The relationships between Lean manufacturing, management accounting and firm performance: Are they constrained in time?

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Abstract

Lean manufacturing has been adopted by numerous western companies as an answer to an increasing competitive environment. Lean manufacturing is seen as an enterprise-wide strategy encompassing a transformation of manufacturing practices, affecting companies’ management accounting practices and, likewise, Lean manufacturing affects employee’s mindsets. The extent of which such a transformation can occur is constrained in time as it requires employees and management to unlearn old principles and practices before new ones can be fine-tuned and put fruitfully into use. This study investigates the relationship between Lean manufacturing, management accounting practices, Lean thinking and firm performance. Using survey data from 368 different manufacturing facilities, we construct a structural equation model and we develop hypotheses predicting relationships between Lean manufacturing, management accounting practices, Lean thinking and firm performance. Dividing our sample into subgroups, we also predict that these relationships are affected by the time companies having had Lean manufacturing. We contribute to research in several ways. We find that Lean manufacturing is positively associated with management accounting practices. Specifically, we document that Lean manufacturing is positively associated with Value Stream Costing, Lean visual controls and, more importantly, measures of labor and materials efficiency. Lean manufacturing is positively related to Lean thinking and both are positively associated with operational performance and so are Lean visual controls. We also document that the management accounting practices intervene affecting operational performance and they intervene with Lean thinking as well. Lastly, the relationship between Lean manufacturing and measures of labor and materials efficiency and the relationship between Lean manufacturing and operational performance are positively moderated by the time the manufacturing companies having had Lean manufacturing.
Original languageEnglish
Title of host publicationMAR 2016 - MANUFACTURING ACCOUNTING RESEARCH CONFERENCE Proceedings
Number of pages32
PublisherEuropean Institute for Advanced Studies in Management, EIASM
Publication date2016
Publication statusPublished - 2016
EventThe Manufacturing Accounting Research Conference - Lisabon, Portugal
Duration: 15 Jun 201617 Jun 2016
http://www.eiasm.org/frontoffice/event_announcement.asp?event_id=1155

Conference

ConferenceThe Manufacturing Accounting Research Conference
CountryPortugal
CityLisabon
Period15/06/201617/06/2016
Internet address
SeriesEIASM Conference papers

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