In this report we tried to explain the relationship between lean manufacturing practices environmental management practices and environmental performance, business performance outcomes (e.g., market and financial performance).
The hypothesized relationships of this model are tested with data collected from 309 international manufacturing firms (IMSSIV) by using AMOS.
There is an increasing social demand for environmental sustainability and organizations recognize that it has implications for its competitive positions and are striving to inculcate environmental friendly practices. So in this report we try to explain how lean manufacturing practices can achieve this and what impact it has on business performance.
Lean manufacturing is a collection of tactical methods that helps in eliminating non-value added activities (waste) for delivering quality products with least cost at a greater efficiency.
Lean implementation is rapidly expanding throughout manufacturing and service sectors as a core business strategy to develop a competitive advantage.
The focus of lean manufacturing is on driving rapid, continual improvement in cost, quality, service, and delivery, significant environmental benefits typically "ride the coattails" or occur incidentally as a result of these production-focused efforts.
Lean production techniques create a culture of employee empowerment, and waste minimization, continuous improvement, which is very compatible with organizational characteristics encouraged under environmental management systems (EMS) and pollution prevention (P2). Other related business strategies such as "Six Sigma" can have the same effect.
H1: Lean manufacturing will be positively associated with environmental management practices.
Lean manufacturing emphasis on elimination of waste from within the firm’s production systems through continuous improvement and process changes for reducing non-value added activities or elimination of wastes.
Lean orientation help firms to adopt environmental management practices which aim at reducing wastes and pollutants reduction.
H2: Environmental management practices will be positively associated with environmental performance.
Environmental management practices help an organization implement process and procedures which take into account environmental consideration across all functions.
Design for environment allows an organization to design eco-friendly products reducing their impact on the environment and improving environmental performance.
H3a: Lean manufacturing will be positively associated with market performance.
Lean manufacturing practices reduces setup times, achieves innovative problem solving in business processes , reduced work in process inventory, achieves customer satisfaction by increasing customer responsiveness ,reduces customer lead time enhancing the firm’s ability to improve customer value in terms of lower prices...