Impact of implementing lean practices on firm performance: a study of Northern India SMEs

Abstract

Purpose The purpose of this paper is to investigate the impingement of lean manufacturing practices (LMPs) in small and medium enterprises (SMEs) of Northern India and their relationship with firm performance. This paper makes an attempt to identify the lean practices, which are more beneficial and their impact on firm performance. Design/methodology/approach In this study, a qualitative survey of 183 Northern India SMEs is collected and analysed using correlation, regression, canonical analysis and ANOVA test are conducted for developing relationships between them. Findings The outcome of this study indicates that the embracement of lean is necessary for their survival in this competitive spirit. Lean practices helped the SMEs to cope up with the persistent stress given by the spirited market. From the data investigation, it is revealed that total productive maintenance, supplier management, just-in-time and five S practices enhance the firm performance. Other practices such as plant management practices, operational and people practices found in a lesser extent than previous ones. From the correlation, it is revealed that lean practices have a strong relationship with firm performance. In one-way ANOVA test results indicating that the number of firms, which are less in the initial stage of lean implementation and much more impressive in a transition stage. Research limitations/implications The chosen approach for this research study was the cross-sectional one limited to the northern region of India and the investigated variables. Practical implications This study will help the stakeholders and manufacturers to enhance the performance of firms using LMPs, especially in a developing country. From these findings, practitioners and academicians would focus on vital issues related to firm enhancement apart from operational measures. Originality/value This study is one of the first attempts in which relation is developed between LMPs and firm performance and further data are investigated using canonical cross loadings and ANOVA analysis.

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