Impact of Lean Manufacturing Practices on Operational and Business Performance: Evidence from Sri Lankan Food Industry

Abstract

Lean is a strategy that aims to achieve smooth production flow by eliminating waste and hence helps manufacturing firms realize their time, cost, and quality goals. Food manufacturers not only have limited ability to offer uniform quality but also a greater chance of generating wastes due to the perishable nature of materials. This study investigates the degree to which the Sri Lankan food sector is practicing lean manufacturing and examines the direct and indirect relationships between lean manufacturing, business performance, and operational performance. Data were collected through a questionnaire distributed to managers who have lean experience in the food industry. Using a sample of 86, the hypotheses were tested applying Partial Least Square Structural Equation Modelling with SmartPLS software. Developing a new construct to represent four lean manufacturing practices, namely, Just-in-time (JIT), Total Quality Management (TQM), Total Preventive Maintenance (TPM), and Human Resource Management (HRM), this study empirically confirms that lean manufacturing has a significant positive impact on both operational and business performance. Furthermore, operational performance partially mediates the relationship between lean manufacturing and business performance. The findings offer valuable implications for mangers, particularly in the food industry to achieve sustainability through practicing lean in their manufacturing and supply chain operations.