This study aims to analyse the effect of kaizen, innovation, and design on output quality; analyse the effect of kaizen, innovation, design, and output quality on operations performance; and analysing the effects of kaizen, innovation, and design on operations performance through output quality. Determination of the sample using total sampling technique and obtained 183 MSMEs as the research sample. The unit of analysis is the business owner or the person in charge of production in MSMEs, the manufacturing sector, with sub-sector of the furniture industry scattered in the City of Parepare. The data analysis used Structural Equation Modeling (SEM) analysis techniques with the AMOS program's help. The results showed that kaizen, innovation, and design had a positive effect and significant on output quality; kaizen, design, and output quality have a positive effect and significant on operations performance; innovation has a positive effect but not significant on operations performance; and kaizen, innovation, and design have a positive effect and significant on operations performance through output quality. Kaizen is the most dominant variable that affects improving the output quality and operations performance, which are the findings of this study. Other findings also show that efforts to improve operations performance through innovation have not been going well. The success of implementing innovation for MSMEs actors requires sufficient entrepreneurial readiness and the ability to read opportunities and dare to take risks.

Keywords : Kaizen, Innovation, Design, Output Quality, Operations Performance.