Lean production supply chain management as driver towards enhancing product quality and business performance: Case study of manufacturing companies in Malaysia

The purpose of this paper is to obtain a better understanding of the extent to which lean production permeates manufacturing companies in Malaysia by drawing on supply chain management (SCM) managers' or production managers' perception of lean production practices and level of performances in the industry.

The instrument used in this study is a structured survey questionnaire consisting of two major parts. The first part comprises several variables measuring lean production practices, and the second part consists of several performance measurements. Sample companies are chosen from Malaysian manufacturing companies listed in the Federation of Malaysian Manufacturers directory. From the 300 companies sampled, 200 responses were completed, representing a 67 per cent response rate.

The results support the conceptual model, demonstrating strong association between lean production, product quality performance, and business performance. The structural equation modelling (SEM) results reveal that “reduced setup time” appears to be of primary importance in the linkage between lean production, product quality performance and business performance. It is also instructive, from a score of 67.21 on the Malaysian Lean Production Index (MLPI), that manufacturing companies in Malaysia must marshal their effort to implement a more effective lean production SCM in order to improve on product quality performance and business performance.

This research adds to the body of knowledge on lean production SCM in manufacturing industry. This paper may be of particular interest to practicing production managers, or SCM managers, as it suggests what factors should be emphasized in lean production.

The originality of this paper lies within the context in which this study is undertaken as it seeks to address key relationships between lean production, product quality performance and business performance within the Malaysian manufacturing industry, where relatively few studies are available. In addition, relationships between constructs are analyzed through SEM that measures not only magnitude but also the causal direction of the relationships.