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Impact of lean
Impact of lean manufacturing: manufacturing
evidence from apparel industry
in Bangladesh
Abul Bashar 923
School of Business and Entrepreneurship, Independent University, Bangladesh,
Dhaka, Bangladesh Received 17 January 2020
Revised 23 April 2020
10 November 2020
Ahsan Akhtar Hasin Accepted 4 January 2021
Department of Industrial and Production Engineering,
Bangladesh University of Engineering and Technology, Dhaka, Bangladesh, and
Ziaul Haq Adnan
School of Business and Entrepreneurship, Independent University, Bangladesh,
Dhaka, Bangladesh

Abstract
Purpose – Many research findings demonstrate the benefits of lean manufacturing implementation.
However, the impact of lean manufacturing on organizational performance in developing countries like
Bangladesh remains unexplored. The purpose of this paper is to investigate the impact of lean manufacturing
system (LMS) on the organizational performance of the apparel industry in Bangladesh.
Design/methodology/approach – Empirical data were collected from 227 apparel manufacturing firms
using a close-ended structured questionnaire. The causal relationships between the independent and
dependent variables are examined by structural equation modeling using AMOS 20.0 software.
Findings – The results reveal significant evidence that the implementation of LMS has a direct impact on
organizational performance in terms of operational and business performance.
Practical implications – The findings of this study will create a substantial interest among the
practitioners of the apparel industry to implement LMS. This study will also explore the opportunities to
develop lean implementation framework and identify the benefits that will enhance the competitive
advantages.
Originality/value – This paper explores the causal relationships and argues based on the empirical data
in the context of the apparel industry in Bangladesh.
Keywords Bangladesh, Organizational performance, Business performance, Operational performance,
Lean implementation, Apparel industry
Paper type Research paper

1. Introduction
Lean manufacturing system (LMS) is an advanced approach that plays a vital role in the
manufacturer’s responses to the global business competition (Wickramasinghe and
Wickramasinghe, 2017). Market competition, uncertainty and variation in demand and
higher customer expectations are the main drivers for manufacturing firms to adopt LMS. International Journal of Lean Six
Sigma
Manufacturing organizations have implemented LMS to improve productivity and to Vol. 12 No. 5, 2021
pp. 923-943
produce high-quality products at a reduced cost in shorter lead times. LMS is a systematic © Emerald Publishing Limited
2040-4166
management system focused on identifying and eliminating non-value-added (NVA) DOI 10.1108/IJLSS-01-2020-0005
IJLSS activities from manufacturing processes (Scherrer-Rathje et al., 2009). NVA activities (a.k.a.
12,5 waste/muda) include overproduction, unnecessary transportation, excessive inventory,
over-processing, unnecessary motion, stoppage production (waiting) and defects. The
success of LMS implementation depends on how the organizations eliminate these wastes at
different levels of the production processes. Many organizations have been benefitted by
implementing LMS with increased operational and financial performance (Chaplin et al.,
924 2016; Fullerton and Wempe, 2009; Godinho Filho et al., 2016; Shah and Ward, 2003; Shah
and Ward, 2007; Yadav et al., 2018). The benefits of LMS implementation in various sectors
have been acknowledged by several researchers and practitioners (Godinho Filho et al.,
2016; Hernandez-Matias et al., 2019; Nawanir et al., 2013; Rahman et al., 2010; Valente et al.,
2019).
LMS was first introduced by Toyota in Japan, known as the Toyota Production
System (TPS), and then adopted by other automotive industries across the world. After
successful application in automotive industries, LMS has significantly contributed to
the success in a large variety of firms such as manufacturing, construction, health care
and process industries. Several research reveal that most of the lean studies are
contextualized in automotive and electronics industries with some extended interest in
construction, health care, hospitality, aerospace and process industries (Bhamu and
Singh Sangwan, 2014; Danese et al., 2018; Kovacevic et al., 2016; Miller and Chalapati,
2015).
However, the applications of LMS in the apparel manufacturing firms are limited to the
lean supply chain issues aiming to achieve the supply chain responsiveness and efficiency
(Danese et al., 2018; Henao et al., 2019; Purvis et al., 2014). Apart from this, most of the lean
studies have been conducted in developed countries giving less attention in developing
countries (Amoako-Gyampah and Gargeya, 2001; Danese et al., 2018; Jasti and Kodali, 2015;
Nawanir et al., 2013). Because LMS is a new paradigm specifically for the apparel industry
in Bangladesh, a fundamental question remains: “What are the impacts of LMS application
in the apparel industry in Bangladesh?”
The apparel industries in Bangladesh make a significant contribution to the national
economic development by exporting approximately 82% of the total country’s export
earnings, creating employment opportunities for about 4 million people (80% are women)
and contributing approximately 10% to the gross domestic product (BGMEA, 2019).
However, the apparel manufacturers are under immense pressure to remain competitive in
the dynamic market conditions. The fluctuation of customer demand, smaller batch size and
shorter manufacturing and delivery lead times are the common characteristics of apparel
products. Despite the empirical evidence of the benefits of LMS in various sectors, not many
systematic studies have been conducted in the context of the apparel firms for achieving
competitive advantages and enhancing operational performance (OP). Therefore, inspiring
from the research gap, this study makes an empirical investigation to examine the
impacts of LMS application on the organizational performance of the apparel industries in
Bangladesh.
This paper is organized as follows. Section 2 reviews the literatures on lean
manufacturing, lean bundles and organizational performances preceding the research gap
that this study aims to explore. Section 3 explains the research framework and Section 4
discusses the methodology used in this study. Then, factor analysis, model fit and
hypothesis tests are presented in Sections 5, 6 and 7, respectively, following which Section 8
caters to the discussion of the study. Section 9 presents the conclusion, managerial and
theoretical implications and recommendations for future studies.
2. Literature review Impact of lean
2.1 Lean manufacturing system manufacturing
Krafcik (1988), a researcher of the International Motor Vehicle Program (IMVP), first coined
the term lean production. A research group of Massachusetts Institutes of Technology under
IMVP investigated the success of TPS and summarized the research findings in the book
The Machine that Changed the World (Womack et al., 1990). In this book, the success of the
Japanese manufacturing system was highlighted and compared to the traditional mass
production system. The idea of lean production was popularized by the publication of this
925
book. Womack et al. (1990) define lean production as:
[. . .] it uses less of everything compared with mass production – half the human effort in the
factory, half the manufacturing space, half the investment in tools, half the engineering hours to
develop a new product in half the time. Also, it requires keeping far less than half the needed
inventory on-site, results in many fewer defects, and produces a greater and ever-growing variety
of products.
LMS has been defined differently by authors during the lean evolution process over time
(Bhamu and Singh Sangwan, 2014; Pettersen, 2009; Shah and Ward, 2007). Womack and
Jones (1996) defined the five guiding principles of lean production: specify a value, map the
value stream, create flow, establish pull and seek perfection. In general, most authors have
highlighted LMS as a pathway of manufacturing without waste (Bhamu and Singh
Sangwan, 2014; Vamsi Krishna Jasti and Kodali, 2014). LMS makes the company leaner,
flexible and more responsive by eliminating waste (Wilson, 2010). LMS provides
manufacturers a competitive edge by improving productivity and quality and reducing the
cost (Sisson and Elshennawy, 2015). Pettersen (2009) described the lean concept from
philosophical and practical perspectives. The philosophical perspective describes the
guiding principles and goals of the lean production and the practical perspective describes a
set of lean tools and practices (Shah and Ward, 2007). Shah and Ward (2007) identified a gap
between the two perspectives and noticed that the contribution of lean principles to the
organizational transformation is still unclear to many authors (Caldera et al., 2017). Shah
and Ward (2007) have suggested a performance measurement instrument based on lean
tools and practices as the basis for lean production research (Valente et al., 2019). Following
the suggestions, some authors adopted this operational measurement instrument for their
studies (Alemi and Akram, 2013; Alsmadi et al., 2012; Dal Pont et al., 2008; Godinho Filho
et al., 2016; Hofer et al., 2012; Nawanir et al., 2013; Valente et al., 2019).

2.2 Lean practices/lean bundles

LMS involves implementing a set of lean tools and practices for eliminating wastes and
creating values for the customers. Common lean tools highlighted in the literature are
kanban, takt time, level scheduling, poke-yoke, one-piece flow, cellular manufacturing, value
stream mapping, Single-minute exchange of dies, 5S, continuous improvement (CI), visual
management, total quality management (TQM), just-in-time (JIT), total productive
maintenance (TPM), human resource management (HRM) and so on. A lean bundle is an
aggregation of several lean practices that are interrelated and internally consistent (Dal Pont
et al., 2008; Shah and Ward, 2003). Shah and Ward (2003) studied 22 lean practices and
categorized them into four lean bundles as TQM, JIT, HRM and TPM. Several experts
investigated the application of numerous lean bundles without agreeing on the relative
importance between them (Nawanir et al., 2013; Shah and Ward, 2003). However, TQM, JIT
and TPM are the common lean bundles used by a number of researchers for measuring the
leanness (Hamja et al., 2019; Kaur et al., 2016; Rahman et al., 2010; Taj and Morosan, 2011).
IJLSS HRM or people management (PEM) is also a common lean bundle adopted by many
12,5 researchers (Dal Pont et al., 2008; Fullerton and Wempe, 2009; Gaiardelli et al., 2019; Hasle,
2014; Shah and Ward, 2003; Shah and Ward, 2007; Taj and Morosan, 2011; Thanki and
Thakkar, 2014). Top management commitment (TMC) plays a vital role in any change
management process. The success of lean implementation heavily depends on how
management commits and leaders extend their supports to the employees who are involved
926 with the lean implementation process (Emiliani and Emiliani, 2013; Timans et al., 2012;
Worley and Doolen, 2006). Several researchers agreed that the lean transformation process
fails because of the lack of management knowledge and basic understandings of lean
practices (Chay et al., 2015; Emiliani and Emiliani, 2013). There are some additional lean
bundles, also used by numerous authors and practitioners, such as process management
(PRM), pull system (PUS), CI and so on. Manufacturers need to select a set of lean bundles
that are appropriate for their manufacturing process (Anholon and Sano, 2016; Bamford
et al., 2015). Karim and Arif-Uz-Zaman (2013) stated that a wrong selection of lean bundles
could increase wastes, costs and production time. A set of lean bundles supported by
literature is listed in Table 1.

2.3 Organizational performance

Many companies around the world have implemented LMS to improve organizational
performance. However, assessing the contribution of LMS in improving organizational
performance is important to realize the desired benefits of lean practices. Many companies
have failed to realize the benefit of lean implementation because of the lack of measuring
leanness through appropriate performance measurement metrics (Alemi and Akram, 2013;
Anvari et al., 2013; Karim and Arif-Uz-Zaman, 2013). The clarity in the definition and
classification of the organizational performance is necessary to assess the performance.
Chavez et al. (2015) and Büyüközkan et al. (2015) highlighted operational and financial
performances as the two major performance indicators. Some authors defined business
performance (BP) as the outcome of operational, financial and market performance.
Fullerton and Wempe (2009) defined OP as non-financial manufacturing performance,

Lean bundles Supported literatures

JIT Shah and Ward (2007) Dal Pont et al. (2008), Rahman et al. (2010), Taj and Morosan
(2011) Kaur et al. (2016), Garza-Reyes et al. (2018), Hamja et al. (2019)
TQM Shah and Ward (2007), Dal Pont et al. (2008), Fullerton and Wempe (2009), Rahman
et al. (2010), Taj and Morosan (2011), Nawanir et al. (2013), Kaur et al. (2016), Hamja
et al. (2019)
TPM Shah and Ward (2007), Rahman et al. (2010), Taj and Morosan (2011), Panwar et al.
(2015) Kaur et al. (2016), Thanki et al. (2016), Garza-Reyes et al. (2018), Hamja et al.
(2019)
Employee Shah and Ward (2007), Dal Pont et al. (2008), Fullerton and Wempe (2009), Taj and
involvement Morosan (2011), Hasle (2014), Thanki et al. (2016), Gaiardelli et al. (2019)
Cellular layout Shah and Ward (2007), Fullerton and Wempe (2009), Hallgren and Olhager (2009), Taj
and Morosan (2011), Panwar et al. (2015), Thanki et al. (2016)
Pull system Shah and Ward (2007), Hallgren and Olhager (2009), Rahman et al. (2010), Taj and
Morosan (2011), Nawanir et al.(2013) , Powell et al. (2013), Panwar et al. (2015), Thanki
et al. (2016)
Table 1. Quick set-up Rahman et al. (2010), Taj and Morosan (2011), Panwar et al. (2015)
Lean bundles Small lot Rahman et al. (2010), Powell et al. (2013), Thanki et al. (2016)
which mediates the relationship between LMS and financial performance (profit). Nawanir Impact of lean
et al. (2013) have studied organizational performance by measuring OP and BP. manufacturing
In general, many studies support that lean implementation improves OP or non-financial
performance such as productivity (Fullerton and Wempe, 2009; Hallgren and Olhager, 2009;
Nawanir et al., 2018; Panwar et al., 2017; Yadav et al., 2018), cost reduction (Panwar et al.,
2018; Sahoo and Yadav, 2018; Thanki et al., 2016), quality improvement (Bajjou and Chafi,
2018; Belekoukias et al., 2014; Fullerton and Wempe, 2009; Sahoo and Yadav, 2018; Shah and
Ward, 2003) and inventory reduction (Bortolotti et al., 2013; Nawanir et al., 2013; Sahoo and
927
Yadav, 2018). Lean implementation also improves the BP of the organization in terms of
sales (Hofer et al., 2012; Nawanir et al., 2013; Nawanir et al., 2016; Yang et al., 2011),
profitability (Fullerton and Wempe, 2009; Nawanir et al., 2013; Nawanir et al., 2016; Thanki
et al., 2016) and customer satisfaction (Nawanir et al., 2013; Nawanir et al., 2016; Panwar
et al., 2015; Thanki et al., 2016). Some of the key performance indicators supported by
literature are listed in Table 2. Many authors from developed countries and comparatively
few from emerging countries identified the positive impacts of LMS on OP and BP. But the
impact of LMS on operational, business or overall organizational performance of the apparel
manufacturing firms in Bangladesh has not been explored.

3. Research framework
After an extensive literature review, the most widely used lean parameters are compiled and
regrouped into eight lean bundles, namely, TMC, PEM, PRM, TQM, JIT, CI, PUS and TPM.
The research framework (Figure 1) shows the theorized relationship between the integrated
LMS consisting of eight lean bundles and the organizational performance consisting of OP
and BP.

Operational performance
Productivity Shah and Ward (2003), Bhasin (2008), Fullerton and Wempe (2009), Rahman et al.
(2010), Bortolotti et al. (2013), Dora et al. (2013), Nawanir et al. (2013), Sahoo and
Yadav (2018)
Quality Shah and Ward (2003), Green and Inman (2007), Fullerton and Wempe (2009), Dora
et al. (2013), Nawanir et al. (2013), Belekoukias (2014), Panwar et al. (2015), Gamage
et al. (2017), Wickramasinghe and Wickramasinghe (2017), Bajjou and Chafi
(2018), Sahoo and Yadav (2018)
Cost reduction Shah and Ward (2003), Bhasin (2008), Rahman et al. (2010), Bortolotti et al. (2013),
Nawanir et al. (2013), Belekoukias (2014), Panwar et al. (2015), Bajjou and Chafi
(2018), Sahoo and Yadav (2018)
Inventory reduction Shah and Ward (2003), Green and Inman (2007), Bhasin (2008), Fullerton and
Wempe (2009), Bortolotti et al. (2013), Dora et al. (2013), Nawanir et al. (2013), Sahoo
and Yadav (2018)
On-time delivery Shah and Ward (2003), Green and Inman (2007), Bhasin (2008), Fullerton and Wempe
(2009), Rahman et al. (2010), Bortolotti et al. (2013), Dora et al. (2013), Nawanir et al.
(2013), Belekoukias (2014), Sahoo and Yadav (2018)
Cycle time/lead time Bortolotti et al. (2013), Dora et al. (2013), Belekoukias (2014), Panwar et al. (2015),
reduction Bajjou and Chafi (2018)
Business performance
Profitability (profit Green and Inman (2007), Bhasin (2008), Fullerton and Wempe (2009), Nawanir et al.
margin) (2013)
Sales Green and Inman (2007), Bhasin (2008), Nawanir et al. (2013) Table 2.
Customer Green and Inman (2007), Bhasin (2008), Rahman et al. (2010), Nawanir et al. (2013), Key performance
satisfaction Panwar et al. (2015) indicators
IJLSS
12,5 H1 Operational
Performance
(OP)
TMC H4 (Non-financial
PEM Performance)
PRM Lean H3 Organizational
928 Manufacturing Performance
TQM
System (LMS)
TPM
PUL H5
CI Business
JIT Performance
Figure 1. (BP)
Conceptual (Financial
framework H2 Performance)

3.1 Research hypotheses

This study examines a set of hypotheses to analyze the research question of whether the
implementation of LMS has any direct impact on the organizational performance in the
apparel industries. Lean implementation contributed significantly to Japanese and US firms.
The degree of success of the organization depends on how the organization creates a lean
culture.
OP is the non-financial performance measured mainly based on the manufacturing
performance of the firm. Many organizations around the world implemented LMS and
highlighted a better OP (Bhamu and Singh Sangwan, 2014; Nawanir et al., 2013; Panwar
et al., 2017). Therefore, in the context of apparel industries in Bangladesh, the following
hypothesis is proposed:

H1. LMS has a direct impact on OP.

BP of the firm is the financial performance such as sales, return on asset and profit margin.
Some non-financial factors can also be addressed as BP such as customer satisfaction and
employee morale within the organization (Green and Inman, 2007; Nawanir et al., 2016;
Thanki et al., 2016). Toyota as a representative example of lean practice has achieved
tremendous growth and financial success (Liker and Convis, 2012; Sisson and Elshennawy,
2015). Lean implementation leads to the improvement of the company’s BP by increasing
sales (Hofer et al., 2012; Nawanir et al., 2013; Nawanir et al., 2016) and profitability (Fullerton
and Wempe, 2009; Green and Inman, 2007; Nawanir et al., 2013; Nawanir et al., 2016; Thanki
et al., 2016). Therefore, the following hypothesis is proposed:

H2. LMS has a direct impact on BP.

Organizational performance depends on the non-financial shop-floor performance and the
financial performance of the organization. Literature reveals that successful lean
implementation may result in better organizational performance by eliminating wastes and
streamlining the manufacturing processes (Wickramasinghe and Wickramasinghe, 2017).
Most of the authors have suggested that practices of lean bundles have a positive impact on
organizational performance (Belekoukias et al., 2014; Shah and Ward, 2003). Finally,
achievement in manufacturing performance enhances organizational capabilities (Jabbour
et al., 2013). Hence, the following three hypotheses are formulated to investigate the overall
impact of lean implementation on organizational performance in the apparel industry in Impact of lean
Bangladesh: manufacturing
H3. LMS has a direct impact on organizational performance.
H4. Organizational performance is well supported by OP.
H5. Organizational performance is well supported by BP.
929
4. Methodology
The goal of this study is to examine how the implementation of LMS affects organizational
performance. Empirical data were collected from apparel industries in Bangladesh using a
structured questionnaire. The questionnaire was designed to collect information on the
demographic profile of the respondents as well as the company, degree of lean practices, OP
and BP. A five-point Likert scale was used to indicate the degree of agreement ranging from
“strongly disagree” to “strongly agree” for responses. The final questionnaire was mixed with a
few new items and the items used by other researchers (Abusa, 2011; Chauhan and Singh,
2012). Suggestions and views of the practitioners and academicians were incorporated to
ensure the effectiveness and relevance of the questions to the apparel industry. The target
respondents were production managers, factory managers, industrial engineers, general
managers and other decision-makers having intimate knowledge of apparel manufacturing.
Data were collected from 238 factories using non-probability convenient sampling. But a
sample size of 227 was finalized after a careful data screening process. The level of adoption of
Lean practices was different for different manufacturers. The organizational performance was
measured based on the degree of leanness. The performance data were collected using the
constructs OP and BP. The measurement items for independent and dependent variables (DVs)
are listed in Tables 3 and 4, respectively. Harman’s single-factor test is performed to identify
the threat of common method bias (CMB). The CMB test shows that the total variance
explained by the single factor is 21.216%, which is far below 50%. This result ensures that
there is no threat of CMB. AMOS 20.0 software is used for structural equation modeling (SEM).
Data management, descriptive statistics and factor analysis are performed using SPSS 20.0.

5. Factor analysis
Exploratory factor analysis (EFA) is performed for both the independent variable (IV) and DV.
The degree of LMS adoption is assessed through eight lean practices. Each practice is assessed
through multiple measured items such as TMC (6 items), PEM (10 items), PRM (11 items), JIT
(7 items), CI (6 items), PUS (4 items), TPM (8 items) and TQM (11 items). Summated average of
the items of each construct of lean practices such as Average of Top Management Commitment
(ATMC), Average of People Management (APEM), Average of Process Management (APRM),
Average of Total Quality Management (ATQM), Average of Total Preventive Maintenance
(ATPM), Average of Just-in-Time (AJIT), Average of Continuous Improvement (ACI) and
APUS are used for both EFA and confirmatory factor analysis (CFA).
The DV (i.e. organizational performance) is measured through two constructs OP
and BP. Factor analysis is performed separately for IV and DV. Kaiser-Meyer-Olkin
(KMO) values for the lean practices, OP and BP are 0.909, 0.708 and 0.778, respectively.
KMO values ensure the sampling adequacy of the measurement. Factors are extracted
using principal component analysis where LMS represents 54.471% of the total
variance extracted (single factor). Three factors of OP represent 63.237% and one factor
of BP represents 55.94% of the variance extracted. The summary of the factor analysis
IJLSS
Item Lean bundles (independent variables) Item Lean bundles (independent variables)
12,5
TMC Top management commitment (TMC) JIT Just-in-Time Production (JIT)
TMC1 Our company vision and mission JIT1 Our suppliers deliver raw materials and
statement accessories to us just as it is needed
TMC2 Top executives actively involved in JIT2 Shop floor layout facilitates low
establishing vision, mission and goals inventories and fast throughput
930 TMC3 Senior executives anticipate change and JIT3 Inventory level shows declining because
make plans to accommodate it of JIT delivery
TMC4 Top management encourages lean-based JIT4 We received on-time delivery from our
improvement programs suppliers
TMC5 Top management allocates adequate JIT5 We always deliver products to our
resources toward efforts to implement customer on time
new technology JIT6 Adopts total preventive maintenance to
TMC6 We have faith, trust and confidence in our support JIT
managers
PEM People Management (PEM) TPM Total Productive Maintenance (TPM)
PEM1 Effective selection and recruitment TPM1 The cleaning of equipment is critical to
process its performance
PEM2 Our employees receive training to perform TPM2 Basic cleaning and lubrication of
multiple tasks equipment is done by operators
PEM3 Cross training of workers is a regular TPM3 Operators inspect and monitor the
feature performance of their equipment
PEM4 Communication is open and continues in TPM4 Operators can detect and treat abnormal
three directions: up, down and across operating conditions of their equipment
PEM5 Our plant forms teams to solve problems TPM5 We upgrade inferior equipment
PEM6 Training needs are assessed periodically TPM6 Our production scheduling incorporates
and training budgets are allocated in the planned maintenance
company TPM7 Spare parts for maintenance are
PEM7 Our occupational health and safety managed centrally
practices are excellent TPM8 We dedicate a periodic inspection and
PEM8 Employee satisfaction is formally and maintenance system to keep the machine
regularly measured in operations
PEM9 Management believes that continual TPM9 Our equipment is in a high state of
training and upgrading of employee skill readiness for production at all times
is important
PEM10 We have a transparent and effective
appraisal system for recognizing and
rewarding employees
PRM Process Management (PRM) TQM Total Quality Management (TQM)
PRM1 We map the flow of the production TQM1 Statistical process control (SPC) is used
process (VSM) to identify and prevent quality problems
PRM2 We meet the customer demand and TQM2 Our shop floor employees are authorized
delivery schedule (takt time) to stop production for quality problems
PRM3 Our work is standardized TQM3 We use charts to determine whether our
PRM4 We use level scheduling for reducing manufacturing processes are in control
inventory level TQM4 Six sigma being followed holistically (six
PRM5 We reduce style changeover time (setup sigma practice)
time [SMED]) TQM5 We apply root cause analysis to ensure
PRM6 We design error detection and prevention the root cause of the problem (root cause
Table 3. method to achieve zero defects (poka analysis)
yoke) TQM6 Our customers are actively involved in
Measurement items
PRM7 We make the manufacturing process the product design process
(independent
variables) (continued)
 Impact of lean
Item Lean bundles (independent variables) Item Lean bundles (independent variables)
manufacturing
visible to everyone (visual management) TQM7 We are highly responsive to our
PRM8 Notification system for quality and customer needs
process problems (Andon) TQM8 Quality circle concept is used holistically
PRM9 Our machines are grouped according to TQM9 Workers and supervisors are rewarded
the product family (group technology) for quality improvement
PRM10 Products are classified with similar TQM10 We practice TQM for achieving zero 931
processing requirements (cellular defects
manufacturing) TQM11 Kaizen or continuous improvement is a
PRM11 We practice 5S to organize our workplace regular practice in this plant
(5S practice)
CI Continuous Improvement (CI) PUS Pull System (PUS)
CI1 Organization encourages continual PUS1 Items are produced only when demanded
improvement of all its products, services by the customers
and processes PUS2 Items are produced only in necessary
CI2 We frequently measure the product and quantities, no more no less
process quality PUS3 Production at a workstation is performed
CI3 Continuous improvement makes our based on the demand of the next
performance a moving target workstation
CI4 We believe that there is always scope for PUS4 We use kanban (card) to authorize the
more improvement production
CI5 We use QC tools extensively for process
control and improvement
CI6 Our company uses PDCA cycle extensively
for process control and improvement

Note: QC = Quality Control; PDCA = Plan-Do-Check-Act Table 3.

Business performance (dependent

Item Operational performance (dependent variables) Item variables)

OP Operational performance (OP) BP Business performance (BP)

OP1 The defect rate has decreased (quality) BP1 Our customers are highly satisfied
OP2 Customer complaint has decreased (quality) with the overall quality of our products
OP3 We maintained on-time delivery of shipments BP2 Our sales per employee (sales growth)
OP4 Our delivery lead time has significantly reduced has increased
(speed delivery) BP3 Employees morale is high
OP5 Our manufacturing lead time has significantly BP4 Our profit margin has increased
reduced (speed delivery) BP5 Our return on asset has increased
OP6 Our purchasing lead time has significantly
decreased (speed delivery)
OP7 Our labor productivity has increased
OP8 Our production line efficiency has increased Table 4.
OP9 Our unit manufacturing cost has decreased Measurement items
OP10 Our fabric utilization ratio has increased (dependent variables)

(EFA) is presented in Table 5. Items with factor loading more than 0.6 are retained. Item
APUS has been deleted because of the low loading factor (<0.6). Factor names, item
description with loading factor (>0.6) and internal consistency and reliability (a > 0.7)
of the constructs are presented in Table 6.
IJLSS 6. Validating the measurement model
12,5 Validating the measurement model of SEM is performed by CFA. The measurement model
consists of five latent constructs and their correlations are presented in Figure 2 and Table 8.
Unidimensionality, reliability and validity of the latent constructs are assessed using CFA.
Two recognized validity tests (convergent and discriminant validity) are performed for
the measurement model. Three measures of convergent validity are unidimensionality
932 (factor loading) check, average variance extracted (AVE) and composite reliability (CR).
The cutoff value of factor loading is 0.6 for the unidimensionality requirement (Zainudin,
2012). The threshold values for AVE and CR are 0.5 and 0.7, respectively (Fornell and
Larcker, 1981). The items with low-factor loadings (less than 0.6) are removed from the
measurement model. The factor names, factor loadings, AVE, CR and reliability coefficient
alpha values for latent constructs are shown in Table 7. All the values exceed the cutoff
values that ensure the convergent validity of the model. To satisfy the discriminant validity,
the square root of AVE should be larger than inter-construct correlations (Fornell and

EFA results IV DVs

LMS OP BP

KMO measure of sampling adequacy 0.909 0.708 0.778

Bartlett’s test of sphericity
Approximate chi-square (l 2) 770.995 771.925 358.555
df 28 45 10
Table 5. Significance level 0.000 0.000 0.000
Summary of Eigen value
1
1
1
exploratory factor Number of factors extracted 1 3 1
analysis Total variance explained (%) 54.471 63.23 55.945

Item Cronbach’s
Factor name Items Item description loadings alpha

LMS ATMC Summated average of top management commitment 0.66 0.88

APEM Summated average of people management 0.80
APRM Summated average of process management 0.74
ACI Summated average of continuous improvement 0.73
AJIT Summated average of just-in-time 0.73
ATPM Summated average of total preventive maintenance 0.60
ATQM Summated average of total quality management 0.78
Quality OP1 The defect rate has decreased 0.77 0.78
OP2 Customer complaint has decreased 0.85
Lead time OP4 Our delivery lead time has significantly reduced 0.83 0.82
OP5 Our manufacturing lead time has significantly 0.82
reduced
OP6 Our purchasing lead time has significantly reduced 0.72
Productivity OP7 Our labor productivity has increased 0.75 0.7
Table 6. OP8 Our production line efficiency has increased 0.71
Factor name, item Business BP3 Employees morale is high 0.66 0.80
loadings and performance BP4 Our profit margin has increased 0.79
constructs reliability BP5 Our return on asset has increased 0.84
 Impact of lean
manufacturing

933

Figure 2.
Measurement model
and correlation
between the
constructs

Larcker, 1981). The discriminant validity result (Table 8) shows that the square roots of
AVEs (along the diagonal and bold italic) are larger than any inter-construct correlations.
Therefore, the discriminant validity of this measurement model is also established.

6.1 Measurement model fit

The measurement model is verified with the different model fit indices to determine
how well the empirical sample data fit the hypothesized model. The root mean square
error approximation value between 0.05 and 0.08 represents an adequate fit model
(Browne et al., 1993). The suggested cutoff values of the goodness of fit index,
comparative fit index, normed fit index and incremental fit index (IFI) are greater than
or equal to 0.9 (Hooper et al., 2008; Hu and Bentler, 1999; Marsh and Grayson, 1995).
The chi-square/degree of freedom must be less than 5 or equal to 5 (Marsh and
Grayson, 1995). Because the fit indices of the measurement model of this study
(Table 9) exceed the aforementioned cutoff values, the measurement model is a good
fit model.
IJLSS Observed Standardized Composite Average variance
12,5 Factor variables loading reliability extracted
li CR > 0.7 AVE > 0.5 Cronbach’s a

Lead time OP4 0.828 0.83 0.62 0.821

OP5 0.822
OP6 0.715
934
BP BP3 0.657 0.81 0.59 0.8
BP4 0.795
BP5 0.835
Quality OP1 0.764 0.79 0.66 0.781
OP2 0.855
LMS APEM 0.802 0.88 0.52 0.877
APRM 0.715
ACI 0.713
AJIT 0.733
ATPM 0.605
Table 7. ATQM 0.781
Convergent validity ATMC 0.659
of the measurement Productivity OP8 0.713 0.70 0.54 0.697
model OP7 0.751

LMS Lead time Quality Productivity BP AVE

LMS 0.721 0.52

Table 8. Lead time 0.431*** 0.787 0.62
Discriminant validity Quality 0.382*** 0.417*** 0.812 0.66
of the measurement Productivity 0.658*** 0.464*** 0.185*** 0.735 0.54
model BP 0.48*** 0.401*** 0.175*** 0.701*** 0.768 0.59

Name of the index Cutoff values Model index value Comment

Chi-square/df #5.0 3.164 Good fit model

GFI
0.9 0.898 Marginally good fit
CFI
0.9 0.927 Good fit model
IFI
0.9 0.928 Good fit model
Table 9. TLI
0.9 0.909 Good fit model
Fit indices of the RMR #0.08 0.025 Good fit model
measurement model RMSEA #0.08 0.071 Good fit model

7. Hypotheses testing using structural equation modeling

The structural models of the hypothesized relationship are shown in Figures 3 and 4. Five
hypotheses (as mentioned in Section 3.1) are developed to find the relationship between LMS
and organizational performance. Structural Model 1 (Figure 3) represents the causal
relationship between LMS, OP and BP. The causal relationships are translated into the
following set of equations:
Impact of lean
manufacturing

935

Figure 3.
Structural Model 1

Figure 4.
Structural Model 2
IJLSS h 1 ¼ b 12 z þ R1 . . . . . . . . . (1)
12,5
h 1 ¼ b 22 z þ R1 . . . . . . . . . (2)
where h 1 = OP, h 2 = BP, z = LMS, b 12 and b 22 are standardized beta estimates and R1
and R2 are the residual variances. Equations (1) and (2) are the regression equations of the
936 structural model (Figure 3). The hypotheses (H1 and H2) testing results are shown as
follows (Table 10).
H1 claims that LMS has a direct impact on OP. The direct impact of LMS on OP is 81%,
which indicates, if the LMS practice goes up by 1 standard deviation, the OP goes up by 0.81
standard deviations. The value of the coefficient of determination, R2 is 0.66. Therefore, this
model supports the H1 ( b 12 = 0.81; p < 0.001).
Again, H1 is found well supported by three sub-hypotheses named H1a, H1b and H1c
representing the three major components of OP. H1a: OP is significantly related and well
supported by productivity performance. The significant path model supports this
hypothesis ( b = 0.784; p < 0.001). H1b: OP is significantly related and well supported by
lead-time performance. The model confirms the hypothesis through a significant path model
( b = 0.628; p < 0.001). H1c: OP is significantly related and well supported by quality
performance. This hypothesis is also well supported by the model ( b = 0.44; p < 0.001).
H2 claims that LMS has a direct impact on BP. The model shows the direct impact of LMS on
BP is 52% and the R2 value is 0.27. Therefore, this model supports H2 (b 22 =0.52; p < 0.001).
The overall impact of LMS on organizational performance is shown in Structural Model 2
(Figure 4). This model is used for testing hypotheses H3, H4 and H5. The direct impact of
LMS on organizational performance is 73%. The R2 value is 0.54, which indicates that 54%
of the variance of organizational performance is accounted for by the LMS. This model
supports the H3 ( b = 0.73; p < 0.001). Organizational performance is well supported by
OP (H4) and BP (H5). The model confirms H4 by three sub-hypotheses (H4a: b = 0.88;
p < 0.001, H4b: b = 0.61; p < 0.001, H4c: b = 0.37; p < 0.001). The Structural Model 2 also
supports H5 through significant path model ( b = 0.71; p < 0.001) (Table 11).

Standardized
Hypothesis Construct Path Construct Beta estimate SE CR p-value Comments

H1 OP / LMS 0.81 0.116 7.199 *** Significant

Table 10. H1a Productivity / OP 0.784 Reference Point
Hypotheses test H1b Lead time / OP 0.628 0.160 5.689 *** Significant
results (structural H1c Quality / OP 0.445 0.172 4.66 *** Significant
model 1) H2 BP / LMS 0.52 0.118 6.302 *** significant

Standardized
Hypothesis Construct Path Construct Beta estimate SE CR p value Comments

H3 Organizational / LMS 0.73 0.112 7.199 *** Significant

performance
Table 11. H4a Productivity / OP 0.88 Reference Point
Hypotheses test H4b Lead time / OP 0.61 0.127 5.689 *** Significant
results (structural H4c Quality / OP 0.37 0.144 4.66 *** Significant
model 2) H5 BP / LMS 0.71 0.134 6.816 *** significant
7.1 Fit indices of the structural model Impact of lean
The chi-square (l 2) test is very sensitive to the sample size. The chi-square almost always manufacturing
rejects the model when a large sample size (>200) is used (Bentler and Bonett, 1980;
Jöreskog and Sörbom, 1993). Absolute chi-square statistic has been ignored, because the
sample size of this study is 227. The relative chi-square (l 2/df) is an alternative to absolute
statistic and the recommended value of this ratio is as high as 5 (Marsh and Grayson, 1995).
Literature suggests that at least one fit index from each category of fit indices (absolute fit, 937
incremental fit and parsimony fit) need to be satisfied for a good fit model. Based on the
cutoff values and fit indices of both the models (Structural Models 1 and 2), it can be
concluded that both the models are good fit models (Table 12).

8. Results and discussion

The objective of this study is to investigate the impacts of LMS on non-financial and
financial performances and also on the overall organizational performances. Five
hypotheses are tested and the relationships are verified between LMS and organizational
performance.
The direct impact of LMS on OP (i.e. H1) is 81% (p < 0.001) and the coefficient of
determination R2 is 0.66. The result indicates that 66% of the variance of OP is accounted for
by LMS. Again, OP is measured in terms of productivity, quality and lead time performance
(i.e. H1a, H1b and H1c):
 H1a test result ( b =0.784; p < 0.001) indicates that productivity performance is
strongly associated with OP and lean implementation improves the productivity of
the apparel manufacturing industries. The finding of this study is consistent with
the findings of other researchers in terms of productivity improvement (Panwar
et al., 2017; Thanki et al., 2016; Yadav et al., 2018).
 H1b test result ( b =0.628; p < 0.001) indicates that quality improvement is positively
associated with OP. Hence, LMS contributes significantly to the quality improvement of

Model 1 Model 2
Index Name of the Cutoff Model index Model index
category index values value Comment value Comment

Absolute fit (l )/df
2
#5.0 2.63 Good fit model 2.37 Good fit model
GFI
0.9 0.874 Marginally 0.885 Marginally fit model
good fit
RMR #0.08 0.048 Good fit model 0.041 Good fit model
RMSEA #0.08 0.085 Good fit model 0.078 Good fit model
Incremental CFI
0.9 0.891 Marginally fit 0.908 Good fit model
fit model
IFI
0.9 0.892 Marginally fit 0.909 Good fit model
model
TLI
0.9 0.871 Marginally fit 0.891 Marginally fit model
model
Parsimony PNFI Around 0.707 Good fit model 0.721 Good fit model
fit 0.5 Table 12.
PGFI Around 0.657 Good fit model 0.666 Good fit model Fit indices of the
0.5 structural model
IJLSS apparel products by eliminating defects. This result is well supported by other studies
12,5 (Belekoukias et al., 2014; Sahoo and Yadav, 2018; Yadav et al., 2018).
 H1c test result ( b =0.44; p < 0.001) indicates that the lead time reduction has a
significant effect on OP. This result is consistent with other studies (Bajjou and
Chafi, 2018; Belekoukias et al., 2014; Panwar et al., 2018; Sahoo and Yadav, 2018;
Thanki et al., 2016).
938
Therefore, apparel manufactures can improve their OP by reducing delivery lead time (OP4),
manufacturing lead time (OP5) and purchasing lead time (OP6).
The direct impact of LMS on BP (i.e. H2) is 52% (p < 0.001) and the value of R2 is 0.27.
The R2 value indicates that 27% of the variance of BP is accounted for by the
implementation of LMS. The findings of this study can be viewed is a cross verification of
the research findings by other researchers in terms of employee morale, sales, profitability,
return on assets and customer satisfaction (Hofer et al., 2012; Nawanir et al., 2016; Panwar
et al., 2015; Thanki et al., 2016). The association between LMS and BP indicates that the R2
value is significantly low (0.27). There could be two explanations for this poor value of R2.
First, this is not uncommon, because BP is not only influenced by the manufacturing
performance but also by some other business initiatives. Hofer (2012) states that lean
implementation improves operation efficiency by reducing wastes, and thereby increases
the financial performance. Second, the model included only three measurement items for BP
that might be insufficient for explaining more variances. Some of the measurement items of
BP were deleted because of poor factor loadings.
The impact of LMS on the overall organizational performance is 73% (Structural
Model 2). The value of R2 is 0.54, which indicates that 54% of the variance of organizational
performance is accounted for by the LMS implementation. This test indicates that LMS is
strongly associated with BP.
As mentioned earlier, LMS practices have been adopted by several apparel
manufacturing firms. The impact of LMS on organizational performance in this study is
found consistent with other studies conducted in both developed and developing countries.
Based on the results of this study, apparel manufacturers should be highly encouraged to
implement LMS. Apparel manufacturers should give more effort to make lean
implementation initiatives more successful. At present, most of the apparel manufacturers
are adopting different lean bundles at different levels. An integrated approach to lean
practices would be more beneficial to apparel manufacturers.

9. Conclusion
LMS implementation has been beneficial to many organizations. Companies are looking
forward to LMS implementation to enjoy the benefits in terms of OP and BP. This study
investigates the impact of LMS on OP and BP. The findings of this study have both
theoretical and managerial implications. This empirical study confirms the theoretical
relationship among LMS, organizational performance, OP and BP. This study enriches the
existing literature on lean practices and their impacts on organizational performance. This
will facilitate the researchers for theory development and further empirical study in apparel
industries and other manufacturing firms. With the diagnosis of this study, the apparel
firms can develop their action plans for LMS implementation.
The practical implication of this study is that the results of this study will create
substantial interest to the managers of developing countries to take the initiative to
implement LMS. This study will allow practitioners to gain in-depth knowledge and a better
understanding of the LMS knowledge domain. The practitioners’ interest and a holistic
approach to lean implementation will lead apparel firms to achieve competitive advantages. Impact of lean
Most importantly, it will provide guidelines to promote LMS implementation as a weapon to manufacturing
improve the firm’s performance.
It is accepted that any research is always associated with some inherent limitations that
likely opens avenues for further research. First, we examine the impacts of the overall LMS,
whereas the individual impact of each lean bundle is out of the scope of this study; it would
be interesting for future research to examine which lean bundle/s could greatly impact the
organizational performance. Second, although the sample size was adequate and 939
representative, a random sampling instead of the convenient sampling would be appropriate
for more generalization of the research findings. Third, agreeing that the concept of lean
manufacturing is new in the apparel industries in Bangladesh; some case studies from the
apparel industries are necessary to generalize the conclusions. This study can be extended
further in other manufacturing and service organizations in Bangladesh for the
generalization of the research findings.

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