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IMPACT OF LEAN MANUFACTURING ON THE OPERATIONAL PERFORMANCE: EVIDENCE FROM TEXTILE INDUSTRY
Corresponding Author(s) : Nisar Ahmad
Humanities & Social Sciences Reviews,
Vol. 9 No. 3 (2021): May
Abstract
Purpose of the study: Lean manufacturing is perceived to be a significant competitive advantage of firms as it removes waste from manufacturing operations with innovations in products and processes. This research aims to know the impact of lean manufacturing practices of textile firms on their operational efficiency.
Methodology: For this study, questionnaires were electronically sent to operation/ production managers of 122 textile firms using lean manufacturing technologies in Pakistan. Based on the literature review, nine lean manufacturing practices and five operational performance measures were included in the questionnaire survey. Just 91 operation managers replied, a response rate of 74%. Multiple regression analysis was performed to test the hypotheses of the study.
Main findings: The results of regression analysis show that lean manufacturing practices significantly impact the operational performance of textile firms. The study's findings suggest that the involvement of customers, suppliers, and employees causes an increase in the operating performance of firms. Moreover, it is established that some lean manufacturing practices such as 5S, automation (Jidoka), Justin time (JIT), equipment layout, and continuous improvement (Kaizen) have a significant and positive effect on the operational performance of firms.
Application of the study: The lean manufacturing practices save money for businesses and increases overall productivity by reducing waste. These are also helpful in increasing consumer loyalty and employee productivity. The study's results show that lean production methods can be adopted to improve operating performance and competitiveness.
Originality/ Novelty: This study adds a piece of first-hand evidence by establishing a significant effect of lean manufacturing practices of firms on their operational performance in Pakistan, where most of the firms so far are using traditional techniques due to lack of financial resources.
Keywords
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- Abdel-Maksoud, A., Dugdale, D., & Luther, R. (2005). Non-financial performance measurement in manufacturing companies. The British Accounting Review, 37(3), 261-297. https://doi.org/10.1016/j. bar.2005.03.003 DOI: https://doi.org/10.1016/j.bar.2005.03.003
- Ahmad, N., & Afza, T. (2018). Determinants of trade credit financing: Case of manufacturing firms listed in Pakistan. Pakistan Business Review, 20(1), 110-121. DOI: http://dx.doi.org/10.22555/pbr.v20i1.1295
- Ahmad, S., & Schroeder, R. G. (2003). The impact of human resource management practices on operational performance: recognizing country and industry differences. Journal of Operations Management, 21(1), 19-43. https://doi.org/10.1016/S0272-6963(02)00056-6 DOI: https://doi.org/10.1016/S0272-6963(02)00056-6
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- Arya, A. K., & Choudhary, S. (2015). Assessing the Application of Kaizen principles in Indian small-scale industry. International Journal of Lean Six Sigma. 6(4). 369-396. DOI:10.1108/IJLSS-11-2014-0033. DOI: https://doi.org/10.1108/IJLSS-11-2014-0033
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- Bento, G. D. S., Schuldt, K. S., & Carvalho, L. C. D. (2020). The influence of supplier integration and lean practices adoption on operational performance. Gestão & Produção, 27(1), 1-15. https://doi.org/10.1590/0104-530x3339-20 DOI: https://doi.org/10.1590/0104-530x3339-20
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- Bhutta, M. K. S., Egilmez, G., Chatha, K.A., & Huq, F. (2017). Survey of lean management practices in Pakistani industrial sectors. International Journal of Services and Operations Management, 28(3), 309-334. http://doi.org/10.1504/IJSOM.2017.087287 DOI: https://doi.org/10.1504/IJSOM.2017.087287
- Bluman, A. G. (2009). Elementary statistics: A step-by-step approach. New York, NY: McGraw-Hill Higher Education.
- Carvalho, C. P., Gonçalves, L. W. N., & Silva, M. B. (2019). Future stream mapping. International Journal of Production Management and Engineering,7(1), 1-62. https://doi.org/10.4995/ijpme.2019.8607
- Carvalho, C.P., Gonçalves, L.W.N. and Silva, M.B. (2019). Value stream mapping as a lean manufacturing tool: A new account approach for cost saving in a textile company. International Journal of Production Management and Engineering, 6(2), 1-12. https://doi.org/10.4995/ijpme.2019.8607 DOI: https://doi.org/10.4995/ijpme.2019.8607
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- De Toni, A., & Nassimbeni, G. (2000). Just-in-time purchasing: an empirical study of operational practices, supplier development and performance. Omega, 28(6), 631-651. https://doi.org/10.1016/S0305-0483(00)00016-5 DOI: https://doi.org/10.1016/S0305-0483(00)00016-5
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References
Abdel-Maksoud, A., Dugdale, D., & Luther, R. (2005). Non-financial performance measurement in manufacturing companies. The British Accounting Review, 37(3), 261-297. https://doi.org/10.1016/j. bar.2005.03.003 DOI: https://doi.org/10.1016/j.bar.2005.03.003
Ahmad, N., & Afza, T. (2018). Determinants of trade credit financing: Case of manufacturing firms listed in Pakistan. Pakistan Business Review, 20(1), 110-121. DOI: http://dx.doi.org/10.22555/pbr.v20i1.1295
Ahmad, S., & Schroeder, R. G. (2003). The impact of human resource management practices on operational performance: recognizing country and industry differences. Journal of Operations Management, 21(1), 19-43. https://doi.org/10.1016/S0272-6963(02)00056-6 DOI: https://doi.org/10.1016/S0272-6963(02)00056-6
Alsmadi, M., Almani, A., & Jerisat, R. (2012). A comparative analysis of lean practices and performance in the UK manufacturing and service sector firms. Total Quality Management & Business Excellence, 23(3-4), 381-396. https://doi.org/10.1080/14783363.2012.669993. DOI: https://doi.org/10.1080/14783363.2012.669993
Arya, A. K., & Choudhary, S. (2015). Assessing the Application of Kaizen principles in Indian small-scale industry. International Journal of Lean Six Sigma. 6(4). 369-396. DOI:10.1108/IJLSS-11-2014-0033. DOI: https://doi.org/10.1108/IJLSS-11-2014-0033
Belekoukias, I., Garza-Reyes, J. A., & Kumar, V. (2014). The impact of lean methods and tools on the operational performance of manufacturing organizations. International Journal of Production Research, 52(18), 5346-5366. https://doi.org/10.1080/00207543.2014.903348 DOI: https://doi.org/10.1080/00207543.2014.903348
Bento, G. D. S., Schuldt, K. S., & Carvalho, L. C. D. (2020). The influence of supplier integration and lean practices adoption on operational performance. Gestão & Produção, 27(1), 1-15. https://doi.org/10.1590/0104-530x3339-20 DOI: https://doi.org/10.1590/0104-530x3339-20
Bhamu, J., & Sangwan, K. (2014). Lean manufacturing: Literature review and research issues. International Journal of Operations & Production Management, 34, 876-940. https://doi.org/10.1108/IJOPM-08-2012-0315 DOI: https://doi.org/10.1108/IJOPM-08-2012-0315
Bhutta, M. K. S., Egilmez, G., Chatha, K.A., & Huq, F. (2017). Survey of lean management practices in Pakistani industrial sectors. International Journal of Services and Operations Management, 28(3), 309-334. http://doi.org/10.1504/IJSOM.2017.087287 DOI: https://doi.org/10.1504/IJSOM.2017.087287
Bluman, A. G. (2009). Elementary statistics: A step-by-step approach. New York, NY: McGraw-Hill Higher Education.
Carvalho, C. P., Gonçalves, L. W. N., & Silva, M. B. (2019). Future stream mapping. International Journal of Production Management and Engineering,7(1), 1-62. https://doi.org/10.4995/ijpme.2019.8607
Carvalho, C.P., Gonçalves, L.W.N. and Silva, M.B. (2019). Value stream mapping as a lean manufacturing tool: A new account approach for cost saving in a textile company. International Journal of Production Management and Engineering, 6(2), 1-12. https://doi.org/10.4995/ijpme.2019.8607 DOI: https://doi.org/10.4995/ijpme.2019.8607
Danese, P., Romano, P. and Bortolotti, T. (2012). JIT production, JIT supply and performance: Investigating the moderating effects. Industrial Management & Data Systems, 112(3), 441-465. https://doi.org/10.1108/0263 5571211210068 DOI: https://doi.org/10.1108/02635571211210068
Dong, Y., Carter, C. R., & Dresner, M. E. (2001). JIT purchasing and performance: an exploratory analysis of buyer and supplier perspectives. Journal of Operations Management, 19(4), 471-483. https://doi.org/10.10 16/S0272-6963(00)00066-8 DOI: https://doi.org/10.1016/S0272-6963(00)00066-8
De Toni, A., & Nassimbeni, G. (2000). Just-in-time purchasing: an empirical study of operational practices, supplier development and performance. Omega, 28(6), 631-651. https://doi.org/10.1016/S0305-0483(00)00016-5 DOI: https://doi.org/10.1016/S0305-0483(00)00016-5
Economic Adviser's Wing, Finance Division, Government of Pakistan, Islamabad (2020). Pakistan Economic Survey 2019-20. http://www.finance.gov.pk/survey/chapter_20/PES_2019_20.pdf
Endsley, S., Magill, M. K., & Godfrey, M. (2006). Creating a lean practice. Family Practice Management, 13(4), 34-38.
Fullerton, R. R., & Wempe, W. F. (2009). Lean manufacturing, non-financial performance measures, and financial performance. International Journal of Operations & Production Management, 29(3), 214-240. DOI: https://doi.org/10.1108/01443570910938970
Fullerton, R. R., McWatters, C. S., & Fawson, C. (2003). An examination of the relationships between JIT and financial performance. Journal of Operations Management, 21(4), 383-404. https://doi.org/10.1016/S0272-6963(03)00002-0 DOI: https://doi.org/10.1016/S0272-6963(03)00002-0
Ghosh, M. (2013). Lean manufacturing performance in Indian manufacturing plants. Journal of Manufacturing Technology Management, 24(1), 113-122. https://doi.org/10.1108/17410381311287517 DOI: https://doi.org/10.1108/17410381311287517
Gupta, S., & Jain, S. K. (2013). A literature review of lean manufacturing. International Journal of Management Science and Engineering Management, 8(4), 241-249. DOI: https://doi.org/10.1080/17509653.2013.825074
Hallgren, M., & Olhager, J. (2009). Lean and agile manufacturing: external and internal drivers and performance outcomes. International Journal of Operations & Production Management, 29(10), 976-999. https://doi.org/10.1108/01443570910993456 DOI: https://doi.org/10.1108/01443570910993456
Hamja, A., Maalouf, M., & Hasle, P. (2019). The effect of lean on occupational health and safety and productivity in the garment industry – a literature review. Production & Manufacturing Research, 7(1), 316-334. DOI: https://doi.org/10.1080/21693277.2019.1620652
Hashim M., Baig S.A., Amjad F., Nazam M., Akram M.U. (2019, August). Impact of supply chain management practices on organizational performance and the moderating role of innovation culture: A case of Pakistan textile industry. In International Conference on Management Science and Engineering Management (pp. 390-401). Springer, Cham. DOI: https://doi.org/10.1007/978-3-030-21255-1_30
Hopp, W. J., & Spearman, M. L. (2004). To pull or not to pull: What is the question?. Manufacturing & Service Operations Management, 6(2), 133-148. https://doi.org/10.1287/msom.1030.0028 DOI: https://doi.org/10.1287/msom.1030.0028
Inman, R. A., & Green, K. W. (2018). Lean and green combine to impact environmental and operational performance. International Journal of Production Research, 56(14), 4802-4818, DOI: https://doi.org/10.1080/00207543.2018.1447705
Israel, G. D. (1992). Determining sample size (Fact sheet PEOD-6). Gainesville, FL: University of Florida.
Jasti, N. V. K., & Kodali, R. (2014). Lean production: Literature review and trends. International Journal of Production Research, 53(3), 867-885. DOI: https://doi.org/10.1080/00207543.2014.937508
Jasti, N. V. K., & Kodali, R. (2015). A critical review of lean supply chain management frameworks: a proposed framework. Production Planning & Control, 26(13), 1051-1068. https://doi.org/10.1080/09537 287.2015.1004563 DOI: https://doi.org/10.1080/09537287.2015.1004563
Kaur, P., Marriya, K., & Kashyap, R. (2016). Assessment of lean initiatives: An investigation in the Indian Apparel Export Industry. Prabandhan: Indian Journal of Management, 9(9), 52-66. DOI: https://doi.org/10.17010/pijom/2016/v9i9/101509
Khanchanapong, T., Prajogo, D., Sohal, A. S., Cooper, B. K., Yeung, A. C., & Cheng, T. C. E. (2014). The unique and complementary effects of manufacturing technologies and lean practices on manufacturing operational performance. Int. J. Production Economics, 153, 191–203. https://doi.org/10.1016/j .ijpe.2014.02.021 DOI: https://doi.org/10.1016/j.ijpe.2014.02.021
Van-Landeghem, H. (2014). A management system for sustainable lean implementation. In Handbook of research on design and management of lean production systems (pp. 173-187). IGI Global. DOI: https://doi.org/10.4018/978-1-4666-5039-8.ch009
Li, S., Rao, S. S, Ragu-Nathan, T.S., & Ragu-Nathan, B. (2005). Development and validation of a measurement instrument for studying supply chain management practices. Journal of Operations Management, 23(6), 618-641. https://doi.org/10.1016/j.jom.2005.01.002 DOI: https://doi.org/10.1016/j.jom.2005.01.002
Martz, W. (2013). Evaluating organizational performance rational, natural, and open system models. American Journal of Evaluation 34(3). 385-401. DOI: https://doi.org/10.1177/1098214013479151
Marudhamuthu, R., Krishnaswamy, M., & Pillai, D. M. (2011). The development and implementation of lean manufacturing techniques in the Indian garment industry. Jordan Journal of Mechanical & Industrial Engineering, (5)6, 527-532.
Moreira, A. C., & Silva Pais, G. C. (2011). Single minute exchange of die. A case study implementation. Journal of Technology Management &Amp; Innovation, 6(1), 129–146. https://doi.org/10.4067/S0718-27242011000100011 DOI: https://doi.org/10.4067/S0718-27242011000100011
Nawanir, G., Lim, K. T., & Othman, S.N. (2013). Impact of lean practices on operations performance and business performance: Some evidence from Indonesian manufacturing companies. Journal of Manufacturing Technology Management, 24(7), 1019-1050. DOI: https://doi.org/10.1108/JMTM-03-2012-0027
Negrao, L. L. L., Godinho Filho, M., & Marodin, G. (2017). Lean practices and their effect on performance: a literature review. Production Planning & Control, 28(1),33-56. DOI: https://doi.org/10.1080/09537287.2016.1231853
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