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Impact of lean strategy on operational performance: a study of Thai manufacturing companies

Shams Rahman (School of Business IT and Logistics, College of Business, RMIT University, Melbourne, Australia)
Tritos Laosirihongthong (Industrial Engineering Department, Faculty of Engineering, Thammasat University, Pathumtanee, Thailand)
Amrik S. Sohal (Department of Management, Monash University, Melbourne, Australia)

Journal of Manufacturing Technology Management

ISSN: 1741-038X

Article publication date: 12 September 2010

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Abstract

Purpose

The purpose of this paper is to examine the extent to which lean management practices are adopted by manufacturing organizations in Thailand and their impact on firms' operational performance.

Design/methodology/approach

Using a survey questionnaire, data were collected against 13 lean practices from 187 middle and senior managers belonging to 187 Thai manufacturing firms. Using factor analysis these lean practices were then clustered into three higher level constructs namely just in time (JIT), waste minimization and flow management. The responding firms were categorized into small and medium enterprises (SMEs) and large enterprises (LEs) based on size and Thai‐owned, foreign‐owned and joint venture firms based on ownership. The multiple regression models were employed to investigate the effects of three lean constructs on operational performance in different categories of firms. The operational performance is measured by four parameters such as quick delivery compared to competitors, unit cost of products relative to competitors, overall productivity and customer satisfaction.

Findings

The results indicate that all three lean constructs are significantly related to operational performance. JIT has a higher level of significance in LEs compared with SMEs, whereas for waste minimization there is a higher level of significance for SMEs compared with LEs. Flow management has a much lower level of significance for both SMEs and LEs. With respect to ownership, JIT is highly significant to operational performance for all three ownership groups (Thai, foreign and joint venture). Foreign‐owned companies show a higher level of significance on operational performance for both waste management and flow management than Thai and joint venture companies.

Originality/value

The paper provides insights into the adoption of lean practices in an Asian context and using survey data as opposed to case studies, and provides further evidence that lean practices are significant in enhancing operational performance.

Keywords

Citation

Rahman, S., Laosirihongthong, T. and Sohal, A.S. (2010), "Impact of lean strategy on operational performance: a study of Thai manufacturing companies", Journal of Manufacturing Technology Management, Vol. 21 No. 7, pp. 839-852. https://doi.org/10.1108/17410381011077946

Publisher

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Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited