Lean manufacturing: Context, practice bundles, and performance

Rachna Shah, Peter T. Ward

Research output: Contribution to journalArticlepeer-review

1680 Scopus citations

Abstract

Management literature has suggested that contextual factors may present strong inertial forces within organizations that inhibit implementations that appear technically rational [R.R. Nelson, S.G. Winter, An Evolutionary Theory of Economic Change, Harvard University Press, Cambridge, MA, 1982]. This paper examines the effects of three contextual factors, plant size, plant age and unionization status, on the likelihood of implementing 22 manufacturing practices that are key facets of lean production systems. Further, we postulate four "bundles" of inter-related and internally consistent practices; these are just-in-time (JIT), total quality management (TQM), total preventive maintenance (TPM), and human resource management (HRM). We empirically validate our bundles and investigate their effects on operational performance. The study sample uses data from IndustryWeek's Census of Manufacturers. The evidence provides strong support for the influence of plant size on lean implementation, whereas the influence of unionization and plant age is less pervasive than conventional wisdom suggests. The results also indicate that lean bundles contribute substantially to the operating performance of plants, and explain about 23% of the variation in operational performance after accounting for the effects of industry and contextual factors.

Original languageEnglish (US)
Pages (from-to)129-149
Number of pages21
JournalJournal of Operations Management
Volume21
Issue number2
DOIs
StatePublished - Mar 2003

Bibliographical note

Funding Information:
The authors would like to thank three anonymous reviewers for thoughtful, constructive suggestions that greatly improved this paper. We also thank the Center for Excellence in Manufacturing Management (CEMM) and Fisher College of Business, both at Ohio State University, for financial support. We are grateful to Penton Media, publishers of IndustryWeek , for allowing access to their data.

Keywords

  • Contextual factors
  • Lean bundles
  • Lean manufacturing practices
  • Operational performance

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