Lean manufacturing and business performance: testing the S-curve theory

Abstract

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.

Keywords:

• Lean manufacturing
• firm performance
• operations management
• emerging economies
• non-linear relationships

Acknowledgment

We thank Stephen J. Childe (editor), three exceptional reviewers for their helpful comments and suggestions on prior versions of this manuscript.

Informed consent

Informed consent was obtained from all individual participants included in the study.

Disclosure statement

The authors declare that they have no conflict of interest.

Additional information

Notes on contributors

Léony Luis Lopes Negrão

Léony Luis Lopes Negrão is a professor in the Department of Production Engineering, State University of Pará (Brazil). Graduate from the State University of Pará, is MS from the Federal University of Pará, and PhD from the Federal University of São Carlos (Brazil). Has experience in Production Engineering, focusing on planning, project and control of systems of production, acting on the following subjects: production planning and control, lean manufacturing, cost management and project evaluation.

Ana Beatriz Lopes de Sousa Jabbour

Ana Beatriz Lopes de Sousa Jabbour is an Associate Professor at Montpellier Business School (AACSB, AMBA, EFMB, Financial Times), France. She worked as senior lecturer within the University of Strathclyde, Scotland, UK. Prior to joining the University of Strathclyde, she worked for UNESP-Sao Paulo State University, Brazil. Her research has a global impact according to her H-index (Scopus and Web of Science). She has led special issues in top-tier journals (e.g. Production, Planning & Control and Journal of Cleaner Production). Her research interests are circular economy, and Industry 4.0 technology for green growth strategies.

Hengky Latan

Hengky Latan is a senior researcher in accounting field. He worked at the STIE Bank BPD Jateng in department of accounting and HLC consulting firm. He has authored over 15 books including multivariate statistics using IBM SPSS, Stata and structural equation modeling using AMOS, LISREL, Mplus, SmartPLS, WarpPLS, XLSTAT, GeSCA and so on. He also the editor-in-chief for the edited book on PLS path modeling (PLS-PM) published by Springer International (Cham). His research addresses the organizational behavior, business ethics, sustainability and the environment, innovation and quantitative analysis such as structural equation modeling including PLS-PM. His research in these fields has been published in well-known journals such as Journal of Business Ethics, Ecological Economics, International Journal of Production Economics, Industrial Marketing Management, International Journal of Production Research, Journal of Environmental Management, Technovation, among others.

Moacir Godinho Filho

Moacir Godinho Filho is a professor in the Department of Industrial Engineering, Federal University of São Carlos (Brazil). He received his BS from the Federal University of São Carlos, his MBA from Fundação Getúlio Vargas (Brazil), MS, and his PhD from the Federal University of São Carlos. Professor Godinho Filho was a visiting scholar in the Department of Industrial and Systems Engineering, University of Wisconsin at Madison (USA) and also in the Edward P. Fitts Department of Industrial and Systems Engineering, North Carolina State University (USA). Professor Godinho Filho has published approximately 60 papers in journals with a selective review process. His areas of interest are: production planning and control, lean manufacturing, lead time reduction, logistics, and supply chain management.

Charbel José Chiappetta Jabbour

Charbel José Chiappetta Jabbour is an associate Editor, Journal of Cleaner Production. Full Professor, Montpellier Business School, France (AACSB, AMBA, EFMB, Financial Times). He worked for Univ of Stirling (Co-Director of the Stirling's MSc in Strategic Sustainable Business, UK), UNESP- Sao Paulo State Uni (Director of PhD and MSc Programes, Brazil), USP-Uni of Sao Paulo (Brazil). Visiting researcher at United Nations Uni (Japan) and Uni of London (UK). Research: circular economy, sustainable production, human aspects of sustainable management. Associate Editor of Sustainable Production & Consumption (Elsevier). Principal Investigator: 15 Brazilian research grants. Experience in supervising PhDs and post-docs.

Gilberto Miller Devós Ganga

Gilberto Miller Devós Ganga is a Professor in the Department of Industrial Engineering, Federal University of São Carlos (Brazil). He received his MS and PhD from the University of São Paulo. Professor Ganga has published several papers in journals with a selective review process. His areas of interest are: operations management, logistics and supply chain management.