—The purpose of the paper is to examine the importance of incorporating lean production (LEAN) in the Malaysian manufacturing industry. Lean production investigated in this paper consists of two important dimensions namely Just-In-Time and technology & innovation. This study utilizes two hundred and five manufacturing companies, selected randomly from the Federation of Malaysian Manufacturers Directory. The study measures senior production or lean managers’ perception of the lean production and the level of performances in their companies. Grounded by the Program Theory, this paper specifically investigates whether the length of lean adoption moderates the linkage between lean production and business performance using the hierarchical regression analysis. Pearson’s correlations exhibit significant correlations between the two lean practices and business performance measures. The result also provides evidence that the length of lean adoption moderates the linkage between technology & innovation and business performance (operationalized by ROS and ROI). Therefore, long term adopters of lean production would benefit in the long run. The findings of the study provide a striking demonstration of the importance of lean in enhancing the performances of the Malaysian manufacturing companies. The result indicates that manufacturing companies should emphasize greater attention to ‘new technology and innovation’ and ‘Just–in-Time’ as well as a greater degree of management support for lean production enhancement initiatives.
—Lean production, business performance, JIT, technology and innovation.
The authors are with the Graduate School of Business, Universiti Kebangsaan Malaysia, 43600 Bangi, Selangor, Malaysia (e-mail: araa@ ukm.my, email@example.com).
Cite:Arawati Agus and Rosman Iteng, "Lean Production and Business Performance: The Moderating Effect of the Length of Lean Adoption," Journal of Economics, Business and Management vol. 1, no. 4, pp. 324-328, 2013.