpaung and L. H. Kusumah, “Systematic Literature Review: Identification of Service Attributes Servqual that Affect Customer Satisfaction in Distribution Companies”.
İ. F. CEYHAN and K. Merve, “ANALYZING THE FINANCIAL PERFORMANCE OF AUTOMOTIVE COMPANIES BEFORE AND AFTER INDUSTRY 4.0: AN APPLICATION IN THE BIST SUSTAINABILITY INDEX,” Mehmet Akif Ersoy Üniversitesi İktisadi ve İdari Bilim. Fakültesi Derg., vol. 10, no. 1, pp. 183–205, 2023.
M. Á. Mateo-Casalí, F. Fraile, A. Boza, and R. Poler, “A Maturity Model for Industry 4.0 Manufacturing Execution Systems,” in Industry 4.0: The Power of Data: Selected Papers from the 15th International Conference on Industrial Engineering and Industrial Management, Springer, 2023, pp. 213–223.
A. Trenz, C. Hoffmann, C. Lange, and R. Öchsner, “Increasing Energy Efficiency and Flexibility by Forecasting Production Energy Demand Based on Machine Learning,” in Global Conference on Sustainable Manufacturing, Springer International Publishing Cham, 2022, pp. 449–456.
J. Mayer and R. Jochem, “Quality Forecasts in Manufacturing Using Autoregressive Models,” Intell. Hum. Syst. Integr. (IHSI 2023) Integr. People Intell. Syst., vol. 69, no. 69, 2023.
O. A. Carboni and G. Medda, “Endogenous Innovation and Export Performance in Firms,” 2023.
E. Timotius, “THE ROLE OF INNOVATION IN BuSINESS STRATEGY AS A COMPETITIVE ADVANTAGE: EVIDENCE FROM INDONESIAN MSMES,” 2023.
P. Suchanek and M. Kralova, “Relationship Between Customer Expectations and Financial Performance of Food Industry Businesses in a Customer Satisfaction Model,” Econ. Bus. Rev., vol. 25, no. 2, pp. 103–117, 2023.
H. Gou, L. Su, G. Zhang, W. Huang, Y. Rao, and Y. Yang, “A xgboost method based on telecom customer satisfaction enhancement strategy,” in 2022 5th international conference on pattern recognition and artificial intelligence (PRAI), IEEE, 2022, pp. 209–213.
M. Guenther and P. Guenther, “The complex firm financial effects of customer satisfaction improvements,” Int. J. Res. Mark., vol. 38, no. 3, pp. 639–662, 2021.
P. Pamungkur, “ANALISIS PENGARUH KEPUASAN PELAYAN NASABAH TERHADAP KINERJA BANK PADA BANK MANDIRI CABANG PALANGKA RAYA,” Al-KALAM J. KOMUNIKASI, BISNIS DAN Manaj., vol. 9, no. 2, pp. 16–29, 2022.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Bambang Dwi Suseno, Efendi Sugianto, Eva Purnamasari, Asep Supriadi
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Facebook 
Instagram 
Twitter 
Youtube 
+62 821 1557 5700
westscience.journals@gmail.com