Agile manufacturing and business performance

Abstract

Purpose The purpose of this paper is to examine the effect of agile manufacturing (AM) on business performance and operational performance (OP) dimensions in manufacturing companies in Jordan. It also explores the indirect effect of AM on business performance through OP dimensions of cost, quality, delivery and flexibility. Design/methodology/approach The study analyzes survey data collected from 282 manufacturing companies from different industries in Jordan. Validity and reliability analyses were performed using SPSS and Amos, and the research hypotheses were tested using structural equation modeling. Findings The results demonstrated that AM positively and directly affected business performance. It also positively affected OP dimensions of quality, delivery and flexibility. However, cost performance was not significantly affected by AM. In addition, quality performance and flexibility performance fully mediated the relationship between AM and business performance, whereas cost performance and delivery performance did not show mediating effects. Originality/value To the best of the knowledge, this is the first study that investigates the mediating effects of OP dimensions on the relationship between AM and business performance. In addition, a limited number of previous studies investigated the performance outcomes of AM. Furthermore, this area is under-investigated in the Middle East in general and in Jordan in particular.