اثر تولید ناب بر عملکرد مالی: نقش واسطه در ناب بودن موجودی

The purpose of this paper is to empirically investigate the relationship between lean production implementation and financial performance. Particular emphasis is placed on the mediating role of inventory leanness in deriving the financial performance benefits commonly associated with lean production. Moreover, the interaction among different lean practice bundles in affecting financial and inventory performance is assessed. Based on an analysis of a combination of survey and secondary data, the effect of lean production on financial performance is found to be partially mediated by inventory leanness. In addition, there is strong evidence that the concurrent implementation of internally-focused and externally-focused lean practices yields greater performance benefits than selective lean production implementation. Thus, this study contributes to the theory of lean production by providing insights into the mediated and moderated effects of lean production on inventory leanness and financial performance.

Lean production is often regarded as the gold standard of modern operations and supply chain management (e.g., Guinipero et al., 2005 and Goldsby et al., 2006). Numerous studies have investigated the relationship between lean production and financial performance (e.g., Fullerton et al., 2003 and Jayaram et al., 2008). Yet, the exact mechanism(s) through which lean production affects financial performance remain underresearched. Conventional wisdom holds that, as a manufacturing strategy, lean production strives to minimize waste and thereby increase efficiency (Womack et al., 1990), and by extension, financial performance. Given the multiplicity of lean production practices such as kanban, JIT, and TQM, for example, it is apparent that the relationship between lean production and financial performance may be complex and multi-faceted. Indeed, one factor that is often implicitly considered as a mediator of this relationship is inventory efficiency. For example, several studies have examined the effects of lean production implementation on inventories (e.g., Huson and Nanda, 1995 and Balakrishnan et al., 1996). Likewise, analytical research has examined the linkage between production and inventory (e.g., Miyazaki, 1996 and Dobos, 2007). In a separate literature stream, prior research has investigated the performance implications of efficient inventory management (e.g., Capkun et al., 2009 and Eroglu and Hofer, 2011). Moreover, Fullerton and Wempe (2009) contend that the effects of lean production implementation on financial performance are mediated by various operational performance measures, such as delivery performance, manufacturing cycle times, and labor productivity. However, these authors do not consider inventories as a mediating factor. Yet, inventory costs are of great significance in the context of logistics and supply chain management (Stock and Broadus, 2006). Thus, the purpose of this study is to add to our understanding of lean production by examining the relationship between lean production and financial performance, with an emphasis on the mediating role of inventories. In addition, and consistent with the notion that lean production is a system of lean practices (Womack et al., 1990), interactions among various facets of lean production and their effects on inventories and performance are investigated. This research contributes to the existing literature in multiple ways: First, it provides a richer, more nuanced conceptualization of the relationships among lean production, inventory leanness, and financial performance. Specifically, we draw on existing lean production and inventory literature to develop a research model that examines the mediating role of inventory in delivering the commonly expected financial performance benefits of lean production implementation. This model is tested using a data sample with firm-level observations from a diverse set of US manufacturing industries which is compiled from two distinct sources: survey data and matched secondary financial data. Beyond conventional mediation analysis, we also test for potential reverse causality and, thus, gain a better understanding of the interplay of lean production, inventory leanness, and financial performance. Second, this study explores interactions among lean practices. Existing literature suggests that when lean practices are implemented concurrently, the total performance effect will exceed the sum of performance effects of individual lean practices (Shah and Ward, 2003). While some recent studies (e.g., Furlan et al., 2011a) have empirically tested the complementarity (synergy) among lean practice bundles, these analyses were restricted to specific aspects of lean production and focused on plant-level performance. In this study, we conceptualize lean production as two lean practice bundles (internal and external) that collectively encompass all lean practices, and we test the synergy between these lean practice bundles at the firm-level instead of at the plant level. In addition, this research addresses concerns of potential common methods bias (Podsakoff et al., 2003) that may arise when lean production and performance data are provided by the same survey respondent by using secondary inventory and financial performance metrics along with primary survey data on lean production implementation. Third, the two main constructs of this study, i.e., lean production and inventory leanness, are operationalized using measures proposed in recent research. More specifically, lean production is assessed using a survey instrument developed by Shah and Ward (2007) which consists of a set of 10 distinct lean practices: supplier feedback, supplier JIT, supplier development, customer involvement, pull manufacturing, continuous flow manufacturing, setup time reduction, statistical process control, employee involvement, and total productive maintenance. Inventory leanness, in turn, is measured using the Empirical Leanness Indicator (ELI) developed by Eroglu and Hofer (2011). The ELI measures a firm’s inventory leanness as the deviation of a firm’s inventory levels from size-adjusted within-industry average inventory levels. As such, the study extends operations management literature by providing independent empirical evidence for the validity of these instruments. The remainder of this paper is structured as follows: The relevant literature is reviewed and hypotheses are proposed in Section 2. Data and measurement issues are discussed in Section 3. In Section 4, mediation and interaction hypotheses are tested and empirical estimation results are presented. Section 5 presents a discussion of the findings, research and managerial implications, limitations, and future research opportunities.

Collectively, the analyses presented here draw a more complete picture of the lean production-inventory leanness-financial performance triangle. This research adds to the theory of lean production by highlighting and investigating the mediating role of inventory management efficiency in deriving the financial performance benefits that are commonly associated with lean production implementation. As such, this study underscores the importance of inventory management within the broader realm of operations management. 5.1. Main findings A major finding of this research is the mediating role of inventories in the relationship between lean practices and firm performance. Internal lean practices, in particular, have a positive effect on financial performance. This direct effect, however, decreases in magnitude by 25% when inventory leanness enters the regression equation, thus suggesting that inventory leanness partially mediates the link between internal lean practices and financial performance. This result is consistent with Fullerton and Wempe (2009) who presented evidence that non-financial performance measures partially mediate the lean production-financial performance relationship. This finding further implies that internal lean practices affect firm performance not only through improved inventory leanness, but also through other mechanisms. Most notably – and consistent with prior research – internal lean production practices may directly contribute to greater financial performance by lowering operating costs. In this vein, multiple studies have established that internal lean production practices such as TQM and TPM are associated with greater financial performance (e.g., Cua et al., 2001). In contrast to internal lean practices, the direct effect of external lean practices on financial performance is statistically insignificant. However, the post-hoc analysis reveals that external lean practice implementation is positively associated with inventory leanness which, in turn, is linked to financial performance. While prior research has found evidence that greater implementation of external lean practices (e.g., JIT adoption) is associated with greater financial performance (e.g., Inman and Mehra, 1993, Callen et al., 2000 and Fullerton et al., 2003) our results indicate that much of the performance enhancing effect of external lean production may be due to cost reductions that are derived from greater inventory leanness. A second major implication of this study is the identification of bidirectional and simultaneous effects among internal lean practices, external lean practices and inventory leanness. The empirical results indicate that a firm that implements internal lean practices is also likely to implement external lean practices. In other words, firms seem to view and implement lean production as a comprehensive system instead of a collection of loosely related practices that can be individually adopted. In addition, firms with greater levels of inventory leanness are more likely to adopt external lean practices. Likewise, we find evidence that greater external lean practice implementation is associated with greater inventory leanness. Moreover, we find evidence that lower levels of inventory leanness are associated with greater implementation of internal lean practices. This finding may indicate that firms recognizing their lack of inventory leanness implement internal lean practices in an effort to reduce inventories. Hence, this is a possible explanation for the negative estimate of the effect of internal lean practices on inventory leanness. Although this finding remains somewhat surprising, it shows that lean practices vary in their performance effects. A third major finding of this research is the positive interaction between internal and external lean practices. From its inception, lean production was designed as a system of distinct activities that collectively work to reduce waste and associated costs (Huang, 1991, Roth and Miller, 1992 and Imai, 1998). Our results support this notion. Specifically, we find that the concurrent implementation of external and internal lean practices carries greater performance benefits, both in terms of financial performance and inventory leanness, than the implementation of only one set of lean practices. 5.2. Limitations and future research opportunities As any research, this study has a number of limitations which may present interesting future research opportunities. First, the empirical analyses rely on a cross-sectional data set. The use of longitudinal data will allow researchers to capture learning effects in lean production. It is plausible that firms become more proficient in implementing lean practices over time, which may result in even better financial performance. Future research could address this issue by assessing the changes in the effects of lean practices over time. Second, the negative coefficient estimate for the effect of internal lean practices on inventory leanness remains an unresolved issue. Could this finding be a statistical artifact of the present data set or do internal lean practices really negatively impact inventory leanness? The replication of this study with a greater sample size may bring greater clarity to this issue. 5.3. Implications for research and practice This study has a number of implications for further research. First, our findings corroborate the conceptualization of lean production as a system of management practices that may have different operational and financial implications for a firm. The majority of existing research has focused on the study of JIT practices and has concluded that greater implementation of such practices results in lower inventories (e.g., Huson and Nanda, 1995 and Balakrishnan et al., 1996). However, there is limited research examining the relationship between non-JIT lean production practices and inventory leanness. Yet, there is theoretical and anecdotal evidence that lean production may, in at least some instances, even lead to increases in inventory holdings and associated costs (Wu, 2002). Moreover, prior research has found that different lean practices differentially impact non-financial performance measures (Fullerton and Wempe, 2009). Empirical research, therefore, must allow for such differential effects. In addition, as lean production facets are part of a system of potentially co-dependent practices, the individual effects cannot be clearly discerned without controlling for potential interactions. Second, this study underscores the importance of investigating lean production within the operational context of a firm. As the results of this study show, inventory leanness mediates, and thereby, drives the effect of lean production implementation on financial performance. As inventory leanness varies significantly across industries and firms (Eroglu and Hofer, 2011), it is evident that the financial effects of lean production implementation may vary accordingly. An interesting implication of this research for managers relates to the positive interaction effect of internal and external lean practices. In other words, the implementation of a particular lean practice will not only have a direct performance benefit, but it can also improve the contribution of other existing lean practices in a firm. Given the synergistic interaction among various lean practices, managers should look at the system-wide effects of practices that are adopted in their operations. Also, interactions between various practices should be assessed to determine the total performance effect of a given lean practice. Moreover, our research highlights the importance of considering operational performance outcomes, such as inventory leanness, as a precursor to enhanced financial performance.