International Journal of Production Research

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The complementary effect of lean manufacturing

and digitalisation on operational performance

Sven-Vegard Buer, Marco Semini, Jan Ola Strandhagen & Fabio Sgarbossa

To cite this article: Sven-Vegard Buer, Marco Semini, Jan Ola Strandhagen & Fabio
Sgarbossa (2021) The complementary effect of lean manufacturing and digitalisation on
operational performance, International Journal of Production Research, 59:7, 1976-1992, DOI:
10.1080/00207543.2020.1790684

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INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
2021, VOL. 59, NO. 7, 1976–1992
https://doi.org/10.1080/00207543.2020.1790684

The complementary effect of lean manufacturing and digitalisation on

operational performance
Sven-Vegard Buer , Marco Semini, Jan Ola Strandhagen and Fabio Sgarbossa

Department of Mechanical and Industrial Engineering, NTNU - Norwegian University of Science and Technology, Trondheim, Norway

ABSTRACT ARTICLE HISTORY

The most recent trend manufacturers have embraced to seek operational performance improve- Received 28 August 2019
ments is the use of a wide range of digital technologies typically associated with Industry 4.0. Accepted 26 June 2020
However, few studies have investigated the relationship between such technologies and the KEYWORDS
long-established lean manufacturing domain, and how they, together, influence operational per- Lean manufacturing;
formance. Based on data from a cross-sectional survey of manufacturing companies, this study digitalisation; Industry 4.0;
investigates the relationships between the use of lean manufacturing, factory digitalisation, and smart manufacturing;
operational performance using hierarchical multiple regression analysis. While simultaneously con- operational performance
trolling for the effects of production repetitiveness, company size, and length of lean manufacturing
implementation, the findings show that both lean manufacturing and factory digitalisation individ-
ually contribute to improved operational performance. Furthermore, it is found that when used
together, they have a complementary (or synergistic) effect that is greater than their individual
effects combined. These research findings provide both theoretical and practical insights into how
lean manufacturing and factory digitalisation affect the operational performance of manufacturing
firms. In light of the upcoming fourth industrial revolution, these findings suggest that lean manu-
facturing is not obsolete but rather is more important than ever in order to reap the benefits from
emerging technologies and translate them into improved operational performance.

1. Introduction
and software, have enabled a potential revolution in the
Today’s market is characterised by shorter product life manufacturing industry, commonly known as Industry
cycles and the increasing individualisation of products. 4.0 (Kang et al. 2016). The Industry 4.0 vision refers to
Together with increasing global competition, this puts networks of autonomous manufacturing resources that
pressure both on manufacturing companies’ flexibility are sensor-equipped and self-configuring and is enabled
and on resource efficiency to meet customer demand and by the integration of a large number of different digi-
stay competitive (Lasi et al. 2014). To meet these chal- tal technologies (Kagermann et al. 2013). In general, this
lenges, manufacturing companies are forced to continu- increased use of digital data and digital technologies is
ously seek new approaches to improve their operational typically referred to as digitalisation (Buer, Fragapane,
performance. Lean manufacturing has in the last two and Strandhagen 2018).
decades arguably been the most prominent methodology The origins of lean manufacturing can be traced back
for improving the operational performance in manu- to 1948 (Holweg 2007), and lean manufacturing in its
facturing companies (Holweg 2007; Found and Bicheno purest form works completely independent of any kind
2016). Built on the simple idea of eliminating waste in of IT. The opinion that IT and lean manufacturing are
all forms by focusing on the activities that create value incompatible has been prevalent in both academia and
for the customer (Womack and Jones 1996), it is a low- industry for a long time (Pinho and Mendes 2017).
tech continuous improvement approach that focuses on This notion can be traced back to the reflections by
employee empowerment and the streamlining of man- Sugimori et al. (1977), who claimed that using com-
ufacturing activities. Recently, the technology-oriented puterised systems for material planning increases cost,
Industry 4.0 concept is being branded as the next enabler reduces transparency, and leads to overproduction of
of performance improvement. The rapid advances in goods. Lean manufacturing utilises decentralised con-
information technology (IT), related to both hardware trol by giving local autonomy to the employees and

CONTACT Sven-Vegard Buer [email protected]

© 2020 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use,
distribution, and reproduction in any medium, provided the original work is properly cited.
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 1977

emphasises simplicity and transparency. In a lean manu- study investigating the interaction between lean man-
facturing system, any problems should be handled imme- ufacturing and technology in a varied context, both in
diately, preferably by taking care of the root cause of terms of industry characteristics and company size.
the problem (Åhlström, Kosuge, and Mähring 2016). In Motivated by the disagreements in literature and the
contrast, IT focuses on creating a centralised database scarcity of studies investigating this issue in the context
and ‘a single version of the truth,’ which creates a dis- of a developed country, this paper seeks to investigate
connect between the reality on the shop floor and the and clarify how lean manufacturing and factory digital-
abstract information generated by the IT system. The isation interact, and which impacts these two domains
advanced algorithms found in the IT systems can reduce have on operational performance. Unlike previous stud-
the perceived simplicity of a process and reduce the trans- ies, we extend this study to further investigate whether
parency of decision-making. This increased complexity lean manufacturing and factory digitalisation can be con-
and reduced transparency can create distance between sidered as complementary resources. This paper draws
the decision-maker and the decision-making process. on existing literature to develop and validate a research
Furthermore, IT systems are rigid, complex, and diffi- model through a cross-sectional survey of Norwegian
cult to change and continuously improve, thus encour- manufacturing companies. To the best of our knowl-
aging workarounds instead of handling the root cause edge, this is one of the first studies to investigate these
of problems (Åhlström, Kosuge, and Mähring 2016). issues, especially in the context of a developed country.
Although lean manufacturing and Industry 4.0 share the By assessing the complementarity between lean manu-
same objective of improved performance, these underly- facturing and factory digitalisation, this study thus shows
ing contradictory aspects might complicate a concurrent that digital technologies can facilitate the operational per-
use. formance benefits of lean manufacturing systems, and, at
On the other hand, others advocate that technol- the same time, lean manufacturing systems can promote
ogy can be integrated into a lean manufacturing system the success of digital technologies. These findings present
as long as it supports lean principles and adds value important contributions to theory aimed at addressing
to the process. The introduction of cyber-physical sys- the research gaps outlined above. Furthermore, this study
tems (CPS) and the Internet of Things (IoT) enable dis- presents valuable managerial insights by indicating how
tributed computing and autonomy not typically found managers should approach the fourth industrial revolu-
in traditional centralised IT systems (Buer, Strandhagen, tion, and which role existing lean manufacturing systems
and Chan 2018; Ghobakhloo 2020). Does this suggest will play in this transition.
that Industry 4.0 should be seen as a complementary This paper is structured as follows: Section 2 intro-
approach that can support and address limitations in duces relevant literature and develops the research
existing lean manufacturing systems? hypothesis. Section 3 describes the research method
Currently, there exists only scattered, non-conclusive utilised in this paper, while Section 4 presents and dis-
research on the relationship between Industry 4.0 and cusses the research findings. Finally, Section 5 concludes
lean manufacturing. There is especially a lack of empir- the paper and highlights its contributions.
ical studies investigating the performance implications
of an Industry 4.0 and lean manufacturing integration
(Buer, Strandhagen, and Chan 2018). Although some
studies recently have studied the performance implica- 2. Theoretical background and hypothesis
tions of such an integration, there are disagreements development
in the literature regarding how lean manufacturing and
2.1. Lean manufacturing and operational
Industry 4.0 interact to impact performance. Some stud-
performance
ies suggest that lean manufacturing is a mediator of
the relationship between the implementation of Industry Lean manufacturing aims at reducing waste and non-
4.0 and performance (e.g. Tortorella et al. 2018; Kam- value-added activities (Womack, Jones, and Roos 1990).
ble, Gunasekaran, and Dhone 2020). Another study sug- Internally, in production, this is manifested through,
gests that Industry 4.0 is a moderator of the relation- among other things, streamlined, stable, and standard-
ship between lean manufacturing and operational per- ised processes; minimal inventories; the one-piece flow
formance (Tortorella, Giglio, and van Dun 2019), while of products; production based on actual downstream
other studies investigate their supportive effects without demand; short setup times; and employees being involved
hypothesising which of the two is the moderator (e.g. Tor- in continuous improvement efforts (Chavez et al. 2015).
torella and Fettermann 2018; Rossini et al. 2019). Pinho All these aspects can support improvements in different
and Mendes (2017) further emphasised the value of a dimensions of operational performance, such as product
1978 S.-V. BUER ET AL.

quality and production cost, lead time, flexibility, and environment is created by utilising a large number of
reliability (Marodin and Saurin 2013). emerging, digital technologies.
Since lean manufacturing was popularised and became Industry 4.0 is a general term, encompassing an
a mainstream management approach, there have been increasing number of different technologies. While it is
numerous studies aiming at measuring the actual effect of challenging to scope a ‘moving target’ such as Industry
lean manufacturing on operational performance (Ciano 4.0, this paper mainly focuses on the part of Industry 4.0
et al. 2019). Krafcik (1988) coined the term lean and we refer to as factory digitalisation. In many ways, digi-
presented one of the first studies to compare lean man- talisation is a broader term than Industry 4.0 since it has
ufacturers with typical mass-production manufacturers. impacted and will continue to impact the whole society
Mackelprang and Nair (2010) did a meta-analysis of for years. In the widest sense, digitalisation of production
25 articles investigating the relationship between lean can be defined as ‘the use of digital data and technology
manufacturing practices and performance. While the to automate data handling and optimise processes’ (Buer,
operationalisation of lean manufacturing practices and Fragapane, and Strandhagen 2018, 1036). It is especially
operational performance tends to vary between studies, related to autonomous data collection and analysis, as
the consensus is that the adoption of lean manufactur- well as interconnectivity between products, processes,
ing is positively associated with operational performance and people (Buer, Strandhagen, and Chan 2018; Sjøbakk
improvement (Mackelprang and Nair 2010; Marodin and 2018). While Industry 4.0 can be described as a vision
Saurin 2013). of how manufacturing will be done in the future, fac-
tory digitalisation is seen as a key enabler of getting
there (Pfohl, Yahsi, and Kurnaz 2017). Factory digitalisa-
2.2. Digitalisation of manufacturing and
tion refers to the digitalisation of the production process,
operational performance
through, for example, the use of digital sensors and IoT
The increased digitalisation of manufacturing operations technology. Together with the use of advanced enterprise
is expected to cause disruptive changes in industrial man- software, it can enable a real-time view of the produc-
ufacturing. It can enable new and more efficient processes tion process (Kagermann et al. 2013). The integration of
and new products and services (OECD 2017), and it the vertical value chain, that is, from product develop-
is expected to lead to significant changes in organisa- ment to production, as well as fully integrated planning,
tional structures, business models, supply chains, and from sales forecasting to production, are other aspects
the manufacturing environment (Kagermann et al. 2013; that characterise a digitalised factory (Kagermann et al.
Lasi et al. 2014; Hahn 2020). Emerging digital technolo- 2013). One of the arguments for focusing on factory dig-
gies will provide disruptive changes to the technologies italisation instead of the full-scale Industry 4.0 vision is
we know today and will especially improve the integra- because most manufacturing companies are still in the
tion between the different systems (Liao et al. 2017; Xu, early stages regarding the implementation of Industry 4.0
Xu, and Li 2018; Winkelhaus and Grosse 2020). Today, technologies, and are thus at a more basic level of IT usage
the vision of a fourth industrial revolution is emerging, than we typically associate with Industry 4.0 (Bley, Leyh,
popularly known as Industry 4.0 (Lasi et al. 2014). Indus- and Schäffer 2016; Van den Bossche et al. 2016; Moeuf
try 4.0 started as a German government programme et al. 2018).
to increase the competitiveness of their manufacturing Early research on the use of IT in organisations
industry (Kagermann et al. 2013). However, with time, showed what we now know as the productivity para-
the term Industry 4.0 has evolved into an overall label dox (Brynjolfsson 1993). This paradox highlights the
for describing the next era of manufacturing, and in this apparent lack of a relationship between IT investments
process, it has become a poorly defined buzzword for the and productivity gains. IT requires large investments in
future of production. Even though Industry 4.0 has been hardware, infrastructure, and software. Standard pack-
one of the most frequently discussed topics among prac- ages from software vendors typically do not fit the
titioners and academics in the last few years, no clear complex characteristics of different production environ-
definition of the concept has been established; therefore, ments, necessitating alterations to the software or the
no generally accepted understanding of Industry 4.0 has production process itself. All these are aspects that imply
yet been published (Hofmann and Rüsch 2017; Moeuf that succeeding with IT investments is not a straightfor-
et al. 2018). Today, Industry 4.0 can be described as an ward task, requiring extensive and careful planning.
umbrella term, referring to a range of current concepts However, with time, the productivity paradox faded
and touching several disciplines within industry (Lasi away, and Bharadwaj (2000) found a positive associa-
et al. 2014). It can be broadly defined as a vision for the tion between IT capability and firm performance. Later,
future of manufacturing where a smart manufacturing McAfee (2002) found that the implementation of an
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 1979

enterprise resource planning (ERP) system had posi- than ever as a framework for the successful deployment
tive effects on operational performance. Raymond and of emerging technologies into manufacturing?
St-Pierre (2005) found that the use of advanced manu- Since research on this relationship accelerated in 2016,
facturing systems was significantly associated with both studies have moved slowly from purely conceptual stud-
operational and business performance. Similarly, Khan- ies towards more empirical-based studies (Buer, Strand-
chanapong et al. (2014) found a positive association hagen, and Chan 2018). Discussing this interaction on a
between the use of manufacturing technologies and cost, conceptual level, Sanders et al. (2017) argue that the con-
quality, lead time, and flexibility performance. cept of lean manufacturing will not fade away but rather
Moeuf et al. (2018) reviewed different cases from the will become more important for a successful Industry
literature reporting on Industry 4.0 pilot projects and 4.0 implementation. They claim that most lean man-
found that the most commonly reported performance ufacturing tools will benefit from the introduction of
benefits were increased flexibility, improved productivity Industry 4.0, while some lean manufacturing tools can
and quality, and reduced cost and delivery time. Using also be facilitators or even prerequisites for a move
secondary data from a survey of the Brazilian industry, towards Industry 4.0. They especially highlight total pro-
Dalenogare et al. (2018) investigated the effects of some ductive maintenance (TPM), Kanban, production smooth-
of the emerging technologies typically associated with ing, autonomation, and waste elimination as aspects of
Industry 4.0. They found that the following technology lean manufacturing that will benefit from introducing
groups had a positive association with operational perfor- digital technologies. Furthermore, they suggest that real-
mance: computer-aided design with computer-aided man- time capability, decentralisation, and interoperability are
ufacturing, digital automation with sensors, and big data. the aspects of the Industry 4.0 vision that will offer the
In contrast, the group additive manufacturing had a nega- most support to lean manufacturing. Kolberg, Knobloch,
tive association with operational performance. As shown, and Zühlke (2017) present some practical cases of how
numerous earlier studies have investigated the effects of CPS can be used for continuous improvement, as well
lean manufacturing and technologies on performance as showing how it can enhance the lean manufacturing
separately. However, the main objective of this study is tools Kanban and Andon. Similar studies evaluating the
to investigate how they interact to impact operational potential interfaces between Industry 4.0 technologies
performance. and lean manufacturing practices are now being pub-
lished regularly (e.g. Rosin et al. 2019; Tortorella et al.
2020).
Recently, empirical-based studies investigating the
2.3. The interaction between lean manufacturing
performance impact of the concurrent use of lean man-
and digitalisation
ufacturing and Industry 4.0 have started to emerge.
Although some skepticism has been raised regarding Through a survey of Indian manufacturing firms, Kam-
the compatibility of lean manufacturing and IT solu- ble, Gunasekaran, and Dhone (2020) found that the
tions in the past, more studies have recently focused on implementation of lean manufacturing practices has a
the benefits of combining these two domains (Riezebos, full mediating effect on the relationship between Industry
Klingenberg, and Hicks 2009; Pinho and Mendes 2017). 4.0 technologies and sustainable organisational perfor-
Lean manufacturing combined with ERP (Powell et al. mance. Their results indicate that Industry 4.0 technolo-
2013), MES (Cottyn et al. 2011), advanced manufactur- gies in itself do not contribute to improved performance,
ing technologies (AMTs) (Boyer et al. 1997), simulation but rather that these technologies are enablers of lean
(Goienetxea Uriarte, Ng, and Urenda Moris 2020), and manufacturing.
radio frequency identification (RFID) (Brintrup, Ranas- Through a survey of Brazilian manufacturers, Tor-
inghe, and McFarlane 2010) have been investigated in torella and Fettermann (2018) found indications that a
different studies and found to have operational benefits. concurrent implementation of lean manufacturing and
In light of the technological developments associated Industry 4.0 leads to larger performance improvements.
with Industry 4.0, the relationship between lean manu- Later, Rossini et al. (2019) conducted a study with a sim-
facturing and technology has again become an area of ilar research design in European manufacturers. Their
research interest (Buer, Strandhagen, and Chan 2018; findings suggest that manufacturers that aim to adopt
Gupta, Modgil, and Gunasekaran 2020; Núñez-Merino Industry 4.0 should concurrently implement lean man-
et al. 2020). Do emerging digital technologies, increased ufacturing as a way to support process improvements.
automation levels, and less dependence on human labour However, when investigating this relationship, neither of
mean that lean manufacturing will now become obsolete? these studies used control variables to control for system-
Alternatively, will lean manufacturing be more important atic biasing effects, which could impact the validity of the
1980 S.-V. BUER ET AL.

results. In another study of Brazilian manufacturers, Tor- Table 1. Demographics of the final sample (n = 75)
torella, Giglio, and van Dun (2019) investigated the mod- Sample (%)
erating effect of some Industry 4.0 technology groups Industrial sector Machinery 18.7%
on the relationship between certain aspects of lean man- Chemical 16.0%
Fabricated metal products 12.0%
ufacturing and operational performance. Their results Food & beverage 9.3%
indicated that product and service-related technologies Electronics 9.3%
positively moderated the relationship between continu- Furniture 6.7%
Fabricated wood products 6.7%
ous flow and operational performance, while process- Shipyard 6.7%
related technologies negatively moderated the relation- Automotive 5.3%
Other 9.3%
ship between setup time reduction and operational per- Respondent’s profile Production manager 29.3%
formance. However, the design of the study did not con- CEO 20.0%
CTO 10.7%
trol for factors such as production repetitiveness or length Improvement manager 10.7%
of the lean manufacturing programme, which might have Supply chain manager 9.3%
influenced the results. Furthermore, as pointed out by the Project manager 5.3%
Other 14.7%
authors, socio-economic factors might also have influ- Production repetitiveness Highly non-repetitive 33.3%
enced the results. Non-repetitive 21.3%
Repetitive 26.7%
As shown, earlier studies are not unanimous regarding Highly repetitive 18.7%
the nature of the relationship between lean manufactur- Company size Small enterprise 12.0%
Medium-sized enterprise 36.0%
ing and emerging digital technologies and their com- Large enterprise 52.0%
bined effect on performance. Furthermore, Ghobakhloo Length of lean implementation No lean programme 12.0%
and Hong (2014) pointed out that the dynamic nature < 1 year 12.0%
1–5 years 34.7%
of IT, with its rapid developments, necessitates updated > 5 years 41.3%
studies investigating and clarifying its relationship with
lean manufacturing. This study further investigates the
interaction between lean manufacturing and factory dig- 35.4%. This sample size is comparable to earlier, simi-
italisation and its relationship with operational perfor- lar studies (e.g. Tortorella and Fettermann 2018; Kam-
mance. We hypothesise that these are complementary ble, Gunasekaran, and Dhone 2020), but is conducted in
approaches and propose the following hypothesis: Norway which is a small country with a corresponding
small manufacturing base (Norwegian Ministry of Trade‘
Hypothesis: Lean manufacturing and factory digitalisa-
tion are complementary resources that produce synergis- Industry and Fisheries 2017). The survey was sent to a
tic effects on operational performance. management representative in the company — typically
the chief executive officer (CEO), chief technology offi-
cer (CTO), production manager, or someone in a similar
3. Research method position. They were asked to assess the factory in which
they are working, and these employees were assumed to
3.1. Sampling
have the required knowledge themselves or the ability
The empirical data used in this study were collected to seek answers from other company representatives to
through a survey distributed to Norwegian manufactur- answer the questions in all the categories reliably. Table 1
ers. The initial sample consisted of all the manufacturing shows the demographics of the sample.
companies which were on the mailing list of a knowledge-
sharing platform for manufacturing logistics. This initial
3.2. Operationalisation of constructs
sample consisted of 212 Norwegian manufacturing com-
panies, representing a wide range of sectors and company 3.2.1. Predictor variables
sizes. To the best of our knowledge, the initial sample Because of the ambiguity surrounding the concept of
reflects the Norwegian industry with a relatively high lean manufacturing, Mackelprang and Nair (2010) sug-
proportion of project-based manufacturing (Norwegian gest using multi-item scales to survey lean manufacturing
Ministry of Trade’ Industry and Fisheries 2017). The link practices. In this study, the operationalisation of lean
to the survey was distributed through e-mail, and a total manufacturing is based on the work of Shah and Ward
of 76 responses were collected through an online sur- (2007). This operationalisation is well proven and has
vey tool. Of these, one of the returned responses lacked been used in numerous other studies, either directly or
answers for several questions and was therefore removed in an adapted form (e.g. Azadegan et al. 2013; Godinho
from the final sample. This study thus ended up with Filho, Ganga, and Gunasekaran 2016; Tortorella and Fet-
a final sample of 75 respondents and a response rate of termann 2018). This study focuses on the aspects of lean
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 1981

manufacturing that are related to the internal manufac- studies in the past (e.g. Prajogo and Olhager 2012; Zelbst
turing process, known as internal lean practices (ILPs). et al. 2014; Chavez et al. 2015). The operationalisation
The six ILPs defined by Shah and Ward (2007) are pull of lean manufacturing, factory digitalisation, and opera-
production, continuous flow, setup time reduction, statisti- tional performance can be found in the Appendix (Table
cal process control (SPC), TPM, and employee involvement. A1 and Table A2).
Although individual ILPs may be used in isolation for
performance improvements, the true power of lean man- 3.2.3. Control variables
ufacturing comes when the practices are implemented To control for systematic biasing effects (Ketokivi and
together and support each other (Shah and Ward 2003). Schroeder 2004), we decided to include three control
This operationalisation consists of 24 measures in which variables in the regression. Previous research has shown
five-point Likert scales were used to assess the degree of that several environmental factors can influence the
implementation, ranging from 1 — no implementation to applicability and performance benefit of lean manufac-
5 — complete implementation. Based on this, we created turing and digitalisation. This includes the repetitive-
six summated scales corresponding to the six mentioned ness of the production environment (White and Pryb-
ILPs. The overall lean manufacturing score is the average utok 2001; Shah and Ward 2003; Khanchanapong et al.
of the six individual ILPs. 2014), company size (White, Pearson, and Wilson 1999;
Regarding Industry 4.0 and digitalisation, established Shah and Ward 2003; Khanchanapong et al. 2014; Som-
measurement scales are scarce. Within this topic, there mer 2015), and the length of lean implementation (Agus
is still some confusion surrounding the domain, both and Iteng 2013; Wickramasinghe and Wickramasinghe
in content and semantics (Buer, Fragapane, and Strand- 2017; Tortorella and Fettermann 2018). To determine
hagen 2018; Moeuf et al. 2018). The ‘Industry 4.0 Self- their degree of production repetitiveness, the respon-
Assessment’ model (Geissbauer, Schrauf, and Hentrich dents were supplied with the descriptions of four dif-
2015) presents a wide range of assessments in six dif- ferent types of production environments presented in
ferent dimensions, some of which are highly relevant to Jonsson and Mattsson (2003). These four alternatives
the scope of this study. It provides detailed explanations were then coded into a four-point scale consisting of
on each question and presents illustrating examples. As 1) highly non-repetitive production, 2) non-repetitive pro-
this study focuses on the digitalisation of production, duction, 3) repetitive production, and 4) highly repetitive
which includes the digitisation, integration, and automa- production. Following the definitions from the European
tion of data flows, this model was used as a foundation Commission (2003), companies were ranked as either
for the survey instrument. Questions were extracted from a 1) small-sized enterprise (i.e. < 50 employees and ≤
this measurement instrument based on their relevance to e10M in turnover), 2) medium-sized enterprise (i.e. <
internal factory digitalisation. In total, six measures were 250 employees and ≤ e50M in turnover), or 3) large
used, in which companies were asked to rate their digital- enterprise (i.e. either ≥ 250 employees or > e50M in
isation degree on a five-point Likert scale. Because these turnover). To measure the length of lean implementa-
are emerging technologies, and are not necessarily eas- tion, respondents were asked to state the time since they
ily comprehensible, extended explanations were supplied started a formal lean programme. This was measured on
along with each question. The factory digitalisation score a four-point scale: 1) No formal lean program, 2) < 1 year,
was calculated as the average of the responses to these six 3) 1–5 years, or 4) > 5 years. The research framework for
questions. this study is illustrated in Figure 1.

3.2.2. Dependent variable

3.3. Scale validity and reliability
As suggested by Slack, Chambers, and Johnston (2010),
the measure for operational performance in this study The survey instrument was validated by investigating
comprised five key performance dimensions: speed, qual- three aspects: content validity, construct validity, and
ity, flexibility, dependability, and cost. This was operat- reliability. To ensure content validity, a draft question-
ionalised into the operational performance indicators naire was pre-tested by two independent academics
production lead time, product quality, process flexibility, with experience in both research projects and indus-
process uptime, and production cost per unit. To assess try. Additionally, the questionnaire was based on well-
their level of operational performance, the companies tested and recognised items that have been used suc-
were asked to rate their performance as compared to cessfully in other studies. To assess the construct valid-
their direct competitors. This was rated on a five-point ity, we considered two aspects: convergent validity and
Likert scale from 1 — much worse to 5 — much bet- discriminant validity (Forza 2002). To assess convergent
ter. This approach has been widely applied in similar validity, we first investigated the unidimensionality of
1982 S.-V. BUER ET AL.

Figure 1. Research framework

Table 2. The means, SDs, and bivariate correlations

Correlations
Mean SD 1 2 3 4 5
1. Production repetitiveness 2.31 1.13 –
2. Company size 2.40 0.70 0.048 –
3. Length of lean programme 3.05 1.01 0.045 0.257* –
4. Lean manufacturing 3.02 0.67 0.253* 0.120 0.423*** –
5. Factory digitalisation 2.93 0.68 0.151 0.092 0.405*** 0.645*** –
6. Operational performance 3.43 0.48 0.045 0.031 0.080 0.422*** 0.420***
Notes: *p < 0.05; *** p < 0.001.

the measures through principal component analysis. Fol- be greater than the square of the construct’s bivariate
lowing the recommendations of Carmines and Zeller correlations (Table 2) with the other constructs. In all
(1979), the items for each of the constructs were analysed cases, this criterion was satisfied. Based on these tests,
separately. For all of the constructs, the Kaiser-Meyer- we assumed sufficient construct validity. To test relia-
Olkin measure of sampling adequacy was above the rec- bility, the Cronbach’s alpha coefficient was calculated
ommended limit of 0.5 and Bartlett’s test of sphericity for each of the summated scales. All the summated
returned p-values below 0.001. For each of the inde- scales have values above the recommended threshold
pendent constructs, the items loaded on a single factor, of 0.6 (Forza 2002) and, accordingly, should be reli-
the eigenvalue exceeded 1.0, the total variance explained able for further analysis. The results from the scale val-
exceeded 50%, and all the items’ factor loadings were idation can be found in the Appendix (Table A1 and
above 0.5, supporting unidimensionality. As additional Table A2).
tests of convergent validity, the average variance extracted To examine the possible non-response bias, we com-
(AVE) and composite reliability (CR) were calculated. pared the responses to the three control variables: pro-
The recommended thresholds for good convergent valid- duction repetitiveness, company size, and length of lean
ity for these two tests are AVE > 0.5 and CR > 0.7 implementation, as well as five random questionnaire
(Hair et al. 2010). For the independent variables, the items between the early and late respondents. The chi-
values are above the recommended variables. The depen- square tests for all eight indicated no statistically signif-
dent variable, operational performance, is composed of icant difference between the early and late respondents,
multiple, disparate performance dimensions. This means with a significance of 0.05. This indicates the absence of
that the loading factors and consequently, AVE and non-response bias (Khanchanapong et al. 2014; Chavez
CR will necessarily be somewhat lower for this con- et al. 2015).
struct, but still acceptable, as previously proposed by In order to control for common method bias, we
Prajogo and Olhager (2012). To assess discriminant valid- used a two-step approach. First, we designed the ques-
ity, we followed the recommendations of Fornell and tionnaire according to the guidelines of Podsakoff et al.
Larcker (1981). They recommend that to ensure dis- (2003). This included separating the dependent variables
criminant validity, the AVE for each construct should from the independent variables in the questionnaire
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 1983

and emphasising to the respondents that their responses Second, the length of the lean programme is sig-
would be kept anonymous. Furthermore, the question- nificantly positively associated with company size, sug-
naire was sent out to management representatives in gesting that larger manufacturing companies adopted
the companies, who are assumed to be appropriate key lean manufacturing practices earlier than did the smaller
informants. In addition to these preventive measures for manufacturers.
common method bias, the collected data were analysed Third, as expected, there is a significant correlation
using Harman’s single-factor test. This was done by load- between the lean manufacturing implementation level
ing all the independent and dependent variables into an and the length of the lean programme. Lean manu-
exploratory factor analysis. The test resulted in 9 com- facturing implementations take time and organisations
ponents with an eigenvalue exceeding 1 and a first factor need to devote time, effort, and resources. Organisations
that explained 32.3% of the variance, well below the rec- need time to, among others, increase the awareness of
ommended threshold of 50% (Podsakoff et al. 2003). lean, identify and mitigate implementation barriers and
Common method bias was therefore assumed not to be a adapt the organisational culture (Bhamu and Sangwan
threat in this study. 2014). Nevertheless, we do not see a significant corre-
lation between the length of the lean programme and
operational performance. Our findings suggest that the
4. Results and discussion implementation level of lean manufacturing practices is
a more significant predictor of operational performance
4.1. Descriptive statistics
than the length of the lean programme itself.
The means, standard deviations (SDs), and bivariate cor- Fourth, there is a significant, strong correlation
relations of the six mapped variables are presented in between lean manufacturing and factory digitalisation,
Table 2. A few key insights can be observed from the cor- as well as between the length of the lean programme
relation analysis. First, the implementation level of lean and factory digitalisation. This indicates that these two
manufacturing is positively correlated with the produc- domains tend to co-exist in manufacturing companies,
tion repetitiveness. This indicates that repetitive manu- challenging the idea that they are incompatible. Since the
facturing companies generally have a higher degree of reflections by Sugimori et al. (1977) surrounding the con-
lean implementation, which is similar to earlier findings current use of lean manufacturing and IT were made,
(e.g. White and Prybutok 2001). In contrast, it can be there have been substantial developments in terms of the
noted that there is no significant correlation between fac- capabilities, flexibility, and accessibility of IT systems, as
tory digitalisation and production repetitiveness. Earlier, well as in the competence of their users. These findings
Strandhagen et al. (2017) suggested that digital technolo- thus support some of the recent studies probing the com-
gies are more applicable in highly repetitive environ- patibility of lean manufacturing and digital technologies
ments due to these environments’ lower complexity and in manufacturing, such as that by von Haartman, Bengts-
higher standardisation of material flows, facility layout, son, and Niss (2016). Combining lean manufacturing
and product structures, which facilitate the sensoriza- and digital technologies can be an effective way to man-
tion of the production processes and, in turn, the col- age production, and weaknesses in one of the systems
lection of production data. However, at the same time, can be addressed by solutions from the other. In light
highly repetitive manufacturers (e.g. process manufac- of the increasing popularity surrounding digitalisation,
turers) tend to have been highly automated and inte- these findings indicate that it should not necessarily be
grated for some time already and might not necessarily the case that either factory digitalisation or lean manu-
be that interested in the latest developments branded as facturing is implemented but rather that these domains
digitalisation. Furthermore, they might not be as inter- work together.
ested in aspects such as ‘smart’ products, as they typ- Finally, we see that operational performance is sig-
ically produce commodity products where the product nificantly correlated with both lean manufacturing and
price is a significant order winner. Furthermore, non- factory digitalisation. This is as expected based on the
repetitive manufacturers are increasingly focusing on results of previous studies. In the next section, we will
the implementation of digital technologies, for instance, look further into these relationships.
Zennaro et al. (2019) pointed out that recent studies on
one-of-a-kind manufacturing have put a large empha-
4.2. The effects on operational performance
sis on integration tools and information sharing systems.
These factors might explain the lack of a significant cor- The effects of lean manufacturing and factory digitali-
relation between factory digitalisation and production sation were examined using hierarchical multiple regres-
repetitiveness. sion analysis. In total, three models were tested. Model 1
1984 S.-V. BUER ET AL.

Table 3. Results from the hierarchical multiple regressiona

Dependent variable: Operational performance
Model 1 Model 2 Model 3
Production repetitiveness (Control) 0.041 −0.074 −0.049
Company size (Control) 0.009 0.014 −0.033
Length of lean implementation (Control) 0.076 −0.176 −0.178
Lean manufacturing 0.326* 0.305*
Factory digitalisation 0.290* 0.235†
Lean manufacturing × factory digitalisation 0.247*
F-value 0.196 4.416** 4.750***
R2 0.008 0.242 0.295
Adj. R2 −0.034 0.188 0.233
Change in R2 0.234*** 0.053*
Notes: † < 0.10; *p < 0.05; **p < 0.01; *** p < 0.001; a Standardised regression coefficients are reported.

only looked at the effects of the control variables on the 2014). As suggested by Cohen et al. (2015), the high lev-
dependent variable (i.e. operational performance). Next, els were defined as being one SD above the mean, while
Model 2 added the direct effects of lean manufacturing the low levels were defined as being one SD below the
and factory digitalisation on the dependent variable. mean. After plotting the interactions, we conducted sim-
Finally, in Model 3, the interaction term (i.e. lean ple slope analyses to test whether the slopes of the simple
manufacturing × factory digitalisation) was added. The regressions lines differed significantly from zero (Aiken,
independent variables were mean-centred to avoid non- West, and Reno 1991). Testing the slopes in Figure 2,
essential multicollinearity (Cohen et al. 2015). The data factory digitalisation was shown to be significantly pos-
was verified to meet the assumptions regarding linearity, itively associated with operational performance when
homoscedasticity, the independence of error terms, nor- the lean manufacturing implementation level is high
mality of the residuals, and the multicollinearity required (β = 0.444, p = 0.005). However, when the lean manu-
for multiple regression analysis (Hair et al. 2010). facturing implementation level is low, no significant rela-
As shown in Table 3, Model 1 explains only a negligible tionship between factory digitalisation and operational
amount of the variance in the operational performance. performance is found (β = 0.025, p = 0.890). Similarly,
This suggests that neither production repetitiveness, when testing the slopes in Figure 3, we found that there
company size, nor the length of the lean programme is a significant positive relationship between lean man-
in itself contributes to competitive operational perfor- ufacturing and operational performance at high values
mance and that other factors are responsible for this vari- of factory digitalisation (β = 0.514, p = 0.002). For low
ance. Adding the two hypothesised predictors (Model 2) values of factory digitalisation, no significant relation-
and the interaction term (Model 3) produced signifi- ship between lean manufacturing and operational per-
cant improvements to the model (cf. the change in R2 ). formance was found (β = 0.095, p = 0.584). Overall,
Model 2 shows significant relationships between both the results indicate that factory digitalisation only has a
lean manufacturing and factory digitalisation and opera- significant positive impact on operational performance
tional performance. Furthermore, Model 3 shows a sig- when the implementation level of lean manufacturing
nificant interaction effect between lean manufacturing is also high, and vice versa. This suggests that high
and factory digitalisation. The presence of an interac- performers are concurrently using both lean manufactur-
tion effect suggests that the two independent variables ing and a digitalised factory.
produce a synergistic effect on the dependent variable The configurational theory proposes that different
(Jeffers, Muhanna, and Nault 2008). The inclusion of lean resources can either have an enhancing (or synergistic)
manufacturing and factory digitalisation, as well as their relationship, in which one resource magnifies the impact
interaction effect, resulted in a total change in R2 of 0.287 of another resource, or it can have a suppressing rela-
(i.e. the difference in R2 between Model 1 and Model 3), tionship, in which one resource diminishes the impact of
suggesting that these two domains explain 28.7% of the another (Jeffers, Muhanna, and Nault 2008). The signif-
variance in operational performance. icant, positive relationship between the interaction term
To allow for further interpretation, the interaction and operational performance suggests that the concur-
effect is plotted in Figures 2 and 3. Based on Model 3, rent use of lean manufacturing and factory digitalisation
this is done by generating a series of simple regression yields a synergistic effect on operational performance.
equations and then calculating the predicted values of This study shows that the improvements in operational
the dependent variable at high and low levels of the pre- performance when implementing either lean manufac-
dictor variables (Aiken, West, and Reno 1991; Dawson turing or digital technologies in isolation are relatively
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 1985

Figure 2. Illustration of the interaction effect between lean manufacturing and factory digitalisation with lean manufacturing as the
moderator

Figure 3. Illustration of the interaction effect between lean manufacturing and factory digitalisation with factory digitalisation as the
moderator

modest. The true operational performance advantage are fulfilled, and we propose that lean manufacturing
comes when both domains are implemented; in other and factory digitalisation are complementary resources,
words, their concurrent use produces a synergistic effect supporting the proposed hypothesis. In contrast to the
that is larger than the sum of their individual contribu- findings of Kamble, Gunasekaran, and Dhone (2020),
tions. which suggested that lean manufacturing has a full
Khanchanapong et al. (2014) suggest three require- mediating effect on the relationship between Industry
ments that characterise complementary resources: 4.0 and performance, our findings suggested that both
(1) complementary resources are not identical, (2) com- lean manufacturing and factory digitalisation individ-
plementary resources are positively correlated, and (3) ually contribute to operational performance. However,
complementary resources produce synergistic effects on the complementarity between the two domains suggests
performance that are greater than their individual effects that joint optimisation results in the largest performance
combined. Through the theory and findings presented benefits. The findings are in line with the previous find-
in this paper, we suggest that all three requirements ings of Tortorella and Fettermann (2018) and Rossini
1986 S.-V. BUER ET AL.

et al. (2019). However, this study extends the theoret- which stands for understand, simplify, and automate
ical model and looks further into the complementarity (Groover 2008). Further, lean thinking assists in high-
between lean manufacturing and factory digitalisation. lighting which activities that actually create value for the
The finding that lean manufacturing only has a sig- customer. Digitalisation efforts should reflect the require-
nificant impact on operational performance when the ments of the customer and should not just be done for the
level of factory digitalisation also is high might be sur- sake of it. By conducting a successful lean transformation
prising. This suggests that a basic lean manufacturing in the past, an organisation will have already established
system with no digital solutions does not provide any sig- a continuous improvement culture that actively drives
nificant competitive advantage in terms of operational change and will have embedded problem-solving struc-
performance. To understand this finding, we want to tures (Davies, Coole, and Smith 2017). These previous
look at it from the resource-based view perspective. The improvement efforts could also contribute to reducing
resource-based view argues that a firm can be seen as a employee resistance when management decides to imple-
bundle of resources (Wernerfelt 1984) and that strategic ment new technologies that may threaten their positions.
resources can potentially deliver a sustained competitive
advantage to a firm (Barney 1991). Resources are defined
as ‘all assets, capabilities, organisational processes, firm
5. Conclusions
attributes, information, knowledge, etc. controlled by a
firm that enable the firm to conceive of and implement The fourth industrial revolution promises to change the
strategies that improve its efficiency and effectiveness’ manufacturing landscape, and those who are not able to
(Barney 1991, 101). These resources and how they are reap the new technology-induced opportunities are des-
combined can be used to explain the differences in per- tined to fall behind their competitors. An important area
formance between different firms. The resource-based to investigate is the role lean manufacturing will play
view further suggests that individual resources (e.g. lean in this new industrial era. This study has surveyed the
manufacturing) may have a limited ability to create a use of a number of emerging digital technologies as well
competitive advantage in isolation, as it is easier for other as established lean manufacturing practices to investi-
companies to imitate (Barney 1995). That lean manufac- gate their relationship with operational performance in
turing systems create limited competitive advantage in manufacturing. This study identified a strong correlation
isolation has also been suggested previously by Khan- between users of digital technologies and lean manu-
chanapong et al. (2014). facturing practices, suggesting compatibility between the
Although this study confirms the complementarity two domains. Both factory digitalisation and lean man-
between lean manufacturing and factory digitalisation, it ufacturing practices were significant positive predictors
does not identify which domain should be implemented of the level of operational performance. Furthermore, it
first, or whether they should be implemented concur- was shown that their concurrent use yields even larger
rently. Several studies have proposed that a successful performance benefits, suggesting a synergistic relation-
lean manufacturing implementation should be consid- ship between the two domains regarding their impact on
ered a prerequisite for implementing digital technologies operational performance.
(von Haartman, Bengtsson, and Niss 2016; Klötzer and
Pflaum 2017; Buer, Strandhagen, and Chan 2018). Con-
trarily, we could not find any study that proposes the
5.1. Contributions to theory
opposite scenario: using a digitalised factory as a foun-
dation for a successful lean transformation. Proponents This study contributes to research on manufacturing
of the ‘lean first’ approach suggest that you should build improvement initiatives by investigating the influence of
your manufacturing digitalisation on a stable, standard- both lean manufacturing and factory digitalisation on
ised, and streamlined production system (Bortolotti and operational performance. This study aimed at covering
Romano 2012). Through what they call the integration the research gap regarding the interactive effects of lean
hypothesis, MacDuffie and Krafcik (1992) proposed that a manufacturing and digitalisation on operational perfor-
lean manufacturing system is a necessary prerequisite for mance previously pointed out by Buer, Strandhagen, and
effectively utilising high levels of automation. Having a Chan (2018), as well as addressing some of the limitations
streamlined production system is vital to avoid automat- in the earlier, similar studies.
ing wasteful activities, as this essentially amounts to Lean manufacturing has long been seen as the ‘go-to’
the automation of waste creation. Streamlined and stan- solution for improved operational performance and cre-
dardised processes also simplify the automation process. ating an improvement culture in the organisation. Rine-
This is in line with the ‘USA principle’ of automation, hart, Huxley, and Robertson (1997, 2) indeed proposed
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 1987

that lean manufacturing ‘will be the standard manu- 5.2. Managerial implications
facturing mode of the twenty-first century.’ The oper-
This study also has several managerial implications.
ational benefits of using lean manufacturing have been
First, it challenges the established opinion that lean
proved in numerous previous studies, and the results of
manufacturing and IT are incompatible. The findings
the current study support those findings. However, by
here actually show the opposite, that the two not only
simultaneously investigating the degree of factory digital-
co-exist but also mutually reinforce each other. Most
isation, the effect of lean manufacturing can be isolated.
companies embracing the lean paradigm also engage in
This, together with the use of three control variables,
digitalisation, and vice versa. The industry does not seem
further improves the accuracy of the proposed model.
to consider the two as mutually exclusive or contradic-
The findings from the regression model confirm that lean
tory. However, a certain share of companies does not
manufacturing is still a relevant source of competitive
seem to see the value of such improvement paradigms,
advantage. Although many of the ideas and methods in
possibly because of a lack of improvement initiatives
lean manufacturing can be traced far back, the focus on
more generally. As this study has shown, these compa-
creating value for the customer and eliminating waste
nies’ performance is inferior, and they thus risk losing
are ideas that will not become obsolete, regardless of the
their competitiveness in the long run. This provides valu-
technological advances that come about.
able managerial insights and should be used as a support
While there have been numerous studies on the effects
in developing roadmaps for production improvement
of lean manufacturing on operational performance, stud-
initiatives.
ies investigating the effects of digitalisation on opera-
To achieve the greatest performance benefits, lean
tional performance are scarcer. This is especially true
manufacturing and digital technologies should be used
when it comes to studies surveying the use of emerg-
concurrently. For managers who already have a devel-
ing technologies such as IoT and CPS. Contributing to
oped lean manufacturing system in place, this provides
the knowledge in this area, the regression analysis con-
valuable insights. We have recently seen examples where
firmed a significant positive relationship between factory
companies have cancelled their lean manufacturing pro-
digitalisation and operational performance. This study
grammes in order to put all their attention into pur-
thus provides evidence that suggests that new, emerging
suing opportunities from emerging digital technologies.
technologies support operational performance improve-
Based on our findings, we strongly recommend against
ments and that smart and integrated production pro-
this approach. The existing lean manufacturing system
cesses provide a source of competitive advantage.
should not be neglected but should rather be used as a
Most importantly, this study provides insight and
basis for deploying new technologies into the manufac-
extends the knowledge regarding the relationship
turing system. For managers who have not yet looked into
between lean manufacturing and factory digitalisation
lean manufacturing, this study shows why it can be a good
and how they together impact operational performance.
idea to supplement factory digitalisation efforts with a
We extend earlier studies that have been conducted in
lean manufacturing system. In an increasingly compet-
the context of developing countries and present one of
itive manufacturing sector, these findings provide valu-
the first studies to investigate this in the context of a
able managerial insights, as being able to develop produc-
developed country. We also extend the research mod-
tion systems tailored to and reflecting the requirements
els used in earlier studies by including additional con-
of each unique production environment is an important
trol variables to make the results more conclusive and
competitive advantage.
increase its generalisability. Different from earlier studies,
That these two domains seem to be so depen-
our findings show that lean manufacturing and factory
dent on each other to create a competitive advantage
digitalisation meet the criteria to be considered comple-
presents some interesting implications. Earlier research
mentary resources. This indicates that both lean manu-
has emphasised that IT resources create limited value on
facturing and factory digitalisation have a limited abil-
their own and should be used to support and enhance
ity to generate competitive advantage in isolation. The
organisational capabilities and business processes (Liang,
true competitive advantage becomes evident when both
You, and Liu 2010). As the companies we surveyed were
domains are highly implemented and can work together
asked to evaluate themselves in comparison to their com-
to improve the firm’s operational performance. These
petitors, our findings suggest that to achieve superior
insights should be used when developing roadmaps for
operational performance today, integration of these two
achieving world-class operational performance in manu-
domains is essential. A basic lean manufacturing system
facturing companies.
1988 S.-V. BUER ET AL.

with no digital solutions no longer provides any signifi- Although we expect these results to hold for manufac-
cant operational performance advantage. Similarly, dig- turers in general, we cannot claim that this is the case.
italising manufacturing operations that are not aligned Furthermore, although the respondents were guaranteed
with lean thinking and fail to recognise the impor- anonymity, there might be a social desirability bias in
tance of lean principles and practices is also of limited their responses, in which they assess their implemen-
value. The ability to introduce emerging digital tech- tation level and operational performance to be higher
nologies and align them with well-proven lean princi- than they actually are. However, as the respondents were
ples is evidently an important contributor to operational promised anonymity and would not gain anything from
performance. making their responses seem more positive than was
Although there is a lack of implementation frame- really the case, we expect that this is not a major concern
works for integrating lean manufacturing and digitali- in this study. Although the multicollinearity is below the
sation available in the literature (Buer, Strandhagen, and recommended levels proposed, for example, by Hair et al.
Chan 2018), a few managerial recommendations can be (2010) and Cohen et al. (2015), the high degree of corre-
posted. Earlier studies have proposed that lean manufac- lation between lean manufacturing and factory digitalisa-
turing systems remain an excellent foundation that can tion might, to some degree, have reduced, the overall R2
be used as a basis for deploying emerging digital tech- of the regression model, confounded the estimation, and
nologies into a manufacturing system. Moving toward reduced the significance of the regression coefficients.
the Industry 4.0 vision should be seen as a stepwise Moreover, although the current sample size did not
process where different prerequisites should be in place. allow for it, structural equation modelling might further
Klötzer and Pflaum (2017) argued that lean manufactur- have increased the significance of the proposed regres-
ing remains the basic prerequisite for the digitalisation sion model. Regarding the scope, this study focused
of manufacturing. Bosch (2018) summarised the process on the internal aspects of lean manufacturing and dig-
of moving toward Industry 4.0 in three steps: First, a ital technologies. Other aspects that were not investi-
streamlined process as a result of a lean transformation; gated in this study most likely also influence operational
second, an enabled factory with the required IT archi- performance and could be an area for future research.
tecture; and third, a connected factory taking advantage Last, it is important to emphasize that while the find-
of the latest technological advancements, such as cloud ings in this paper prove significant relationships between
computing, CPS, and the IoT. the studied variables, this does not necessarily imply
While lean manufacturing probably already has causality.
passed its hype peak, the hype surrounding digital tech- Future research should continue to investigate how
nologies might continue to grow. Amara’s law states technology affects lean organisations and how lean
that ‘we tend to overestimate the effect of a technol- implementation frameworks are affected. While this
ogy in the short run and underestimate the effect in study looked at lean manufacturing and factory digitali-
the long run’ (Ratcliffe 2018). This observation might sation as overall concepts, further insight might be
also be accurate for improvement programmes and might obtained through a study of the relationships between
explain why some manufacturing and consultancy firms individual lean manufacturing practices and individ-
are exchanging their lean implementation programmes ual technologies. Finally, while this study confirmed the
for digitalisation programmes. We want to reiterate that complementarity of lean manufacturing and factory dig-
manufacturing companies who are yet to implement lean italisation, future research should investigate how these
manufacturing should carefully consider whether mov- domains should be combined in practice.
ing toward Industry 4.0 should be their next step. Our
findings indicate that a digitalised manufacturing system
without complementary lean manufacturing practices Acknowledgements
experiences only minor improvements in operational The authors would like to thank the respondents who shared
performance. their time and responded to the survey. We would also like to
thank William Wehler Knudtzon, a master’s student at NTNU,
for assisting in the administration of the survey. Finally, we are
5.3. Limitations and future research grateful for comments from the anonymous reviewers at IJPR
who helped improve this paper.
There are a few limitations to this research that should
be noted, as well as some directions for future research.
Regarding survey-based research, several limitations are
well known. One limitation is the sample population, Disclosure statement
which was composed solely of Norwegian manufacturers. No potential conflict of interest was reported by the author(s).
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 1989

ORCID Agenda.” International Journal of Production Research 56 (8):

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Appendix

Table A1. Scale validity and reliability for the questionnaire items related to lean manufacturing
Factor Factor
Items loading loading
Lean manufacturing Pull production Production is ‘pulled’ by the shipment of finished goods 0.851 0.685
AVE = 0.553; AVE = 0.644; Production at stations is ‘pulled’ by the current demand of the next station 0.861
CR = 0.880; CR = 0.876; We use a ‘pull’ production system 0.879
Cronbach’s α = 0.835 Cronbach’s α = 0.807 We use Kanban, squares, or containers of signals for production control 0.582
Continuous flow Products are classified into groups with similar processing requirements 0.844 0.609
AVE = 0.638; Products are classified into groups with similar routing requirements 0.824
CR = 0.875; Equipment is grouped to produce a continuous flow of families of products 0.817
Cronbach’s α = 0.809 Families of products determine our factory layout 0.701
Setup time reduction Our employees practice setups to reduce the time required 0.919 0.801
AVE = 0.776; We are working to lower setup times in our plant 0.915
CR = 0.912; We have low setup times for equipment in our plant 0.803
Cronbach’s α = 0.855
Statistical process A large number of equipment/processes on shop floor are currently under 0.869 0.798
control (SPC) SPC
AVE = 0.668; We extensively use statistical techniques to reduce process variance 0.924
CR = 0.909; Charts showing defect rates are used as tools on the shop floor 0.839
Cronbach’s α = 0.873 We use fishbone diagrams to identify the causes of quality problems 0.741
We conduct process capability studies before product launches 0.693
Total productive We dedicate a portion of every day to planned equipment 0.802 0.789
maintenance (TPM) maintenance–related activities
AVE = 0.673; We maintain all our equipment regularly 0.790
CR = 0.892; We maintain excellent records of all equipment maintenance–related 0.856
Cronbach’s α = 0.837 activities
We post equipment maintenance records on the shop floor for active 0.832
sharing with employees
Employee involvement Shop floor employees are key to problem-solving teams 0.726 0.761
AVE = 0.596; Shop floor employees drive suggestion programmes 0.806
CR = 0.854; Shop floor employees lead product/process improvement efforts 0.862
Cronbach’s α = 0.773 Shop floor employees undergo cross-functional training 0.682

Table A2. Scale validity and reliability for the questionnaire items related to factory digitalisation and operational performance
Factor
Items loading
Factory digitalisation Digitalisation of the To what extent does your IT architecture (hardware) address the overall 0.790
AVE = 0.501; production process requirements of digitalisation and Industry 4.0?
CR = 0.857; How advanced is the digitalisation of your production equipment 0.626
Cronbach’s α = 0.793 (sensors, Internet of Things [IoT] connection, digital monitoring,
control, optimisation, and automation)?
Real-time capability To what extent do you have a real-time view of your production and 0.692
can dynamically react to changes in demand?
To what extent do you use a manufacturing execution system (MES) or 0.699
similar to control your manufacturing process?
Vertical and horizontal How would you rate the degree of digitalisation of your vertical value 0.737
integration chain (from product development to production)?
To what degree do you have an end-to-end information technology 0.692
(IT)–enabled planning and control process from sales forecasting,
over production to warehouse planning and logistics?
Operational performance Throughput time 0.657
AVE = 0.411; Product quality 0.356
CR = 0.767; Process flexibility 0.568
Cronbach’s α = 0.629 Process uptime 0.790
Production cost per unit 0.742