Analyzing Critical Success Factors of Lean 4.0 Implementation in Small and Medium Enterprises for Sustainable Manufacturing Supply Chain for Industry 4.0 Using PLS-SEM

Abstract

Lean 4.0 (L4.0) is a transformed form of traditional lean to suit Industry 4.0’s (I4.0) requirements. The L4.0 has a great deal of potential to match the I4.0’s challenges in terms of speed, dynamics, and efficacy once it has been digitalized. The study aims to identify and model the L4.0 CSFs for successful lean implementations in SMEs to suit I4.0 needs. The thorough analysis of the literature led to the identification of the L4.0 CSFs. The expert panel from SMEs was involved in selecting the relevant 22 L4.0 CSFs that suited the needs of manufacturing SMEs. Based on the feedback of the expert panel, a questionnaire survey was carried out. Further, collected responses were analyzed using an exploratory factor analysis (EFA). The EFA results identified four major groups: ‘worker-enabled technologies’, ‘IT-enabled technologies’, ‘management’, and ‘L4.0’ related CSFs. Furthermore, the study uses partial least square structural equation modeling (PLS-SEM) to simulate the L4.0 CSFs and identify the influence of each CSF toward successful lean implementation. The PLS-SEM results confirm that the lean CSFs have positive effects on successful lean implementation. The present research contributes to enhancing the knowledge and L4.0 practices of manufacturing SMEs. The results show that successful implementation will promote ‘productivity improvements (PI)’, ‘waste reduction (WR)’, ‘competitive advantage (CA)’, and ‘sustainable manufacturing system (SMS)’.