The relationship between the implementation of lean manufacturing in the industrial SMEs and their financial performance: multiple case studies

Abstract

The manufacturing sector in the last decades deep has progressively been adopting the Lean Production, obtaining as a result significant gains in quality, productivity, flexibility, producing with lower costs and delivery times. For the small and medium sized enterprises (SMEs), it has not been different, however with no assurance of obtaining financial gains resulting from that action. Hence, the main purpose of this work was to investigate how the financial performance of the Brazilian industrial SMEs behaves as the lean manufacturing practices implementation varies. To accomplish that, a thorough literature review was performed aiming at identifying how this subject has been considered in the recent Industrial Engineering and Operations Management writings. This enabled the proposition of some hypotheses that were validated through multiple case studies, comprising three small and three medium sized Brazilian industrial companies. The results obtained showed that amongst the variables that measure the financial performance, only the net profit and return on sales (ROS) showed a significant positive correlation with the degree of adoption of the Lean initiatives. However, this relationship was determined by means of correlations that, as is well known, do not establish a relation of causality.