Integrated lean-green practices and supply chain sustainability framework

Abstract

Integration of lean-green practices has benefited companies in many ways, particularly the large ones. Small and Medium Enterprises (SMEs), as key players within supply chains, should also be encouraged to apply the lean and green practices to support the large enterprises in the supply chain. However, it remains all time challenging for SMEs that operate with limited resources, and often emphasize on short-term goals with rapid turnaround. The impact of green-lean practices on sustainability performance has been investigated earlier, however further study is needed to understand the phenomena in context of SME supply chain. This study examined the moderating effects of top management commitment and leadership (TMCL) and organizational culture transformation (OCTr) on the relationship between Lean Practice (LP) and Green Practice (GP). Further, it investigated the moderating effect of both policy initiative (PI) and collaborative synergy (CS) on the relationship between GP and sustainability performance. The survey-based study analyzed the data from 345 Indonesian manufacturing SMEs using structural equation modeling (SEM) with Smart-PLS. The findings suggest that GP mediates LP to improve sustainability performance of SMEs. TMCL facilitates significantly the adoption of integrated lean and green practices. Meanwhile, OCTr, PI, and CS did not have a significant moderating effect. It means that OCTr does not significantly moderate lean practices for the adoption of green practice. Similarly, results demonstrate that neither PI nor CS moderate the correlation between green practice and sustainability performance of supply chain in manufacturing SMEs. The findings help SME owners or managers to build a comprehensive model of a lean-green system to direct SMEs to achieve sustainable development.