Lean Systems Practice on Firm’s Performance
Keywords:
Lean system practices;Firms' performance, Competitive advantageAbstract
Lean system practice is important in the organization's competitive advantages and performance to compete and survive in the world of today. The purpose of this study is to understand the causal relationship between lean practices and firm performance, with competitive advantage proposed as playing the moderating role. A survey was carried out to identify the effects of six lean practices, namely process and equipment, manufacturing planning and control, human resource practices, product design, supplier relations and customer relationship on a firm’s performance, which comprise perception of financial and non-financial measures. The study comprises of 238 observations of Thai companies. The parameters are estimated by ordinary least squares (OLS). The results of this study suggest a negative relationship between lean practices and non-financial performance. Nevertheless, there appears to be a significant positive relationship between competitive advantage and the implementation of lean practices in firms. The scope of the study was limited to companies in Thailand and, therefore, its findings might not be generalizable to other national contexts.
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