Structural equation modeling of lean manufacturing practices in a developing country context

Abstract

PurposeThe purpose of this paper is to empirically examine lean manufacturing (LM) practices and to quantify their impact on business performance (BP), with particular emphasis on the mediating role of operational performance (OP) in deriving the BP benefits commonly linked with LM. It also seeks to identify those lean practices most appropriate for application.Design/methodology/approachEmpirical data on LM practices were collected using a structured survey questionnaire. The sampling frame was Jordanian companies registered and listed by the Amman Chamber of Commerce. In total, 500 questionnaires were distributed among 300 companies and a total of 249 completed questionnaires were eligible for statistical processing, a response rate of 49.8 percent. Invalid questionnaires were eliminated, leaving 228 usable. The theoretical relations were tested by structural equation modeling.FindingsAlthough the results of the statistical analysis indicate a positive and significant impact of implementing LM practices on both OP and BP, they also show that the various LM practices did not receive equal recognition among the organizations surveyed. The most commonly adopted lean principles were found to be total preventive maintenance, statistical process control and housekeeping 5S.Research limitations/implicationsOther lean practices have not been considered as a dimension in this study. However, it opens new avenues of investigation relevant to lean practices.Practical implicationsThe most significant implication of the study is that managers in manufacturing firms should place more emphasis on LM practices when developing strategies for leveraging performance. The study shows that the LM approach contributes to BP when LM practices are simultaneously implemented.Originality/valueThe originality of this study lies in the new context in which it was conducted. The study adds value by investigating the implementation of LM practices which have been transferred from developed to developing countries and by empirically examining their impact on key performance indicators within the Jordanian manufacturing sector.