Operational Capabilities in Driving MSME Sales Performance

Operational Capabilities in Driving MSME Sales Performance: Examining Raw Material Inventory, Production Process, Production Output, and Sales Turnover

Abstract

This study examines the influence of raw material inventory, production process, and production output on the sales turnover of Micro, Small, and Medium Enterprises (MSMEs) in Gayungan, Surabaya. Amidst economic uncertainty and intense competition, understanding the operational drivers of sales performance is for MSME sustainability. Using a quantitative approach, data were collected from 95 MSME respondents through structured questionnaires and analyzed using multiple linear regression. The results reveal that raw material inventory does not exert a significant partial effect on sales turnover, suggesting its role as a hygiene factor rather than a direct revenue driver. Conversely, both production process efficiency and production output quality demonstrate significant positive partial effects, indicating that operational excellence and product value are key determinants of sales performance. Furthermore, the simultaneous test confirms that the three variables collectively form a synergistic configuration that significantly influences sales turnover, supporting a systems-based perspective of operational management. These findings imply that MSME practitioners should prioritize holistic operational integration over isolated inventory accumulation. Strategic focus should be directed toward optimizing production workflows and enhancing product quality to maximize sales impact. This study contributes to the operational management literature by contextualizing the resource-performance relationship within the unique ecosystem of urban Indonesian MSMEs, offering empirical evidence for contingency-based managerial strategies.