Lean and agile manufacturing: complementary or competing capabilities?

Introduction

Increasing competition drives manufacturing organizations to adopt internal and supply chain level strategic improvement programs (Malhotra and Mackelprang, 2012). Dynamic customer preferences and expectations have been identified as critical driving forces for organizations to adopt certain improvement initiatives to meet these challenges (Ghobakhloo and Azar, 2018). As a result, organizations have adopted system-level improvement strategies such as agile manufacturing (AM) and lean manufacturing to enhance their competitive capabilities and maintain competitive advantage (Ghobakhloo and Azar, 2018; Inman et al., 2011; Zelbst et al., 2010). Lean manufacturing and AM initiatives have been regarded as 21st-century manufacturing paradigms (Crocitto and Youssef, 2003; Shah and Ward, 2003) and are generally considered as stepping stones toward achieving manufacturing excellence.

There is a conflicting perspective in the extant operations management literature on the mutually synergetic implementation between lean manufacturing and AM. This debate is covered later in the paper. A positive relationship between lean manufacturing and AM initiatives has been reported (Inman et al., 2011; Narasimhan et al., 2006), but at the same time, it is also reported that lean manufacturing and AM are competing streams from practices’ perspective and also target different outcome capabilities (Hallgren and Olhager, 2009). Discussion in literature on the causes and dimensions of conflicts and incompatibility between lean manufacturing and AM has initiated a stream of research (Ghobakhloo and Azar, 2018; Iqbal et al., 2018). This research study seeks to address the following questions:

Are lean manufacturing and AM competing or mutually exclusive paradigms?

Are lean manufacturing and AM complementary or mutually supportive paradigms?

If complementary capabilities, then what effects lean manufacturing and AM complementarity have on operational, market, and financial performance of a firm?

We propose an integrated framework that builds upon complementary theory (Milgrom and Roberts, 1995), theory of systems (ToS) (Skyttner, 2005), and concept of fit (Venkatraman, 1989) to assess complementary effects of lean manufacturing and AM. This study proposes and empirically examines whether lean manufacturing and AM are complementary or competing capabilities. Data from Pakistani apparel manufacturing and exporting industry are collected to test the proposed model using structural equation modeling approach. Apparel industry has in-built characteristics of responsiveness, shortened system changeover, high quality and product customization, and pressures of low cost and lead times....