Lean manufacturing practices in Indonesian manufacturing firms: Are there business performance effects?

Purpose Contradictory findings regarding the implication of Lean manufacturing (LM) implementation to business performance (BP) have been observed in prior studies. Hence, more studies are required to be capable of finding the status of LM implementation and its impacts on BP. Accordingly, this study examines and scrutinizes the effects of LM practices on the enhancement of BP from a developing country standpoint. Design/methodology/approach This empirical study uses a survey-based quantitative data collection approach through a cross-sectional research design. A total of 139 large manufacturing companies in Indonesia participated, selected through stratified random sampling technique. Three hypotheses regarding the effect of LM on BP were examined. Findings The results empirically reveal that comprehensive implementation of LM practices is necessary. Also, this study unravels that high BP (in terms of profitability, sales and customer satisfaction) is dependent upon the comprehensive implementation of LM practices. In other words, LM practices are not recommended to be implemented as a subset. Research limitations/implications Although this study is free from the common method bias as an implication of self-reporting by single respondent from one company, future researchers should consider of collecting data from multiple individuals in one company. Additionally, due to the study conducted in limited industries and large manufacturing firms, the results may not be applicable in other industries as well as in small and medium enterprises. Practical implications This study has further confirmed and established the LM–BP relationship. In line with the complementarity theory, it provides an insight that all the LM practices should be implemented simultaneously in a holistic manner because they are mutually supportive. In such a situation, piecemeal adoption is highly not recommended. Originality/value This study emphasizes on how LM contributes to the superior BP. Meanwhile, little attention has been paid to investigate the LM and its implication on BP from a developing country standpoint. Thus, this study is initiated to fill the gap.

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