When Lean Meets Industry 4.0: A Case-Based Research for Exploring the Effects of Lean 4.0 on ESG and Sustainability Performance

Abstract

With the global trend of implementing Industry 4.0, the conventional Toyota Production System has been adapted to incorporate Lean 4.0 principles, which emphasize not only productivity and efficiency but also environmental, social and governance (ESG) and sustainability. We present a conceptual framework of Lean 4.0 to explore its effects on sustainability and the best implementation practices supported with a multiple-case study involving two award-winning companies recognized for their Industry 4.0 and Lean implementation in Taiwan. Our research draws on the conceptual relationship among Industry 4.0 and Lean 4.0 to investigate the ESG and sustainability performance based on the widely adopted global reporting initiative standards. We conduct within-case analysis to assess each company’s implementation status, followed by cross-case analysis to compare performance and extract managerial insights. Findings reveal that successful Lean 4.0 implementation requires more than just adopting new technologies—it demands long-term top management commitment, operational transformation, and organizational restructuring. We provide managerial and policy insights across organization, operations, people, and technology to drive sustainable business growth. We further propose best implementation practices for internal business functions and external enabling technologies to reap the opportunities and benefits of Lean 4.0.