The complementary effect of lean manufacturing and digitalisation on operational performance

Abstract

The most recent trend manufacturers have embraced to seek operational performance improvements is the use of a wide range of digital technologies typically associated with Industry 4.0. However, few studies have investigated the relationship between such technologies and the long-established lean manufacturing domain, and how they, together, influence operational performance. Based on data from a cross-sectional survey of manufacturing companies, this study investigates the relationships between the use of lean manufacturing, factory digitalisation, and operational performance using hierarchical multiple regression analysis. While simultaneously controlling for the effects of production repetitiveness, company size, and length of lean manufacturing implementation, the findings show that both lean manufacturing and factory digitalisation individually contribute to improved operational performance. Furthermore, it is found that when used together, they have a complementary (or synergistic) effect that is greater than their individual effects combined. These research findings provide both theoretical and practical insights into how lean manufacturing and factory digitalisation affect the operational performance of manufacturing firms. In light of the upcoming fourth industrial revolution, these findings suggest that lean manufacturing is not obsolete but rather is more important than ever in order to reap the benefits from emerging technologies and translate them into improved operational performance.