Lean manufacturing and firms’ financial performance: the role of strategic supplier partnership and information sharing

Abstract

PurposeThe purpose of this paper is to examine the mediating role of strategic supplier partnership and moderating role of information sharing (IS), in the relationship between lean manufacturing and firms’ financial performance (FP).Design/methodology/approachUtilizing the contingency approach, this study develops a research model to validate the proposition that a proper integration of supply chain (SC) practices enhances the financial performance of the firm. The study uses data from one hundred and fifty-seven manufacturing firms. The results are generated on structural equation modeling (SEM) using AMOS software.FindingsThe study finds that strategic supplier partnership partially mediates the relationship between lean manufacturing and FP, whereas, empirically, it could not demonstrate that IS significantly moderates the relationship between lean manufacturing and FP.Practical implicationsThe paper theoretically develops logic for and empirically shows that strategic supplier partnership is an appropriate practice for mediating the impact of lean manufacturing on FP.Originality/valueThis strategic supply chain integration contributes to theory and demonstrates that SC practices’ correct synchronization and orchestration may realize superior FP. In addition, this research provides a sustainable strategic SC model that creates value and provides a competitive advantage for firms in the long term.