Structural Equation Modelling of lean manufacturing practices

The purpose of this research study is to analyse lean manufacturing practices in different industries and to identify the critical factors for its success implementation. Despite the fact that lean manufacturing has been frequently promoted as a means of improving business competitiveness, little empirical evidence exists in the literature validating its positive link with organisational performance. Lean manufacturing practices not only help in reducing the number of defects but also reduces the cost of production. For this purpose, empirical data is collected to measure the lean manufacturing practices prevailing in different industries located in Tamil Nadu, India. A Structural Equation Modelling (SEM) technique is used to build the measurement and structural models. Later, statistical estimates are used to validate the model that has been built. The data analysis helps to determine whether to accept or reject the hypothesis that has been stated based on the structural model. The result shows how lean manufacturing practices are correlated and help in improving the organisational performance among the industries being surveyed.