Does Capacity Utilization Mediate the Relationship between Operations Constraint Management and Value Chain Performance of Tea Processing Firms? Evidence from Kenya

The environment in which most businesses operate in is characterized by very stiff competition. Thus, organizations are designing various strategies to enable them create competitive advantage and improve the welfare of their stakeholders. This paper sought to establish the mediation role of capacity utilization in the relationship between operations constraint management and value chain performance among tea processing firms based on perspectives from Kenya. Specifically the study sought to answer the following research question: Is there a mediating role played by capacity utilization on the relationship between operations constraint management and value chain performance of tea processing firms in Kenya. The study adopted a cross-sectional research design. A sample of eighty-four (84) tea processing firms was used, and the respondents were the factory Chief accountants, production managers, and the environmental representatives. Multiple regression and correlation analysis were used to analyze the data. The findings show that the moderating effect of capacity utilization in the relationship between operations constraints management and the firm's value chain performance is positive and significant. Applying the Theory of Constraints (TOC) philosophy in the decision-making process in managing capacity, will improve the capacities of the bottleneck resources hence increase the Throughput and creating competitive advantage.