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A meta-analytical study of the impact of Lean Practices on firm performance
Abstract
Lean Production (LP) is one of the most common initiatives in Operations Management that firms adopt to boost their competitiveness. The purpose of this paper is to examine the extant research on the relationship between LP and business performance (BP). The study analyses the data from 30 articles published from 2000 to 2016 that meet two targeted criteria, that they have: (i) empirically analysed the relationship between LP, or any measure of LP, and at least one measure of BP, and (ii) reported the effect size of the relationship between LP and BP measured with Pearson's correlation coefficients or related methods. Distinctions are made between two different performance outcomes (financial and market) and six LP practices. Using the Hunter and Schmidt (2004) meta-analysis based correlations approach, the obtained results show that a positive and moderate relationship exists between aggregate level LP and aggregate level business performance (r ̅´ = 0.31). There is also a positive relationship with market performance, but not with financial performance. Only three individual practices are statistically related to business performance (Process Control and Improvement, Workforce Development, and Customer Focus). The country's level of economic development is also found to act as a moderating variable in several of the studied relationships and to have a greater effect in Emerging Economies than in Advanced Economies.
... The concept of Lean Manufacturing has increasingly extended in the field of operations management to become a comprehensive business strategy (Buer et al., 2020;Liu et al., 2020), whilst its application has extended beyond manufacturing environments (Suarez-Barraza et al., 2012). For the successful deployment of lean in any organisation, several techniques, tools, and practices have been involved over time (Abreu-Ledón et al., 2018;Arumugam et al., 2020). Furthermore, most of the lean practices have focused on various aspects such as production processes, quality aspects, and maintenance (Barclay et al., 2021;Furlan et al., 2011;Shah & Ward, 2003;Shin & Alam, 2020). ...
... Meta-analysis research by Nair (2006) and Mackelprang and Nair (2010) validates the positive relation between lean and quality management practices, particularly with respect JIT and TQM, and operational performance. Further, a meta-analysis by Abreu-Ledón et al. (2018) confirmed the positive relationship between lean manufacturing practices and business performance. ...
... The following 12 practices used in the study include JIT, TQM, employee involvement, setup time reduction, continuous improvement, supplier relationship, customer focus, pull production, TPM, SPC, SMED, and waste elimination. According to research by Shah and Ward (2007), Camacho-Minano et al. (2013), andAbreu-Ledón et al. (2018), these practices are sufficient to perform the study. ...
Lean is one of the most powerful operational excellence methodologies in operations management that manufacturing organisations deploy to enhance their competitiveness. The objective of this study is to investigate published research with respect to the relationship between lean practices and organisational performance using a meta-analysis of correlation approach. This study gathered data from 40 articles published in reputed journals from 1993 to 2020 and analysed the effect of lean practices on organisational performance. In this context, this study utilised 12 lean practices and 4 different performance outcomes, which included operational, financial, market, and environmental. Using comprehensive meta-analysis software, the results indicate that a significant and strong positive relationship exists between aggregate lean practices and aggregate organisational performance (r = 0.37). There is also a significant strong positive relationship with all of the performance outcomes. The research highlights those individual practices have the strongest impact on organisational performance and emphasises the role of moderating variables in the relationship between lean practices and organisational performance. Theoretical and practical implications are discussed and limitations and future research directions are presented. The findings of this study provide a better understanding of lean deployment benefits in organisation. This research has significant contribution to the body of knowledge for the lean research community, especially for lean deployment in emerging sectors.
... The exclusion of certain studies from MAs may, therefore, be a cause of publication bias. Another example is the MA on lean production and firm's performance performed by Abreu-Ledón et al. (2018). These authors reported they tried to contact with authors of those primary studies that reported incomplete information, but none of them answered. ...
... In this case, the difficulty faced by the authors was that they followed the widespread practice in the management field of using chi-square-based tests (Geyskens et al., 2009), the result of which indicates the absence of heterogeneity. Abreu-Ledón et al. (2018) triangulated this possibility in their MAs on the impact of lean production on firm's performance, and, in fact, after using the Ratio2, they performed partial meta-regressions by using sector, time, and the country's level of economic development as potential moderators. Thus, triangulation will yield a more holistic perspective of potential heterogeneity. ...
... To illustrate some potential moderators, we decided to evaluate some of the most common control variables in the lean manufacturing literature: firm size (large vs. others), sector (machinery, electronics, and automotive [MEA] vs. others), and country (United States vs. others), which is consistent with the variables tested by Abreu-Ledón et al. (2018). The results allow us to determine whether any of these factors influence the relationships (Table 5). ...
We analyze the weaknesses of meta-analyses (MAs) in management research using as benchmark a scientific field where this technique shows a longer tradition: clinical research. We suggest four areas in which management research MA practices should improve: (1) availability of information and replicability of primary research, (2) correct application of statistical support, (3) execution of heterogeneity analyses, and (4) standardization of result reporting. Using a representative MA on an operations management topic, we identify qualitatively the aspects to be improved at each stage. We show the different results that could have been achieved by following standard procedures in clinical research, incorporating different “good practices” from this research field. Overall, these recommendations aim at improving the transparency and replicability of MAs, which can not only facilitate the accumulation of scientific knowledge but also intensify the dialogue between academia and practitioners.
JEL CLASSIFICATION: C01; M11; M1
... (Chiarini, 2014;Sundar et al., 2014;Wahab et al., 2013;Sezen et al. 2012 (Pampanelli et al., 2014;Sundar et al., 2014;Chakrabortty and Paul, 2011 (Metternich et al., 2013;Seifermann et al., 2014 (Holtskog, 2013;Gupta and Jain, 2014 (Parthasarathy and Sharma, 2016;Kholeif et al., 2007) . (Usmanij et al., 2013;Gupta and Kohli, 2006 (Netland et al., 2015;Yousef et al. 2015;Cherrafi et al. 2016Cherrafi et al. , 2017Uhrin et al., 2017;Fu et al., 2017;Martínez Leon and Calvo-Amodio, 2017;Sajan et al., 2017;Garza-Reyes et al., 2018;Ledón et al., 2018) تطبيق خالل من أو ، المنشأة موارد تخطيط نظم Chen et al., 2012;Ponorîca et ( al., 2014;Tijani and Ogundegi, 2014;Voulgaris et al., 2015;Parto et al., 2016;Goumas et al., 2018 (Adam et al., 2014;Powel et al., 2013b;Madapusi and D'Souza, 2012 (Aboelmaged,2018;Gupta et al., 2018;Rasit and Ibrahim, 2018;AL-Ma'altah, 2017;Konthong et al., 2016;Ruivo et al., 2015;Glover et al., 2014;Pishdad and Haider, 2013;Hofer et al., 2011;Preutisrunyanont et al., 2010;Benders et al., 2006;Boonstra, 2006 (Zhan et al., 2018;Fercoq et al., 2016;Garza-Reyes, 2015b;Pampanelli et al., 2014;Verrier et al., 2014;Dues et al., 2013;Sobral et al., 2013;Fercoq et al., 2013 (Helleno et al., 2017;Hasan et al., 2017;Gunarathne et al., 2016) . (Ponorîca et al., 2014;Tijani and Ogundegi, 2014;Spraakman and Sanchez-Rodriguez, 2010;Chen et al., 2012;Spathis, 2006;Granlund and Malmi, 2002) . ...
... (Boltena et al., 2014;Bhadauria et al., 2014;Lambert et al., 2000) . (Hart and Dowell, 2011;Hart, 1995 (Chae et al., 2014;Aragon-Correa and Sharma, 2003;Harrison et al., 2001;Brush and Artz, 1999 (Pallant, 2011;Field, 2013;Hair et al., 2014 (Chiarini, 2014;Faulkner and Badurdeen, 2014;Pampanelli et al. 2014;Verrier et al. 2014;Netland et al., 2015;Yousef et al. 2015;Cherrafi et al. 2016Cherrafi et al. , 2017Uhrin et al., 2017;Fu et al., 2017;Martínez Leon and Calvo-Amodio, 2017;Sajan et al., 2017;Garza-Reyes et al., 2018;Ledón et al., 2018) . بينما ال المعلومات نظم تطبيق خالل من المشكلة هذه معالجة اآلخر البعض اقترح الحديثة، محاسبية المنشأة موارد تخطيط نظم أهمها من التي (ERP) مثل ، : (Shang and Seddon, 2002;Spathis, 2013;and xas et al., 2012;Kanellou MeÝang and Su, 2009;Slabbert et al., 2016;Rouhani and Mehri, 2018 (Jenkin et al., 2011;Daly and Butler, 2009 (Alaskari et al., 2014;Iris and Cebeci, 2014;Powell et al., 2013a;Powel et al., 2013b;Madapusi and D'Souza, 2012 ...
مستخلص البحث (Abstract):
يعتبر موضوع تحسين أداء الاستدامة بمنشآت الأعمال، وخاصة بالمنشآت الصناعية، من القضايا البحثية التي ركز عليها الكثير من الباحثين والممارسين في الواقع العملي، خاصة وأن أداء الاستدامة يتضمن ثلاثة جوانب متوازنة ومتكاملة (الأداء الاقتصادي، البيئي، الاجتماعي).
لذا فإن هذه الدراسة تهدف إلي قياس وتحديد الأثر علي أداء الاستدامة بالمنشآت الصناعية، نتيجة تكامل تطبيق أفضل ممارسات الأعمال في مجال تكنولوجيا المعلومات (نظم تخطيط موارد المنشأة ERP)، مع أفضل ممارسات الأعمال في مجال التصنيع والمحاسبة الإدارية (ممارسات التصنيع المرنLean Production)، وبالتالي فإن هذه الدراسة تعد امتداداً للدراسات السابقة التي تناولت سبل تحسين أداء الاستدامة إما من خلال التطبيق المنفرد لنظم تخطيط موارد المنشأة (ERP)، أو التطبيق المنفرد لنظم وممارسات التصنيع المرن بهذه المنشآت، دون قيامها بإجراء التكامل بينهما، أوقياس أثر هذا التكامل. وفي سبيل تحقيق هذا الهدف، قامت الدراسة بتناول الإطار النظري لها، والذي يقوم علي الجمع بين نظريتين متكاملتين، هما النظرية الموقفية المبنية علي الموارد الطبيعية (CNRBV)، والنظرية المؤسسية (Institutional Theory)، حيث من خلالهما تم تكوين صورة متكاملة عن القوي والضغوط الداخلية والخارجية معاً، والتي تدفع المنشآت الصناعية نحو تطبيق الابتكارات الحديثة مثل نظم تخطيط موارد المنشأة، وممارسات التصنيع المرن، واتباع استراتيجيات وممارسات إدارية وبيئية معينة من شأنها العمل علي تحسين أداء الاستدامة، والتي يمكن أن تختلف من منشأة لأخري طبقا لعوامل موقفية مختلفة.
لتحقيق هدف الدراسة تم تطبيق المدخل الكمي في عملية جمع البيانات، وذلك من خلال إجراء دراسة تجريبية علي عينة تكونت من 144 مشاركاً من طلاب الماجستير المهني والدكتوراه المهنية في المحاسبة وإدارة الأعمال بكلية التجارة، بجامعتي القاهرة وعين شمس، وتم إجراء التحليل الإحصائي للبيانات باستخدام أسلوب الانحدار المتعدد (Multiple Regression Analysis)، حيث توصلت نتائج الدراسة إلي وجود علاقة معنوية إيجابية بين تطبيق نظم تخطيط موارد المنشأة، وكذلك تطبيق ممارسات التصنيع المرن (وأيضا تكامل تطبيقهما معا)، وبين تحسين أداء الاستدامة بالمنشآت الصناعية بالبيئة المصرية، في حين اتضح عدم وجود علاقة معنوية بين تطبيق نظم تخطيط موارد المنشأة، وبين تدعيم تطبيق ممارسات التصنيع المرن بهذه المنشآت.
توجد تطبيقات عملية لنتائج الدراسة، حيث يُمكن أن تخدم نتائجها عدة فئات في تحسين قراراتهم أو ممارساتهم، مثل المحاسبين الإداريين بالمنشآت الصناعية، والإدارة العليا بها، والمنشآت الصناعية نفسها وباقي أطراف سلسلة التوريد، وكذلك موردي تكنولوجيا وحزم برامج نظم تخطيط موارد المنشأة.
... Previous studies focused on the practical aspects of LM and overlooked the effects of HRM or organisational factors on LM . In support of this, the meta-analysis study of Abreu-Ledon et al. (2018) reveal that there is very little empirical evidence on the effect of LM on employees. In other words, the human aspect of LM has not yet received considerable attention (Ayough et al., 2020;Magnani et al., 2019). ...
The purpose of the present study is to identify and classify future research suggestions of Lean Management (LM) which are related to human resources (HR) aspects. Based on a systematic literature review (SLR) of peer reviewed journal articles in LM, a total of 147 articles published in 35 journals during, 2016–2020 by four major management science publishers were collected. The LM-HR future research suggestions identified in the literature were classified into themes through applying the ‘affinity diagram’ which then were prioritised through the ‘Pareto diagram’. An increase in the number of
articles with LM-HR future research suggestions is observed during the review period and the study highlights the need for considerable attention to be paid to future suggestions related to training, managerial, cultural and performance aspects of LM. Classification of themes reveals five broad theme categories, namely ‘top and middle management’, ‘employees’, ‘work features’, ‘LM implementation and results’ and ‘national and organisational culture’.
... Employee involvement is considered relevant to economic performance; sixteen articles have used these practices to measure performance impact; 100% indicate that the relationship between the two constructs is positive. This result confirms the findings mentioned by Abreu-Ledón et al. [119], who focus on the workforce as one of the practices that substantially impact economic performance. Marín-Garcia et al. [103] state that employee involvement does not directly influence economic performance but is rather a means to obtaining a sustainable advantage when applying L, SS, or LSS. ...
The Lean Six Sigma (LSS) philosophy and sustainability have become topics of interest since the 1990s; they have generally been analyzed together since 2012. Numerous professionals, managers, and researchers have sought methodologies by which to assess their impact and know their effectiveness within companies. During the past decade, the application of partial least squares structural equation modeling (PLS-SEM) has been widely accepted in various modeling, prediction, or multivariate analyses as a way to measure the impact of LSS on sustainability. This study conducts a literature review to identify the use of PLS-SEM in measuring the impact of LSS on sustainability. A systematic review methodology has been employed, applying five search criteria to three scientific database platforms. This approach has been helpful to identify PLS-SEM as a valuable methodology for measuring the impact of LSS on sustainability. One of the research findings is that LSS practices positively impact 83% of economic indicators, 78% of environmental indicators, and 70% of social indicators. This article creates a theoretical foundation for future research on these issues, outlining research opportunities to generate future studies. It also allows researchers and managers who are interested in improving sustainability indicators to access valuable knowledge regarding what types of LSS tools could be used.
... On the other hand, lean manufacturing employs the advantages of mass production in concert with the principles of Just-in-time and elimination of waste (non-value added activities) in order to reduce total production costs [9,10]. Lean practices focus on cost reduction by improving quality and throughput [11][12][13], including purchasing new machines, and performing rework [14,15]. In practice, a combination of agile and lean practices might be appropriate, or so called "leagile" [16][17][18][19]. ...
This research aims at identifying the appropriate lean and/or agile practice(s) to improve the performance of filling process in a pharmaceutical industry. Initially, the As-Is simulation model of production processes was built and then run to estimate the process’s output measures; averages of input bottle, work in process, waiting time, cycle time, and output bottles. The simulation results showed overall equipment effectiveness (OEE) score for some production processes were smaller than the recommended minimum world-class values. Consequently, agile and/or lean practices were utilized to generate nine To-Be improvement scenarios. Simulation was run to evaluate the process’s output measures and OEE score for each scenario. Finally, the slack based model (SBM) in data envelopment analysis was adopted to determine the best improvement alternative. The SBM results revealed that the lean practice “adding another head to the labeler machine” is the best alternative that may result in anticipated improvement in the OEE by 13.5%. In conclusion, the lean and/or agile practices can result in significant savings in production and quality costs.
The purpose of this paper is to propose a performance measurement framework to evaluate Lean Supply Chain Management (LSCM) performance. A literature review was performed to identify the main goals and performance indicators in LSCM. A questionnaire was designed that included the identified goals and measures. Next, based on data collected from international academics and practitioners with expertise in LSCM, a two-stage Delphi study using Fuzzy Delphi and Fuzzy DEMATEL methods was carried out to refine the most relevant goals and metrics and their interrelationships and establish benchmark values that are useful for managers to evaluate the performance achieved through the deployment of lean principles, practices, and techniques throughout the supply chain. Finally, an integrated performance measurement framework based on the balanced scorecard approach is proposed with a discussion of the academic and practical implications of the proposed framework.
This study analyses data from articles published from 2010 to 2019, which include empirical or theoretical-practical implications related to Human Resource Management (HRM) perspectives in a Lean environment. The main aim of this paper is to define Lean Management (LM) in light of HRM and identify HR themes. A Systematic Literature Review (SLR) of HRM in a Lean environment was carried out, based on the four well-known publishers, namely Emerald Online, Science Direct, Springer Link, and Taylor and Francis. In total, 180 relative papers published in 48 journals were collected. The affinity and the fishbone diagram were applied in order to group the practical implications of the studies into logical themes and sub-themes. Additionally, the Pareto diagram was used to prioritise the revealed themes. A high interest in soft-Lean practices has emerged in the last few decades. The practical implications of the reviewed articles have been grouped into eleven themes, revealing various aspects of HR involved in Lean management. Specifically, they concern Training, Leadership, Culture, Participation, HR department role, Commitment, Job Design, Teamwork, Communication, Impact on employee and Resistance tο change.
This study examines lean implementation's effects on hospital financial performance using survey and secondary data for a large sample of US hospitals. Using sociotechnical systems theory, a social context is identified that should motivate the use of lean process improvement tools (LPT) in a hospital setting and accentuate its performance benefits. Shah and Ward's employee involvement (EI) construct is adapted to a hospital setting to define a supportive social context for LPT, which is further shaped by organizational psychological safety (PS). The research model depicts PS as amplifying the effect of EI on LPT, which, in turn, influences a hospital's return on assets (ROA) via three potential pathways: (a) through enhanced revenues; and/or (b) through reduced hospital discharge costs; and/or (c) directly. The results show that EI engenders LPT and that this effect is heightened as PS improves. LPT is shown to positively impact ROA indirectly through higher revenues, but not through lower discharge costs. The findings reveal positive, indirect effects of EI on revenue and profitability at moderate/high levels of PS. Robustness is investigated using an alternate performance metric—hospital excess margin—with consistent results. Post hoc analyses explore potential mechanisms through which lean implementation may increase hospital revenues, including hospital throughput (discharges), readmission rate, experiential quality, length of stay, and overall patient recommendation. The analyses reveal that the impact of LPT on hospital revenue is potentially realized through higher hospital discharges. Overall, the study demonstrates that lean implementation as a sociotechnical system contributes to superior performance.
The purpose of this research is to explore the relationship between research and development (R&D)-funded innovation efforts and operational-level lean improvement efforts through the lens of the Resource-Based View (RBV), with a focus on the relationship between them. Does the “leaning” of a firm’s operations create barriers to change and inhibit the success of R&D-led innovation investment? Or, does the “leaning” of operations help organisations focus on priorities and simplify routines so that new R&D efforts are more effective? Our analysis of more than 850 firm-years’ worth of data showed that the relationship between lean and R&D productivity is nonlinear, specifically an inverted U-shape (concave). Leanness provides some early R&D productivity improvement benefits, but R&D productivity levelled then declined over time. In a follow-up industry-level analysis, we found that the effects of leanness on firm-level R&D productivity differed by industry, with some industries seeing evidence of positive effects from lean practices and others experiencing negative effects on R&D productivity from lean.
Academic literature on Lean Manufacturing (LM) is widely available. However, due to its fragmentation, the contribution of LM from practical and academic perspectives is controversial. This paper establishes the practical implications of LM studies carried out worldwide and identifies novel research streams. A Systematic Literature Review (SLR) of peer-reviewed journal articles was conducted. A total of 403 articles published in 62 journals during 2010–2019 were collected from four major management science publishers. An ‘affinity diagram’ was applied to organise the data into natural and logical themes. Conceptual frameworks concerning LM practical implications and future research agenda were formulated. Meaningful themes of LM practical implications and future research suggestions were revealed and classified into two categories. In category one pertaining to the internal nature of LM, themes related to the pre-implementation, implementation and post-implementation phases of LM were identified. In category two pertaining to the external nature of LM, themes related to the country in which the companies operate, the diverse managerial systems available, and the methodological research approach were identified. The main themes supported in the literature by most references were determined. Finally, respective statements concerning the practical implications of LM and the future research agenda are analytically presented.
Abstract
Profit oriented organizations are set up to make profits and they do employ every technique to achieve this grand objective. One way of ensuring maximisation of profits consistent with long-term stability has been the application of cost reduction techniques known as lean accounting. The objective of this study is to determine the impact of lean accounting on the financial performance of private hospitals in Kaduna State. The data of the study was collected using questionnaires that are structured in a five-point Likert scale. Forty questionnaires were distributed to the management of private hospitals, out of which thirty-eight questionnaires were filled and returned. The data of the study were analysed using regression techniques and the result of the analysis revealed that lean accounting has a significant and positive impact on the financial performance of private hospitals in Kaduna State. Therefore, the study concludes that the model of the study has significant ability to predict the relationship between lean accounting and financial performance of private hospitals in Kaduna State. In line with the findings of the study, the study recommends that manufacturing and service enterprises should undertake to train their staff on the lean principles and practice of lean accounting and ensure its full incorporation into the production process.
This article makes a case for the importance of exploring patterns in the relationship between the adoption of lean manufacturing practices and business performance. This relationship has been described as ambiguous, because it has variously appeared to be positive, insignificant, and negative. Accordingly, this article tests this relationship for non-linearity and shows that it follows the S-Curve theory. A survey of manufacturing companies in an industrial cluster in Brazil was undertaken. This region faces infrastructural challenges, such as geographic distance between purchasers and suppliers and a shortage of skilled Labour. Despite the conditions, these companies have significantly improved their operational, financial, and environmental performance through the adoption of lean practices. Thus, this article contributes to the literature on lean manufacturing by: (a) furthering the debate on the relationship between lean practices and business performance, and testing its adherence to the S-curve theory by means of survey research; and (b) simultaneously testing operational, financial and environmental performance as a result of the adoption of lean manufacturing practices. As a consequence of the S-shaped relationship demonstrated, managers need to be aware of the presence of inertial and saturation points in the adoption of lean manufacturing practices, so they can correctly allocate resources for improving the adoption of lean practices.
This paper presents a characterization and analysis of the content of academic production on innovation, published between 2008 and 2014 in Latin American journals with impact JCR (Journal Citation Report/WoS). a During this period, Latin America countries began to consolidate their system of scientific research, promoting their participation in global publications. Journals were selected according to their discipline, and articles were characterized in terms of a set of basic attributes, including the type of study, methodology, area of study, and topics explored. The results of this study show that the innovation research until 2014 is quite limited, few studies, low study complexity, unsophisticated analysis techniques and research fragmentation, which makes it difficult to compare regions and countries. It also highlights the need for a research agenda, which includes the systematic study of the determinants and effects of innovation, deepens in aspects related to innovation management such as technological and organizational capabilities, and discusses the design of innovation systems.
Purpose
The purpose of this paper is to gain insights about the applicability of Lean principles in software industry along with the Lean implementation issues.
Design/methodology/approach
Exploratory case studies have been carried out in five software companies. Data were collected by observation and semi-structured interviews with project managers. In this paper, case organizations are categorized as product vs project software development (SD) organization.
Findings
It is found that although Lean principles are being adopted in SD projects, application of all Lean principles is not visible. This research reveals that value and flow are more relevant in SD organizations, while value stream, pull and perfection are not conspicuous.
Originality/value
This paper would prove invaluable to lean practitioners and researchers to gain knowledge in lean SD. The paper puts forward the key issues that should be addressed for successful adoption of lean in SD. This study set out to determine the practitioners’ perception of the applicability of lean principles in SD projects. It provides a sound basis for further empirical research on adoption of lean principles in SD organizations.
The concept of integration has received considerable attention in operations and supply chain management literature in a time spanning over a decade. To advance theory development, it is important to critically examine the empirical findings in various integration studies. This paper undertakes an extensive investigation of the relationships between supply chain integration and various performance dimensions using a meta-analytical methodology. The study contributes to literature in four important ways. First, the findings empirically show that internal integration, supplier integration, and customer integration have significant impact on a firm's financial performance. Second, the study examines the impact of internal integration, supplier integration, and customer integration on a firm's operational performance; and its underlying dimensions of cost, quality, delivery, and flexibility separately. Third, the study points out the specific relationships between supply chain integration and performance that need to be further examined within contingency framework to discern the role of moderating factors. Finally, to provide direction for managerial decision-making, the study offers insights regarding integration dimension(s) that have largest breadth and depth of impact on various performance measures.
This paper introduces a literature review of 83 studies dealing with the degree of adoption of lean manufacturing practices around the world, and the links between those practices and organisation performance. The results of this study revealed that lean practices application still occurs in a fragmented way, disregarding the systemic linkage that is essential to lean manufacturing. Forty-one articles have suggested a positive effect of lean practices in at least one operational, financial and/or environmental performance metric. Nevertheless, five studies indicated that some lean practices had a negative effect on operational or financial performance. High demand variability, a perceived result of long-term lean manufacturing implementation, a country/company’s organisational culture and the difficulty of traditional costing production systems to measure and compare investments and economic gains from adopting lean manufacturing over time are some of the reasons to explain that negative effect of lean practice on performance.
The purpose of this study is to understand the relationship between green supply chain management (GSCM) practices and firm performance in the manufacturing sector in Asian emerging economies (AEE) based on empirical evidence. Through a systematic literature review, we identified 50 articles that surveyed 11,127 manufacturing companies in the AEE and were published between 1996 and 2015. Subsequently, a conceptual framework was developed and analyzed through a meta-analysis of 130 effects from 25,680 effect sizes. The findings revealed that the GSCM practices lead to better performance in four aspects: economic, environmental, operational, and social performance. Moreover, the results indicate that industry type, firm size, ISO certification, and export orientation moderate several of the GSCM practice-performance relationships. Moreover, the findings of this research help managers and policy makers to have more confidence in the adoption of GSCM practices to improve firm performance. Such results also help researchers to better channel their efforts in studying the GSCM practices in Asian emerging economies. In addition, as meta-analysis has not been widely used in the supply chain management literature, our study is an important step in maturing the academic field by adopting this technique for confirming GSCM practice-performance relationships in the manufacturing sector of Asian emerging economies.
The purpose of the paper is to examine the importance of incorporating lean production (LEAN) in the Malaysian manufacturing industry. Lean production investigated in this paper consists of two important dimensions namely Just-In-Time and technology & innovation. This study utilizes two hundred and five manufacturing companies, selected randomly from the Federation of Malaysian Manufacturers Directory. The study measures senior production or lean managers' perception of the lean production and the level of performances in their companies. Grounded by the Program Theory, this paper specifically investigates whether the length of lean adoption moderates the linkage between lean production and business performance using the hierarchical regression analysis. Pearson's correlations exhibit significant correlations between the two lean practices and business performance measures. The result also provides evidence that the length of lean adoption moderates the linkage between technology & innovation and business performance (operationalized by ROS and ROI). Therefore, long term adopters of lean production would benefit in the long run. The findings of the study provide a striking demonstration of the importance of lean in enhancing the performances of the Malaysian manufacturing companies. The result indicates that manufacturing companies should emphasize greater attention to 'new technology and innovation' and 'Just–in-Time' as well as a greater degree of management support for lean production enhancement initiatives.
Supply chain integration (SCI) is recognized as strategic process management that can be instrumental for creating positional advantages associated with improved firm performance. However, despite rigorous execution, recent meta-analyses derive different conclusions about the benefits of SCI. We propose that these inconsistencies may be associated with selection bias, failure to consider the mediating routes by which SCI affects financial performance, and lack of investigation of moderators. To address these issues, we apply positional advantage theory and the resource-based view, and focus on mitigating the potential selection bias by aggregating findings from 170 previous investigations in a comprehensive meta-analysis, to examine how discrete dimensions of SCI enhance firm financial performance through three types of intermediate firm performance. The moderating effects of time, relationship quality, and national culture are also assessed. The findings confirm that each dimension of SCI indeed improves financial performance. However, contrary to expectations, relational and strategic types of intermediate performance associated with superior customer value positional advantage have stronger mediating effects than operational performance associated with lower cost positional advantage. In addition, time, relationship quality, and collectivist national culture strengthen the associations between some dimensions of SCI and firm performance. Our study findings are reconciled with those from recent meta-analytic studies, and implications arising from our conclusions that may inform practice about how to effectively leverage SCI are presented.
Despite lean thinking being a broadly accepted approach, there is still some confusion within present terminology regarding 'lean' and its issues. This paper presents the results of a research survey carried out within 72 medium and large-sized Slovenian manufacturing companies. The sample selection criteria adopted, together with the research items investigated, ensured a generic framework for our research. Eight crucial areas were identified based on a synthesis of 'lean' literature for assessing and measuring the degree of lean implementation within existing manufacturing systems: value concept and customers, value stream mapping (VSM), pull/kanban and flow, waste elimination, productive maintenance, just-in-time (JIT), employee involvement and the development of excellent suppliers (lean suppliers). Variables were constructed within these areas using Likert scales, and statistical validity and reliability analyses. For example, when measuring the developments of excellent suppliers the focus should be on three variables: on time deliveries, supplier relationships, and a skilled and loyal supplier. The results show that the developed variables can be important both for understanding 'lean' and measuring the degree of lean implementation within existing manufacturing systems.
Purpose
– Lean systems thinking was widely studied using relevant variables, but there is a dearth of published theoretical or empirical evidence about the cultural aspects of lean processes. The lack of conceptual development is one of the motivations for this study. Do organizational cultural variations correlate with the success and effectiveness of lean processes? What organizational infrastructures are required for effective lean implementation and continuation? The paper aims to discuss these issues.
Design/methodology/approach
– Examining literature in the area of lean production and lean management, the authors sought current literature at the intersection of organizational culture and lean processes, particularly implementation and sustainability, but found little relating to the topic. Therefore, using the Competing Values Framework taxonomy, the authors examine this intersection, relying on related research in the areas.
Findings
– In this paper, a brief discussion of lean processes in relation to organizational culture leads to propositions that identify the various cultural dimensions and their purported effect on lean implementation and sustainability. A model of this interaction is developed. Those quadrants of the Competing Values Framework that might be useful in developing research directions for the future are identified.
Research limitations/implications
– Future research directions include the measurement of organizational culture in firms that have implemented lean processes. This would be a step toward looking at the effect that the different quadrants in the Competing Values Framework have on various elements of lean efforts. This would take a significant amount of work, because the manufacturing industry, the leader in implementing and sustaining lean processes, may have institutionalized particular organizational cultures. It would be an interesting step forward in the understanding of how lean processes are operationalized across different firms and industries. However, there are multiple ways to examine culture; the authors believe this method allows the capture of the entire spectrum.
Practical implications
– Knowing which dimensions influence lean effectiveness and the way that they wield that influence allows managers to develop the firm’s organizational culture to one that will support implementing and sustaining lean efforts. The challenge to implement and sustain lean processes lies in the need to identify the organizational culture infrastructure that will allow this system that was first used by Japanese firms to operate well in other organizational contexts. The values and norms that underlie lean processes may create conflict with the culture that already exists within the organization; such divergence retards adoption and performance.
Originality/value
– There is a lack of research at the critical intersection of organizational culture and lean implementation/sustainability. Culture is key to making the changes required of lean implementation and in sustaining the drive toward lean production and management. The paper begins to fill that gap.
Just-in-time (JIT) production and total productive maintenance (TPM) have been subjective to numerous studies in isolation. This study attempts to measure the impact of TPM on the level of JIT production implementation and development, and the impact of both on JIT performance and competitive performance. Multi-item scales have been constructed to measure key components of JIT and TPM for manufacturing firms in machinery, electrical & electronics, and automobile industries. We use five scales to measure JIT production practices; Equipment Layout, JIT Delivery by Suppliers, Kanban/Pull System, Setup Time Reduction, and Repetitive Nature of Master Schedule. To measure TPM practices, we use four scales; Autonomous Maintenance, Preventive Maintenance, Maintenance Support, and Team Based Maintenance. To measure JIT performance we use inventory turnover and cycle time. Competitive performance of the plant has been measured based on five dimensions; cost, quality, flexibility, delivery, and on time new product launch. Based on the survey data collected in Japan, Korea, USA, and Germany, we find that TPM will positively influence and facilitate the implementation level of JIT through Preventive Maintenance, Maintenance Support, and Team Based Maintenance. Country and industry explained a significant portion of variance in the implementation level of JIT production. The results indicate that both JIT and TPM in isolation explain a significant portion of the variance in all the measures of JIT performance and competitive performance after controlling for country and industry effect. Given the impact of JIT production on JIT performance and competitive performance, the addition of TPM resulted in an additional significant improvement in inventory turnover as well as in the measures of cost, quality and on time new product launch. Country and industry did not explain significant portion of the variance in both JIT and competitive performances.
Purpose
– The advent of recession at the beginning of twenty-first century forced many organizations worldwide to reduce cost and to be more responsive to customer demands. Lean Manufacturing (LM) has been widely perceived by industry as an answer to these requirements because LM reduces waste without additional requirements of resources. This led to a spurt in LM research across the globe mostly through empirical and exploratory studies which resulted in a plethora of LM definitions with divergent scopes, objectives, performance indicators, tools/techniques/methodologies, and concepts/elements. The purpose of this paper is to review LM literature and report these divergent definitions, scopes, objectives, and tools/techniques/methodologies.
Design/methodology/approach
– This paper highlights various definitions by various researchers and practitioners. A total of 209 research papers have been reviewed for the research contribution, research methodology adopted, tools/techniques/methodologies used, type of industry, author profile, country of research, and year of publication.
Findings
– There are plethora of LM definitions with divergent objectives and scope. Theory verification through empirical and exploratory studies has been the focus of research in LM. Automotive industry has been the focus of LM research but LM has also been adopted by other types of industries also. One of the critical implementation factors of LM is simultaneous adoption of leanness in supply chain. LM has become an integrated system composed of highly integrated elements and a wide variety of management practices. There is lack of standard LM implementation process/framework.
Originality/value
– The paper reviews 209 research papers for their research contribution, research methodology, author profile, type of industry, and tools/techniques/methodology used. Various characteristics of LM definitions are also reviewed.
Empirical evidence shows that profitability does not always rise when lean management (LM) is implemented.
This paper reviews the literature that has empirically analysed how LM impacts financial performance in
order to identify the most used assessment model and the direction and significance of the findings. We have
found that the most comprehensive models, those considering financial and operational indicators and
contextual factors, find a positive and significant impact of LM on financial performance. These findings can
benefit managers requiring an assessment of LM and the building of an evaluation system and can serve as a
guideline for monitoring LM implementation.
Purpose - The notion of achieving competitive advantage using a strategic customer service orientation (SCSO) has received increased research attention. The purpose of this paper is to examine the concept of SCSO in the context of rapidly changing competitive market environments. An organization-wide SCSO can be implemented through lean manufacturing practices to achieve favorable operational and business performances (BPs). Design/methodology/approach - This study employs survey methodology to examine a research model that theorizes eight hypotheses with respect to the relationships among SCSO, human and technical lean practices, and performance outcomes (operational and BPs). Data from 571 firms participating in the International Manufacturing Strategy Survey (IMSS) IV are analyzed using structural equation modeling (AMOS 20). Findings - The findings suggest that firms with a SCSO implement both human and technical aspects of lean manufacturing practices leading to better performance results. The findings also indicate that performance outcomes are indirectly influenced through the combined efforts of technical and human lean manufacturing practices. Research limitations/implications - Generalizations here are limited to manufacturing firms. SCSO beyond manufacturing firms like healthcare or high-tech organizations that implement lean practices in response to a SCSO have yet to be examined and provide fertile opportunities for future research. Practical implications - These findings suggest practical insight into how to integrate service-driven value creation and delivery for achieving both cost effectiveness and quality performance outcomes. Originality/value - The examination of the consequences of SCSO in manufacturing firms from multiple countries is a novel contribution in the field, as is the examination of technical and human lean practices. It comes at a time when manufacturing firms increasingly recognize the value of services for global competitiveness.
The concept of total quality management (TQM) has attracted many researchers from a variety of disciplines. In particular, the literature has addressed the impact of TQM on a firm’s operations and performance. However, disparate perspectives on the relationship between TQM and a firm’s financial performance have emerged. In this paper, we suggest an interconnected relationship among TQM, organisational learning capability (OLC), business innovativeness, and a firm’s financial performance and propose that OLC and business innovativeness mediate the relationship between TQM and a firm’s financial performance. By studying 193 firms in Turkey, we found that: (1) TQM affects OLC and a firm’s business innovativeness, (2) OLC influences a firm’s business innovativeness and (3) a firm’s business innovativeness affects its financial performance. Also, we found that OLC and business innovativeness in a firm mediate the relationship between TQM and the firm’s financial performance.
Purpose
– This study aims to investigate the relationship between lean practices, operations performance (OP), and business performance (BP).
Design/methodology/approach
– This survey-based study was a cross-sectional study. The samples were drawn by using stratified random sampling procedure from large Indonesian manufacturing companies based on the directory provided by the Data and Information Center of Indonesian Ministry of Industry with the final number of respondents of 139. Four main hypotheses were developed and tested statistically by applying multivariate data analyses.
Findings
– The results provided evidence that lean practices should be implemented holistically. Lean practices have a positive and significant impact on both OP and BP. Moreover, OP partially mediates the relationship between lean practices and BP.
Research limitations/implications
– The data used in this survey represent self-reporting by mainly the middle or top management in production.
Practical implications
– This study contributes to the lean manufacturing (LM) body of knowledge by identifying the relationships between the LM practices, OP, and BP. Understanding these relationships will help practitioners in making better decisions in manufacturing organizations as well as enable application of the concepts in this study to other contexts such as service organizations.
Originality/value
– Although there are a growing number of anecdotal and empirical evidences in favor of LM in manufacturing environment, there has been almost no theory-building and methodologically rigorous research examining the link between LM, OP, and BP. This study is addressed to fill this gap.
Purpose
This paper aims to identify factors that considerably impact business performance of lean manufacturers (companies with extensive use of lean tools and excellent operational performance).
Design/methodology/approach
IMSS IV (International Manufacturing Strategy Survey) data bank is used for statistical analysis. It contains 711 valid observations from 23 countries from the time period between 2005 February and 2006 March. Out of the 711 responding organization data of 453 firms are analyzed. Quantitative analyses are done by cluster, ANOVA, and regression analyses.
Findings
Many factors influencing business performance of lean producers are outside of the scope of Operations Management (e.g. market dynamics, new entrants, and customization). Production's contribution to business performance is limited to product/service positioning, supplier and capacity management.
Research limitations/implications
The most important limitation is that the database used in the study was created for more general purposes. Although our results do not show any difference among industries, we only consider cultural impact at regional level. The explanatory power of our model reveals that we could have overlooked many important factors (e.g. innovation capability of business unit, firm role in the supply chain), so further research (e.g. review of strategic management literature) is required to enhance the reliability of variables.
Originality/value
Empirical results regarding improvements in business performance of lean companies are ambiguous. The study highlights key areas of lean production that contribute to superior business performance. It will help managers to explore both operational and business benefits of lean implementation.
The purpose of this paper is to empirically investigate the relationship between lean production implementation and financial performance. Particular emphasis is placed on the mediating role of inventory leanness in deriving the financial performance benefits commonly associated with lean production. Moreover, the interaction among different lean practice bundles in affecting financial and inventory performance is assessed. Based on an analysis of a combination of survey and secondary data, the effect of lean production on financial performance is found to be partially mediated by inventory leanness. In addition, there is strong evidence that the concurrent implementation of internally-focused and externally-focused lean practices yields greater performance benefits than selective lean production implementation. Thus, this study contributes to the theory of lean production by providing insights into the mediated and moderated effects of lean production on inventory leanness and financial performance.
Purpose
The purpose of this paper is to obtain a better understanding of the extent to which lean production permeates manufacturing companies in Malaysia by drawing on supply chain management (SCM) managers' or production managers' perception of lean production practices and level of performances in the industry.
Design/methodology/approach
The instrument used in this study is a structured survey questionnaire consisting of two major parts. The first part comprises several variables measuring lean production practices, and the second part consists of several performance measurements. Sample companies are chosen from Malaysian manufacturing companies listed in the Federation of Malaysian Manufacturers directory. From the 300 companies sampled, 200 responses were completed, representing a 67 per cent response rate.
Findings
The results support the conceptual model, demonstrating strong association between lean production, product quality performance, and business performance. The structural equation modelling (SEM) results reveal that “reduced setup time” appears to be of primary importance in the linkage between lean production, product quality performance and business performance. It is also instructive, from a score of 67.21 on the Malaysian Lean Production Index (MLPI), that manufacturing companies in Malaysia must marshal their effort to implement a more effective lean production SCM in order to improve on product quality performance and business performance.
Practical implications
This research adds to the body of knowledge on lean production SCM in manufacturing industry. This paper may be of particular interest to practicing production managers, or SCM managers, as it suggests what factors should be emphasized in lean production.
Originality/value
The originality of this paper lies within the context in which this study is undertaken as it seeks to address key relationships between lean production, product quality performance and business performance within the Malaysian manufacturing industry, where relatively few studies are available. In addition, relationships between constructs are analyzed through SEM that measures not only magnitude but also the causal direction of the relationships.
Purpose
– The purpose of this paper is to present a research model that defines the inter‐relationships between strategic green orientation, integrated product development, supply chain coordination, green performance outcomes and business unit performance. This paper aims to address innovation issues by integrating strategic orientation, internal business practices, supply chain coordination, and performance outcomes measures.
Design/methodology/approach
– The international data of 711 firms accessed through the International Manufacturing Strategy Survey (IMSS IV) are used to validate this model.
Findings
– A firm's strategic green orientation involves past green practices, implementation of innovative environment improvement program and future commitment for environmental practices. This strategic green orientation is supported by a set of inter‐organizational innovation practices such as integrated product development practices, effective coordination of supply chain network and relevant and measurable performance outcomes.
Originality/value
– The model, variables, empirical tests and results in this paper suggest a new understanding about strategic green orientation and its relationships with product development practices and supply chain coordination. The framework is intended both to explicitly inform senior executives of the importance of inter‐organizational innovation practices such as strategic green orientation in terms of past, present and future practices as well as to the factors that effectively implement such strategic direction and commitment. It is also intended to provide a lens with which further research can be directed to enhance environmental reputation and outcomes of firms through new product development practices and supply chain network coordination and the sustainable long‐term competitive advantages of the firms.
Supply chain strategies and practices depend on not only the nature of the business, the competitive environment, and technological intensity of the product, but also on product and market characteristics. Consequently, supply chain integration (SCI) strategies should be evaluated in the light of a company’s market and product strategies. This paper examines the effect of SCI on the relationship between diversification and a firm’s competitive performance. The results of the study can be useful in integrating supply chain strategy into market and product diversification (PD) strategy. By comparing the main and interaction effects of SCI and diversification on performance, the paper shows that SCI strategy modifies the relationship between diversification and performance. Additionally, it is argued that coordinated use of SCI and diversification strategies has a significant effect on firm performance.
Recent research on total quality management (TQM) has examined the relationships between the practices of quality management and various levels of organizational performance. These studies have produced mixed results, probably because of the nature of the research designs used such as measuring TQM or performance as a single construct. Based on a comprehensive literature review, this study identifies the relationships among TQM practices and examines the direct and indirect effects of these practices on various performance levels. A proposed research model and hypotheses are tested by using cross‐sectional mail survey data collected from firms operating in the US. The test of the structural model supports the proposed hypotheses. The implications of the findings for researchers and practitioners are discussed and further research directions are offered.
Management literature has suggested that contextual factors may present strong inertial forces within organizations that inhibit implementations that appear technically rational [R.R. Nelson, S.G. Winter, An Evolutionary Theory of Economic Change, Harvard University Press, Cambridge, MA, 1982]. This paper examines the effects of three contextual factors, plant size, plant age and unionization status, on the likelihood of implementing 22 manufacturing practices that are key facets of lean production systems. Further, we postulate four “bundles” of inter‐related and internally consistent practices; these are just‐in‐time (JIT), total quality management (TQM), total preventive maintenance (TPM), and human resource management (HRM). We empirically validate our bundles and investigate their effects on operational performance. The study sample uses data from IndustryWeek’s Census of Manufacturers. The evidence provides strong support for the influence of plant size on lean implementation, whereas the influence of unionization and plant age is less pervasive than conventional wisdom suggests. The results also indicate that lean bundles contribute substantially to the operating performance of plants, and explain about 23% of the variation in operational performance after accounting for the effects of industry and contextual factors.
Every five to 10 years, a new manufacturing management program is introduced as the panacea for poor performance, although these programs have had mixed success. Many academics and practitioners believe that failures are due to the partial implementation of the programs and incompatible systems within the plant. Yet past research primarily considers manufacturing programs in isolation. In this article, the authors present a framework for integrating manufacturing programs, using the well-developed programs of total quality management (TQM), just-in-time (JIT), and total productive maintenance (TPM). These three programs are often considered components of the popular Lean manufacturing. The authors discuss the theoretical foundation for the positive impact of an integrated manufacturing program on manufacturing performance. They explore the theoretical relationships using structural equation modeling on a sample of 163 manufacturing plants.
The authors' analysis provides evidence of the need for integrating the manufacturing practices. In their framework, together the practices of TQM, JIT, and TPM exhibit a consistent positive effect on multiple dimensions of manufacturing performance. The findings demonstrate the importance of implementing manufacturing practices that belong to all three programs and of integrating new programs with existing practices.
The balanced scorecard, originally designed as a measurement system, has evolved into a comprehensive process to manage the execution of an organization’s strategy. The framework uses measures to translate the strategic objectives into targets and initiatives while the management system creates focus, alignment and leadership. It is estimated that 70 % of organizations use the balanced scorecard approach to management.
Most recently, companies have started adopting a lean manufacturing concept on a large scale to beat the global competition. Subsequently, a thorough investigation has started to understand the areas of lean manufacturing, which has been impacting on the operational performance and hence organisational performance parameters directly. Supplier development, supplier feedback, JIT supply from supplier, customer involvement, flow, SPC, TPM, setup reduction, employee involvement and customer participation, has been identified as key implementation areas, which impacts on operational performance parameters such as productivity, quality, cost, delivery, safety, morale and financial performance. A large scale study has been conducted in different Indian industries to verify the results.
In this paper, we examine the relationship among lean manufacturing management, competitive skills, and business performance from the perspective of managers of companies doing business in Brazil. We conduct a survey of 68 Brazilian companies that use lean manufacturing and analyze data using structural equation modeling based on partial least squares method. Results show, considering competitive skills as mediating variable, a positive relationship between lean manufacturing and business performance. Results also suggest that managers lack awareness about the importance of the competitive skills to enhance business performance. DOI: 10.12660/joscmv6n1p91-105 URL: http://dx.doi.org/10.12660/joscmv6n1p91-105
PurposeCompanies that adopt lean operations and lean accounting ultimately should achieve better profitability and cash flows than similarly situated companies that do not adopt lean operations and lean accounting.
MethodologyArchival data is analyzed through Wilcoxon signed-ranks, matched-pairs tests.
FindingsLean companies had greater returns on net operating assets (RNOA), returns on total assets (ROA), operating cash flows, and cash-adequacy ratios than Non-Lean companies. These results were driven by the larger Lean companies. The profit margins and financing-assets ratios also were marginally better for the Lean companies than the Non-Lean companies.
ImplicationsLean companies have achieved benefits proposed by the proponents of lean operations. The present study provides a starting point for further research on the financial performance of Lean companies using archival data.
Originality/valueThere is limited research on the financial performance of Lean companies that is based on archival data. The present study fills a void in the academic literature. This study measures RNOA, which does not confound operating and financing activities. Additionally, this study utilized a methodology that provides reasonable assurance of the identification of both Lean companies and Non-Lean companies from publicly available data.
Several streams of literature increasingly consider flexibility at all levels and functions of the manufacturing and supply chain. This paper reviews flexibility studies in operations management, supply chain management, and marketing. It considers the definitions, dimensions, drivers, sources, and performance outcomes of operational flexibility. In doing so, it offers a meta-analysis of 57 empirical studies that examines the magnitudes of the sources and performance outcomes of operational flexibility. It discusses not only research directions that arise from the review and meta-analysis, but also the managerial implications of a broader contingency model of operational flexibility.
The contemporary manufacturing environment is characterised by increased worker responsibility
coupled with the measurement and reporting of numerous aspects of performance. At shop-floor level
much of this performance measurement and reporting is non-financial. This paper reports on a large scale,
empirical investigation of the measurement practices in British factories at the beginning of the 21st
century. Descriptive statistics are provided as well as a classification model of shop-floor non-financial
measures. In addition, the relationships between operational measures and contingent firm-specific and
external variables are identified. Various partial relationships are found, and ‘across the board’ high
levels of shop-floor performance measurement are found to be associated with a severely competitive
environment, an upward communication corporate ethos, and with the adoption of JIT or TQM/TPM.
This paper examines whether firms exhibiting improved inventory utilization subsequent to JIT adoption achieve a corresponding increase in their Return on Assets (ROA) and whether firm-specific characteristics affect such ROA responses. On average, we do not find a significant ROA response to JIT adoption. Cross-sectionally, JIT adopting firms with a diffuse customer base have a superior ROA response relative to both adopting firms with a high degree of customer concentration and their matched control firms. Evidence is consistent with a superior ROA response for firms with lower inventory turns in the adoption year, particularly for work-in-process inventory. Data do not supportthe prediction that firms with lower committed costs will report a greater ROA response than firms with a higher proportion of committed costs.
Much of the empirical research in the past two decades has suggested that quality management (QM) is context dependent. This research develops an empirical QM model in a technology-based sector-electronics manufacturing. Based on quantitative and qualitative investigations of 225 electronics firms in Hong Kong and the Pearl River Delta (PRD) region of China, a path analytic model is developed. The empirical model shows that a typical quality management system (QMS) in the electronics industry is composed of four major modules, namely leadership, cultural elements, operational support systems, and process management. These modules create a series of chain effects on organizational performance, rather than acting as parallel elements with an equal impact. By quantifying their effects on organizational performance and comparing the model to others in the literature, we identify those QM constructs that are context dependent. In electronics manufacturing, process management and customer focus are more important than other elements (e.g., cultural factors) for garnering business results. This study contributes to contingency theory and research by identifying the key constructs and their relationships in a competitive, volatile, and technology-based industry with complex supply networks.
Manufacturing companies in Malaysia have never had it so tough. They are now confronting increasing prices of oil and raw materials, high advancement in innovation and technology, as well as high customer expectation on the quality of products and services. In addition, managers of these companies are well aware of the increasing competitive pressures in the world market. It is clear today that these pressures are due largely to the increased performance of those firms that have successfully implemented quality improvement. This paper presents the findings from an empirical study examining the relationship between quality management (QM) practices and profitability in the electronics and electrical industry in Malaysia. It is said that QM has the potential to not only enhance production efficiency and effectiveness, but also improves bottom-line results. Much has been written about the relationship between QM and performance. However, the link of QM practices to profitability in the electronics and electrical industry in Malaysia has not been fully addressed in empirical studies. To address this issue, this paper investigates the impact of QM practices on profitability in the Malaysian electronics and electrical industry using correlation, multiple regression, and hierarchical regression analyses. The findings revealed that quality measurement, supplier relations, and benchmarking in particular, appear to be of primary importance and exhibit significant impact on profitability. Findings of the study provided a striking demonstration of the importance of implementing effective QM practices for the electronics and electrical industry in Malaysia in enhancing its profitability. However, the study failed to provide the statistical evidence of the existence of the moderating effect of the length of QM adoption on the QM and profitability linkage.
Manufacturing firms operating in rapidly changing and highly competitive markets have embraced the continuous process improvement mindset. They have worked to improve quality, flexibility, and customer response time using the principles of Lean thinking. To reach its potential, lean must be adopted as a holistic business strategy, rather than an activity isolated in operations. The lean enterprise calls for the integration of lean practices across operations and other business functions. As a critical component for achieving financial control, management accounting practices (MAP) need to be adjusted to meet the demands and objectives of lean organizations. Our aim is to help both researchers and practitioners better understand how lean MAP can support operations personnel with their internal decision making, and operations executives and business leaders in their objective of increasing lean operations performance as part of a holistic lean enterprise strategy. We use survey data from 244 U.S. manufacturing firms to construct a structural equation model. We document that the extent of lean manufacturing implementation is associated with the use of lean MAP, and further that the lean MAP are related in a systematic way: simplified and strategically aligned MAP positively influences the use of value stream costing, which in turn positively influences the use of visual performance measures. We also find that the extent of lean manufacturing practices is directly related to operations performance. More importantly, lean manufacturing practices also indirectly affect operations performance through lean MAP. These findings are consistent with the notion that lean thinking is a holistic business strategy. In order to derive the greatest impact on performance, our results indicate that operations management cannot operate in a vacuum. Instead, operations and accounting personnel must partner with each other to ensure that lean MAP are strategically integrated into the lean culture. In sum, lean MAP provide essential financial control that integrates with and supports operations to achieve desired benefits.
The main purpose of this study is to examine whether the application of current information technology (IT) and different principles of lean manufacturing (LM) are interdependent and complimentary or they are mutually exclusive. This study draws on the so-called IT-enabled organisational capabilities perspective to study the relationships between IT, LM and business performance improvement. Using a questionnaire-based survey, the data come from 231 leading Iranian and Malaysian auto-part manufacturers. The findings suggest that LM and IT are mutually interdependent and value of IT investments can be effectively transformed into business performance improvement for auto-part manufacturers through the higher levels of lean manufacturing system (LMS) implementation. Advanced manufacturing technology (AMT) competency is a valuable intermediate capability which links IT investments into LMS implementation. It was found that IT investment is one of the minimum requirements of LMS implementation for surveyed business, and the value of IT investment is truly transformed to LMS implementation when IT investments offer competent administrative AMTs to effectively manage all production processes. Findings also recommend that managers should avoid isolating the performance metrics only on areas such as net financial measures, while assessing the business value of IT and LM.
This paper explores relationships between lean manufacturing practices, environmental management (e.g., environmental management practices and environmental performance) and business performance outcomes (e.g., market and financial performance). The hypothesized relationships of this model are tested with data collected from 309 international manufacturing firms (IMSS IV) by using AMOS. The findings suggest that prior lean manufacturing experiences are positively related to environmental management practices. Environmental management practices alone are negatively related to market and financial performance. However, improved environmental performance substantially reduces the negative impact of environmental management practices on market and financial performance. The paper provides empirical evidences with large sample size that environmental management practices become an important mediating variable to resolve the conflicts between lean manufacturing and environmental performance. Additional contextual analyses suggest that differences exist in terms of the strengths and statistical significance of some of the proposed relationships. Thus, for effective implementation of environmental management, firms need to measure environmental performance through which the impact of environmental management on other business performance outcomes is examined.
Purpose
The purpose of this study is to examine the relationship between quality management practices as well as their impact on organisational performance in the ASEAN regional context.
Design/methodology/approach
A sample of 115 data collected from automotive parts/components manufacturing companies in five ASEAN countries (Indonesia, Malaysia, Philippines, Thailand, and Vietnam) was used to test the proposed research hypotheses. A two‐step modelling approach was employed to model the data by using structural equation modelling (SEM).
Findings
Leadership of the organisations tend to focus on their external (customers and suppliers) rather than internal (employees) partners. The result of this study also suggests that tier 1 suppliers of the automotive industry in ASEAN considered quality information and supplier relationship instead of people management, as the drivers of process management.
Research limitations/implications
The study was limited to a single industry. The study did not consider some aspects culture in its investigation.
Practical implications
The results of this study clarify differences in how quality is managed in an emerging region when compared to previous studies in developed countries.
Originality/value
This study is the first attempt to explore quality management implementation in a specific sector in the ASEAN region.
Although research evaluating the impact of supply chain integration on performance has advanced substantially in the last decade, inconsistency and considerable variability of empirical findings leave unanswered questions for both research and practice. Using a meta-analysis, we examine empirical studies to clarify the actual relationship, suggest new directions, and ultimately contribute toward the development of supply chain management theory. We focus on “strategic” supply chain integration rather than on functional or operational/tactical studies, which would weaken the practical value of the analysis and findings. To ascertain focus and homogeneity of the sample, we adopt a rigorous search protocol and sample construction. We find that integration–performance relationships are complex and nuanced such that integration should not be universally viewed as improving performance. We identify relationships that are more generalizable and also those that need additional scrutiny. Finally, we discuss the implications of our findings and provide directions for future research.
The successful use of lean manufacturing (LM) practices requires more than the use of tools. Although manufacturing facilities worldwide use LM practices, dimensions of a nation’s culture may moderate LM’s effect on operating performance. Based on operational and organizational behavior literature, we develop moderation hypotheses based on the congruence between dimensions of national culture and LM practices. Data from more than 1,400 facilities in 24 countries show that LM is most effective in countries that value high uncertainty avoidance, low assertiveness, low future orientation, and low performance orientation. The results partially support our theory as to how LM effectiveness is sensitive to national cultural dimensions, and will help production managers adapt LM practices worldwide.
This study investigates the unique and complementary effects of manufacturing technologies and lean practices on operational performance of manufacturing firms. Despite the importance of understanding how various resources are interrelated within firms, there have been few studies focusing on this area. Using data collected from 186 manufacturing plants in Thailand, we found that both manufacturing technologies and lean practices have unique effects on a range of operational performance dimensions, including quality, lead-time, flexibility, and cost. More importantly, however, we also found that both organizational resources have complementary (or synergistic) effects on those operational performance dimensions. Based on the research findings, we offer theoretical and practical insights which support the importance of building strong manufacturing technologies and lean practices that maximise operational performance.
Operations management designs, schedules, and controls organizational processes to increase productivity by using methods such as Just-in-Time (JIT)/Lean Manufacturing, Total Quality Management (TQM) or Environmental Management Systems (EMS). Following implementation, managers generally want to determine the impact of such operational innovations on firm performance. Past studies analyzed financial ratios to prove the usefulness of the operational methods; however, findings are mixed. While some reported positive relationships between operational innovations and financial performance, others found no or inconsistent relationships. Motivated to uncover explanations for said inconsistencies, this paper takes a critical look at the appropriateness of the profitability ratios Return on Asset (ROA), Return on Equity (ROE) and Basic Earning Power (BEP) in determining the impact of a given operations strategy on firm performance. Focusing on JIT/Lean Manufacturing, the relationship between these ratios and inventory management ratios is analyzed. Fixed-effect regression shows that no consistent relationship between ROA, ROE, BEP and inventory management ratios exists. This result may be explained, as the profitability of a firm is affected by at least two factors: results from its operations, and how these are financed (e.g. usage of cheap debt, which enhances profitability). This paper suggests that the impact of an individual operations strategy is difficult to isolate from other firm activities, such as its financial management. Hence, profitability ratios such as ROA, ROE and BEP that aggregate all of a firm's activities may not be suitable metrics to determine the effect of JIT/Lean Manufacturing methods on financial firm performance.
The paper focuses upon an in depth investigation to decipher whether larger organisations embracing Lean as a philosophy were indeed more successful. Achievement was measured by the impact an organisation's Lean journey had on its financial and operational efficiency levels.An adapted balance scorecard was utilised which embraced strategic, operational and indices focused towards the organisation's future performance. The methodology principally analysed primary data meticulously captured from 68 survey questionnaires undertaken in manufacturing organisations in Britain representative of small, medium and large entities. Subsequently extensive case studies were undertaken in seven companies as a comprehensive validating exercise.The results revealed that the larger organisations viewing Lean as an ideology performed better; this was exposed by applying the balance scorecard to the respective Lean implementations. Evidently concoctions of inputs were deemed essential for this situation to exist. A research limitation would noticeably invoke a natural extension by replicating the investigation in a non-manufacturing environment. The creativity value of the research demonstrates that the results suggest that whilst considerable investment is required for organisations to be deemed to be embracing Lean as an ideology; nonetheless, this does result in the respective organisation benefiting from greater levels of efficiency.
Increasingly manufacturers implement lean practices to improve operational performance. In addition, manufacturers operate in ever more complex and volatile environments. This research investigates the effects of environmental complexity and dynamism on lean operations and lean purchasing practices. It empirically examines these relationships using archival and survey data from 126 manufacturers. The results show that environmental complexity positively moderates the effects of lean operations and lean purchasing on performance. However, environmental dynamism reduces the benefits of lean operations on performance, but enhances the benefits of lean purchasing on performance. Robustness tests further confirm the contingent effects of complexity and dynamism on lean operations and lean purchasing. This research offers a more nuanced understanding of the effect of external environmental context on lean practices, and suggests that practitioners should carefully consider the external environment when implementing different types of lean practices.
Rosenthan's (1979) concept of fail-safeN has thus far been applied to probability levels exclusively. This note introduces a fail-safeN for effect size.
Purpose – Ostensibly, less than 10 per cent of UK organisations accomplish successful lean implementations. A refined system to the one offered by the balanced scorecard is needed. The purpose of this paper is to propose a robust system that not only focuses on the intangible and intellectual assets but also embraces various time horizons and the interests of multiple stakeholders. Design/methodology/approach – The dynamic multi-dimensional performance (DMP) framework has been adapted which enables organisations to successfully gauge, in a holistic approach, whether lean has in fact proven successful in their respective organisations. Findings – The DMP framework embracing five dimension proves to be more robust than its predecessors and stresses the need to utilise a smaller set of multidimensional metrics which are closely aligned to an organisation's strategies. Research limitations/implications – Intangible assets have become the major source for competitive advantage. Tangible assets accounted for a book value of less than 20 per cent of companies' market values in 2000. Organisations need to promote a portfolio of measures directed at both the internal and external environments. Practical implications – Despite the popularity of the balanced scorecard, it has recently proven inadequate in certain circumstances. The proposal enables managers to bridge the gap between the real and aspired performance. Originality/value – The DMP model presented in this paper has generic appeal and can be applied to quite disparate organisations. It provides a good barometer for multiple time horizons and facilitates the examination of a wider view of organisational success.
A structural model incorporating agile manufacturing as the focal construct is theorized and tested. The model includes the primary components of JIT (JIT-purchasing and JIT-production) as antecedents and operational performance and firm performance as consequences to agile manufacturing. Using data collected from production and operations managers working for large U.S. manufacturers, the model is assessed following a structural equation modeling methodology. The results indicate that JIT-purchasing has a direct positive relationship with agile manufacturing while the positive relationship between JIT-production and agile manufacturing is mediated by JIT-purchasing. The results also indicate that agile manufacturing has a direct positive relationship with the operational performance of the firm, that the operational performance of the firm has a direct positive relationship with the marketing performance of the firm, and that the positive relationship between the operational performance of the firm and the financial performance of the firm is mediated by the marketing performance of the firm.