Determining the effects of lean production and servitization of manufacturing on sustainable performance

Abstract

Abstract This paper draws on complementarity theory to empirically study the independent and complementary effects of lean bundles (just-in-time, total quality management, and human resource management practices) and servitization of manufacturing on sustainable performance. The evidence gathered from 178 Chinese manufacturers suggests that the servitization of manufacturing comprises three complementary sub-dimensions (internal organizational practices, external collaboration practices and process-oriented practices). Further, when we model the three lean bundles and servitization simultaneously to test their direct effects on sustainable performance, the results suggest that the effects of individual practices on sustainable performance are not always positive. By comparison, the complementarity of servitization and the three lean bundles significantly enhance sustainable performance. Taken together, this study informs that the impact of lean bundles and servitization on sustainable performance is much more complicated than previously thought, and highlights the value of complementarity thinking in addressing corporate sustainability. Manufacturing firms should focus on adopting both servitization and lean production.