Journal of Manufacturing Technology Management

Supply chain performance: how lean practices efficiently drive improvements

Guilherme Luz Tortorella, Ricardo Giglio, Jorge Limon-Romero,
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Supply chain
Supply chain performance: performance
how lean practices efficiently
drive improvements
Guilherme Luz Tortorella 829
Department of Systems and Production Engineering,
Received 25 September 2017
Universidade Federal de Santa Catarina, Florianópolis, Brazil Revised 10 January 2018
Ricardo Giglio Accepted 19 February 2018

Universidade Federal de Santa Catarina, Florianópolis, Brazil, and

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Jorge Limon-Romero
Universidad Autónoma de Baja California, Ensenada, México

Abstract
Purpose – The purpose of this paper aims at investigating which lean supply chain management (LSCM)
practices efficiently improve the supply chain performance.
Design/methodology/approach – To achieve that, a cross-sectional survey was carried out with 113
manufacturing companies undergoing a lean implementation. The proposed method combines
complementary methods of multivariate data analysis in order to determine which bundles of LSCM
practices more efficiently entail improvements on supply chain performance.
Findings – The findings justify why some LSCM initiatives may find larger barriers than others, compromising
their success due to misguided implementation efforts according to the desired performance improvement.
Originality/value – The empirical examination on the efficiency of LSCM practices with regards to a certain
set of performance indicators provides guidelines with respect to LSCM implementation depending on which
performance indicators are envisioned for improvement.
Keywords Performance, Supply chain management, Lean manufacturing, Efficiency
Paper type Research paper

1. Introduction
A supply chain comprises all activities related to flow and transformation of products,
services and information, starting from raw materials to the end user (Ballou, 2009).
Hence, an appropriate supply chain management (SCM) is essential for companies
impacting their operational performance in terms of inventory and costs reduction,
increased customer satisfaction and processes efficiency, higher quality and improved
delivery service level (Christopher and Towill, 2001; Ugochukwu et al., 2012). SCM implies a
management change from exclusive improvement efforts oriented to internal problems to
focus on the relationships with the other companies both downstream and upstream the
supply chain (Alves Filho et al., 2004; Sridharan et al., 2005). Further, SCM encompasses the
planning and management of all activities involved in supply and acquisition, conversion
and all logistics management (LOM) activities. It also includes coordination and
collaboration with partners, who can be suppliers, service providers and customers
(Qrunfleh and Tarafdar, 2013).
However, Akkermans et al. (2004) comment that SCM is a highly complex activity from
academic’ and practitioner’s perspective. This is justified by the fact that a supply chain is
composed by a net of companies or independent business units, whose management
Journal of Manufacturing
becomes a broad and challenging task (Lambert et al., 2005, Ellram and Cooper, 2014). Technology Management
Within this scenario, due to the benefits provided to manufacturing environments, the Vol. 29 No. 5, 2018
pp. 829-845
incorporation of lean principles and practices into SCM has culminated in differentiated © Emerald Publishing Limited
1741-038X
results along the supply chain, surpassing those already achieved by the organizations DOI 10.1108/JMTM-09-2017-0194
 JMTM individually (Arif-Uz-Zaman and Ahsan, 2014). In this sense, the extension of the application
29,5 of lean principles and practices to supply chain has been called as lean supply chain
management (LSCM) (Anand and Kodali, 2008). Vitasek et al. (2005) define LSCM as being a
set of organizations directly linked by upstream and downstream flows of products,
services, finances and information that work collaboratively aiming at the reduction of costs
and waste, demonstrating in an efficient way what is necessary for customer’s individual
830 needs. Complementarily, LSCM emphasizes the use of lean practices in a synergistic way to
create a high-quality production and logistics systems that produce and deliver according to
the customers demand (Shah and Ward, 2003; Li et al., 2006).
Many studies are found addressing LSCM (e.g. Levy, 1997; Sridharan et al., 2005; Li et al.,
2006; Taylor, 2006; Boonsthonsatit and Jungthawan, 2015), but most of the applications are
restricted to certain industrial segments, or approach only one lean practice, neglecting a
holistic perspective inherent to the implementation of LSCM. In this context, Jasti and Kodali
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(2015b) comment on the lack of a stable and unidirectional theory regarding LSCM concepts,
since many studies focus only on individual aspects of LSCM, and few have a focus on both
upstream and downstream activities of the organization system. Further, some
modifications must be made to adapt lean principles and practices to SCM. While
manufacturing predominantly involves the flow of materials with a reduced amount of
information within the boundaries of the organization, the supply chain comprises the flow
of materials, information and resources beyond the boundaries of the organization (Anand
and Kodali, 2008). Thus, both the benefits and the barriers faced for LSCM implementation
may differ from those already known in manufacturing (Manzouri and Rahman, 2013).
Overall, it is verified the incipience of the literature with respect to the addressed topic
and, consequently, one research question can be raised:
RQ1. Which are the LSCM practices that need to be prioritized in order to efficiently
improve the operational performance of the supply chain?
Thus, the objective of this paper is to investigate which LSCM practices efficiently improve the
operational performance of a supply chain. To achieve that, a cross-sectional survey was
carried out with 113 manufacturing companies undergoing a lean implementation.
The proposed method combines complementary methods of multivariate data analysis in
order to determine which bundles of LSCM practices more efficiently entail improvements on
operational performance of supply chain. This study’s contribution is twofold. First, in
theoretical terms, it provides evidence to enhance the body of knowledge on LSCM.
The empirical examination on the efficiency of LSCM practices with regards to a certain set of
performance indicators complements the existing literature, whose indications are usually from
a narrow or shallow perspective (Martínez-Jurado and Moyano-Fuentes, 2014; Dora et al., 2016;
Tortorella Miorando and Tlapa, 2017). Second, practical implications are also observed due to
the fact it provides managers and practitioners guidelines with respect to LSCM practices, so
that companies can prioritize their implementation depending on which performance indicators
are envisioned for improvement. Such indication allows underperforming companies to
properly address their efforts and resources to maximize their outcomes.
Besides this introduction section, this paper is structured as follows: Section 2 brings a
literature review that conceptualizes the fundamental principles and practices that underlie
LSCM; in Section 3, the proposed method is described, whose results are discussed in
Section 4. Finally, Section 5 presents the final remarks and indications for future research.

2. Literature review
2.1 LSCM
Lean principles and practices became popular in 1990s, and their implementation in the
supply chain context gained more attention a few years later (Ugochukwu et al., 2012).
 More specifically, the extension of lean principles and practices to supply chain can be Supply chain
attributed to the publication of the book “Lean Thinking” by Womack and Jones (1996), performance
in which it promotes lean implementation throughout the supply chain. Hines et al. (2004)
indicate that the understanding of lean principles and practices has undergone an evolution
over the years, starting from the approach focused on plant floor tools to a contingent
perspective along the value chain. In fact, lean practices can be applied across the entire
supply chain, from placing the order with suppliers to distributing and delivering the product 831
to the end customer. In this sense, a successful LSCM implementation demands direct
involvement among suppliers and customers (McIvor, 2001; Taylor, 2006; Jajja et al., 2016).
Previous studies (Wee and Wu, 2009; Manzouri, 2012; Boonsthonsatit and Jungthawan,
2015; Hartono et al., 2015; Prajogo et al., 2016) associate the implementation of LSCM with
improvements in the supply chain’s operational performance, regardless of its context.
Erridge and Murray (1998), for instance, indicate that through the application of LSCM
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practices, similar benefits to those of the manufacturing industry can be obtained in the
Belfast City Hall, the main city of Northern Ireland. Additional evidence of LSCM
implementation can be found in different supply chains, such as food (Vlachos, 2015), toys
(Yew Wong et al., 2005), electronics (McIvor, 2001), automotive (Adamides et al., 2008; Wee
and Wu, 2009), agribusiness (Taylor, 2006; Perez et al., 2010), fashion (Carmignani, 2016),
among others. However, according to Cudney and Elrod (2011), some supply chains still
have a shortage of studies, such as informatics, civil construction, design, engineering,
government and military. Further, studies on LSCM are still less frequently evidenced in the
literature if compared to manufacturing environments. The implementation of LSCM
practices is considered more complex than manufacturing (Martínez-Jurado and
Moyano-Fuentes, 2014), since they require a significant adaptation and involve different
companies (Anand and Kodali, 2008; Manzouri et al., 2014). Curiously, Distelhorst et al.
(2016) evidenced the impact of LSCM implementation on social performance in Nike’s
supply chain in developing countries, while Bortolini et al. (2016) and Govindan et al. (2015)
proposed a framework integrating lean and green principles within SCM.
LSCM implementation, as any other improvement initiative, entails enormous
difficulties (Rahman et al., 2010) and, hence, a few questions remain unanswered due
to the inherent supply chain complexity and longer term results (Adebanjo et al., 2016).
Further, most articles on LSCM (e.g. Arkader, 2001; Anand and Kodali, 2008) shallowly
approach its critical success factors, indicating the need for leadership restructuring and
establishment of a supporting infrastructure (Adamides et al., 2008; Behrouzi and Wong,
2011). Mohammaddust et al. (2017), for instance, developed a model for alternative risk
mitigation strategies for designing lean and responsive supply chains. Based on
a case study in a British tea company, Vlachos (2015) highlights the “lack of involvement
of top management” as one of the main barriers for supporting LSCM implementation.
Jadhav et al. (2014) comment that the only way to create a truly lean transformation is
through a strong leadership at the top of the organization. Hence, the actual involvement
of top managers is fundamental to support and sustain improvements (Yew Wong et al.,
2005). In turn, the lack of commitment may lead to a number of issues, such as limited
access to resources, lengthy decision-making processes and communication failures
(Perez et al., 2010).
Karim and Arif-Uz-Zaman (2013) argue that another key factor is the formal
establishment of “improvement teams,” which are usually focused on developing training
on lean principles and practices empowering employees with the required knowledge and
skills. As lean implementation becomes reasonably consolidated within the organization
(shop floor and business processes), most companies extend training to agents of their
supply chain (Cudney and Elrod, 2011). However, the extension of LSCM implementation
tends to be initially focused on upstream agents (suppliers) and their practices
 JMTM (Bevilacqua et al., 2017). Thus, the existence of formal improvement teams for training and
29,5 qualification on LSCM practices allows greater proximity with supply chain agents,
establishing a development process that goes beyond the traditional issues related to
price and delivery (Dües et al., 2013; Wiengarten et al., 2013; Martínez-Jurado and
Moyano-Fuentes, 2014).
Additionally, Qrunfleh and Tarafdar (2013) emphasized that managers must develop
832 strategic relationships based on trust with suppliers and customers. Distrust and hostility
among these agents may discourage efforts to implement LSCM practices, implying failure
of continuous improvement (Manzouri et al., 2013). Taylor (2006) argued that there is a
difficulty in moving away from current negotiation strategies, which negatively influence
the establishment of long-term partnerships, and reinforce power-based relationships that
jeopardize LSCM implementation (Perez et al., 2010). Although there are different levels of
bargaining power among supply chain agents, gaining advantage over others is not
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coherent for an LSCM implementation, since it harms the development of shared benefits
(Lamming, 1996). Therefore, it is reasonable to assume that these agents depend on each
other to obtain higher levels of operational performance (Manzouri et al., 2014). In that sense,
Chantarachalee et al. (2014) described a case study related to construction materials supply
chain, where the dealers have dominant bargaining power over the manufacturer. Thus, it
analyzed the impact of this setup in overall performance in terms of lead time and how the
supply chain could be designed to be more lean.

2.2 LSCM principles and practices

The approach of examining the impact of lean implementation based on the assessment of
the adoption level of pre-defined practices has been widely used in previous studies (Qi and
Chu, 2009; Rahman et al., 2010; Manzouri et al., 2013; Sharma et al., 2015) and seems to be
also quite effective in understanding companies’ maturity regarding LSCM. However,
according to Karim and Arif-Uz-Zaman (2013), the proper selection of LSCM practices
depends on the context of each company and its supply chain. Therefore, the strategy for
the transition from a traditional supply chain model to a LSCM cannot be indiscriminately
generalized, since the different contextual factors are determinant for such decision
(Rahman et al., 2010).
Further, some studies (e.g. Taylor, 2006; Anand and Kodali, 2008; Vlachos, 2015) intend
to connect LSCM practices and lean principles. Perez et al. (2010), for example, evaluated the
relationship of contextual variables and performance of a supply chain with LSCM
practices. The authors propose a structure with seven dimensions of LSCM practices
categorized into five lean principles: definition of value; identification of the value stream;
making the value flow; pulling the value from the customer’s demand; and seek perfection.
The seven proposed dimensions are: demand management; specification of the value;
standardization of processes and products; value chain efficiency; key process indicators;
establishing alliances with members of the chain; and cultural change. Additionally, Mason
and Evans (2015) reported how LSCM principles and practices were actually implemented in
Tesco’s supply chain.
Anand and Kodali (2008), later complemented by Jasti and Kodali (2015a), suggest
8 pillars for the implementation of LSCM, which are constituted by 82 practices; they are:
management of information technology; management of suppliers; waste disposal;
just-in-time ( JIT) production; customer relationship management; LOM; commitment of
senior management; and continuous improvement. Tortorella Miorando and Marodin (2017)
empirically validated 4 bundles of 22 inter-related and internally consistent LSCM practices,
which are: customer-supplier relationship management (CSRM), LOM, elimination of waste
and continuous improvement (EWCI) and top management commitment (TMC). Although
there is evidence regarding the positive association between LSCM practices and supply
 chain performance, existing studies do not explicitly indicate the most effective practices to Supply chain
improving each performance indicators. performance
With regards to LSCM practices individually, “kanban” and “close relationship between
customer, supplier and relevant stakeholders” appear to be the most frequently cited in the
LSCM studies, which can be attributed to the fact that these practices are included in the
precursor studies of LSCM (e.g. Lamming, 1996; Erridge and Murray, 1998; McIvor, 2001).
In addition, “kanban” is commonly associated with JIT deliveries (Dües et al., 2013; 833
Wiengarten et al., 2013), in which the right material is delivered at the expected time, place
and quantity (Qrunfleh and Tarafdar, 2013). Consequently, its adoption implies a narrowing
of information and material flows between suppliers and customers, reinforcing the
collaboration between them (Martínez-Jurado and Moyano-Fuentes, 2014). Thus, since the
implementation of both practices is closely related (Bhamu and Singh Sangwan, 2014),
it is reasonable to expect that these practices have been consistently associated with the
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LSCM studies over time, leading to a high number of research evidence that reports
their application.
In turn, there are other LSCM practices that seem to be more sparsely evidenced in the
literature. For instance, the establishment of “distribution centers,” which is generally
motivated due to potential impacts on transportation costs and order processing
(Baker, 2004; Safaei, 2014), and has been recently associated with LSCM implementation.
In fact, Taylor (2006) appears to be the first study to suggest the incorporation of this
practice into the set of LSCM practices. However, only in Sharma et al. (2015) and Jasti and
Kodali (2015b) this practice was actually deemed as an LSCM practice. Thus, from the
increasingly understanding and expansion of lean thinking to supply chains, some
already-acknowledged practices gained considerable attention and began to be treated as
part of LSCM implementation.

3. Method
There are three stages to the research method proposed here: questionnaire development
and data collection; clustering of data; and data analysis. These stages are detailed in the
sections to follow.

3.1 Questionnaire development and data collection

Three criteria for selecting the sample of companies were established. First, respondents
should include companies from a pre-defined region or nationality, in this case, Brazil, as to
reduce the effects of the external environment (e.g. national culture, and socio-economic
development), as suggested by Kull et al. (2014). Second, the sample should be comprised by
companies from different industrial sectors because lean has been expanding over many
kinds of companies in recent years (Marodin et al., 2016). Third, respondents should have
experience in lean and a role whose function was directly related to SCM in the company.
The non-random choice of companies for surveys and the search for companies that are
already known to the researchers is a commonly used strategy in other studies on LM (e.g.
Shah and Ward, 2003; Netland and Ferdows, 2014). For example, Shah and Ward (2007)
used a sample with participants drawn from courses and training events when they
conducted a survey on LM, since it was necessary that the respondents had experience in
the subject. Finally, the investigated companies should have been implementing lean at least
for two years which, according to Tortorella and Fettermann (2017), would be a reasonable
amount of time to allow a minimum understanding of lean implementation and its
challenges in Brazilian manufacturing companies.
Questionnaires were sent by e-mail to 497 former students of executive education
courses on lean offered by a large Brazilian University since 2008. The institution offers
short courses on lean that are open to the general public. Thus, since these respondents are
 JMTM actually leading and facilitating lean implementation in several manufacturing companies
29,5 and are academically prepared and trained with regards to lean principles and practices,
their opinions are based on both practical and theoretical aspects. Such fact may
increase the likelihood of presenting a representative perception of LSCM implementation
within their companies. The first e-mail message containing the questionnaires was sent
in January 2016, and two follow-ups were sent in the following weeks. The final sample
834 was comprised of 113 valid responses (representing a response rate of 22.74 percent),
which were all from different companies. Most respondents were from large companies
(74 percent); the majority of companies belonged to the first and second tiers of the chain
(65 percent); and most respondents had up to five years of SCM and lean implementation
experience (65 percent). Additionally, regarding respondents’ roles within their
companies, 47.8 percent of them were supervisors, 34.5 percent were coordinators and
17.7 percent were managers.
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The questionnaire has three parts. The first part aims at assessing the level of change
over the last five years of the supply chain performance indicators: supply lead time; costs
with supply and raw material; inventory level; delivery service level; and quality. Shah
and Ward (2003) proposed a five-year period evaluation for operational performance
variation. A five-year time period should be enough for implementing LSCM practices
systemically, and for them to impact operational performance outcomes. A five-point scale
ranging from 1 (worsened significantly) to 5 (improved significantly) is used in the
questionnaire. The second part aims to collect information regarding the demographic
characteristics of the sample. Thus, companies’ contextual variables were coded into two
categories each. The first category for tier level comprised companies from the first and
second tiers, while the second category consisted of companies from tiers three and four.
For the plant size, large-sized companies were determined as the ones that presented more
than 500 employees, and small-sized were characterized by companies with less than 500
employees, as suggested by SEBRAE (2013). Lean experience was coded into more than
five years and less than five years of LM experience, according to Marodin et al. (2016),
who suggest that companies with more than five years of lean implementation might
achieve a stage where improvement initiatives are being applied to suppliers and
customers and the transition from top-down to bottom-up approach would be completed.
Respondents’ roles within their companies were also collected in order to assure that a
minimum leadership level (i.e. supervisor) was involved in the sample. Finally, the third
part of the questionnaire comprises the assessment of the implementation level of the
22 LSCM practices, as suggested by Tortorella Miorando and Marodin (2017). This
instrument was based on previous studies (Anand and Kodali, 2008; Jasti and Kodali,
2015a) and was validated in a cross-sector survey. These practices were assessed
according to a five-point Likert scale (1 ¼ low implementation to 5 ¼ high
implementation). We used an adapted header of Shah and Ward (2003), which stated
“Please indicate the extent of implementation of each of the following practice in your
supply chain.” Since this instrument has already been applied and validated in previous
research, there was no need for pre-testing, avoiding unnecessary development efforts.
Further, surveys that use data from single respondents may be affected by
respondent’s bias; to minimize that we followed some directions given by Podsakoff
et al. (2003). Regarding question formulation, supply chain performance was placed first
and physically far from LSCM practices in the questionnaire. For preventing respondent
bias, a statement clarifying that the respondents were going to be kept anonymous and
that there was no right or wrong answer was included at the invitation e-mail. Also, the
respondents were appropriate key informants for the data collected, as 68.53 percent of
them had middle and upper management roles in production or supply chain departments.
Further, Harman’s single-factor test with all variables resulted into a first factor that
 included 37.74 percent of the variance. Thus, we concluded that there was no major factor Supply chain
that accounts for the majority of the covariance among measures. We therefore assumed performance
that any level of common method bias that may exist in our data is not a significant
concern. Regarding the assessment of the implementation level of LSCM practices, we
tested for non-response bias as proposed by Armstrong and Overton’s (1977) using
Levene’s test for equality of variances and a t-test for the equality of means between early
(respondents of the first e-mail sent) and late (respondents of the two follow-ups) 835
respondents. Results indicate no differences in means and variation in the two groups,
with a 95 percent significance. Thus, there is no statistical evidence that our sample is
significantly different from the rest of the population.

3.2 Clustering of data

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The next step of the proposed method performs the clustering of observations with regards
to each supply chain performance indicator. Clustering tools are designed to analyze the
relationships within a database to determine if it is possible or not describing such data in a
summarized form, by a small number of observations of similar classes (Everitt, 1980;
Gordon, 1999). According to Rencher (2002), the objects within a cluster must be similar to
the others inserted into the same cluster (homogeneity), and different from other objects
embedded in other clusters (denoting heterogeneity). Thus, first we applied the hierarchical
method to identify the number of clusters that better categorize the performance level pi
(i ¼ 1 ,…, 5) of each indicator. Ward’s method was used, which identifies groups of similar
size based on the minimum variance of the cluster (Hair et al., 2006). Based on the analysis of
the dendrogram, the number of clusters is identified. After that, through the application of
the k-means clustering method, clusters are rearranged fixing the k clusters according to the
previous dendogram analysis. The k-means method, unlike the hierarchical method, allows
reallocation of items from one cluster to another. Kaufman and Rousseeuw (2005) point out
that one should pay attention to the manner of selection of the starting points, as the final
clusters can be changed depending on the choices of such points. As an item is added to a
cluster, its centroid is recalculated and the distances to the other points are calculated based
on this position. Finally, after all observations are allocated to a cluster, a thorough review is
made: if a point is closest to the centroid of another group, it is moved to this group and the
centroids of the two clusters are recalculated. This process continues until all observations
satisfy the above criterion.
For each supply chain performance indicator, two groups were identified according to
their perceived improvement level. Then, by means of a student’s t-test, the difference
between the average of groups of each indicator was tested, which confirmed a significant
difference between these groups’ average improvement level ( p-valueo0.000). For each
indicator, respondents with higher average values of pi were clustered into their
corresponding group named “high performers” (HPi, i ¼ 1 ,…, 5); while respondents with
lower average values for pi were included into groups denoted as “low performers”
(LPi, i ¼ 1 ,…, 5) for the respective indicator. Table I shows the size of clusters for each
supply chain performance indicator according to improvement levels (LPi and HPi).

Performance indicator LPi HPi

1– Supply lead time 68 45 Table I.

2– Costs with supply and raw material 72 41 Size of clusters for
3– Inventory level 65 48 each performance
4– Delivery service level 60 53 indicator according to
5– Quality 45 68 improvement levels
 JMTM 3.3 Data analysis
29,5 First, the 22 LSCM practices were combined into four the LSCM bundles according to
indications from Tortorella Miorando and Marodin (2017): CSRM, LOM, EWCI and TMC.
Each of the bundles was formed by adding the scores for each of the practices included in
the bundle for each responding company. All 22 LSCM practices were entered for PCA
(principal component analysis). and varimax rotation was used to extract orthogonal
836 components, and four components were extracted. Thus, the bundles were empirically
validated using PCA with varimax rotation and reliability analysis (Cronbach’s α), as shown
in Table AI. The data were analyzed using SPSS version 23. The results were replicated
using oblique rotation as a check for orthogonality, and the extracted components were
similar. Additionally, unidimensionality of each component was verified and confirmed by
applying PCA at the component level. A reliability assessment was performed determining
the Cronbach’s α values for each component, which depends upon the number of items in
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the scale and the average inter-item correlation (Meyers et al., 2006). All components
displayed high reliability, with α values above 0.809. Finally, the response value for each
bundle was obtained through the average of the corresponding practices included in the
bundle weighed by their respective factor loadings from the PCA.
Second, we examined the relationship between the factor scores of the bundles of
practices and each of the five performance indicators. Factor scores are the transformed
variable values corresponding to a particular data point after the dimensionality reduction
(Shaw, 2003). The factor scores of each bundle are assumed to represent the intensity of
effort companies dedicate toward the implementation of LSCM practices (input).
The performance indicators are seen as the desired output of such effort. Thus, we assessed
the problem from an input/output perspective, especially for companies denoted as HP. In this
sense, we focused on distinguishing between the efficient and inefficient high-performer
companies (EHP and IHP, respectively), and focused our efficiency analysis on HP cluster.
For that, we considered the factor scores of bundles of practices as “inputs” and the
performance indicators obtained from the survey as “outputs.” It is reasonable to think
about efficiency in terms of the ratio of output (supply chain performance) a company
improves with a given level of input ( factor scores of bundles), representing the effort
dedicated toward LSCM practices. Hence, we used data envelopment analysis (DEA)
technique, as previously evidenced in supply chain studies with similar objectives
(e.g. Liang et al., 2006; Wong and Wong, 2007). The choice of an output-oriented model for
our case is reasonable, since we might assume that an inefficient decision-making unit is
made efficient through the proportional increase of its outputs, while the inputs proportions
remain unchanged (Färe et al., 1994).
With respect to the scale assumptions, we followed the procedure described in Cooper
et al. (2004) to access whether constant or variable (and, in the latter case, increasing or
decreasing) returns to scale are the most appropriated for the available data. In essence,
such procedure examines the technical efficiency scores given different returns
to scale, and determines whether or not the observed levels match the frontier
corresponding to a particular scale assumption. Thus, in our case, an output-oriented and
constant-returns-to-scale model was implemented to distinguish those high performers
belonging to the efficiency frontier (technical efficiency score ¼ 1.00, EHPi) from those that
do not (technical efficiency score o 1.00, IHPi).
Finally, we tested for statistical pair-wise differences in the factor scores averages
among these three groups (LPi, IHPi and EHPi). In order to improve results robustness
under a possibly non-Gaussian data distribution, we applied a non-parametric statistical
procedure. Such procedure performs bootstrapping resamples of original data in
order to have an estimate for the distribution of the populational average, without
relying on normality assumptions (Efron and Tibshirani, 1993). As suggested by
 Razali and Wah (2011), we performed the one-sample Kolmogorov-Smirnov test for Supply chain
normality, which is a non-parametric test of the equality of continuous distributions. The performance
obtained results indicated that the normality assumption does not hold ( p-value o 0.05)
for the majority of the cases.

4. Results
Table II shows the results from the DEA application on HP companies. For each supply 837
chain performance indicator, our analysis provided two different groups (IHPi and EHPi)
with their respective sizes n. It is noteworthy that these groups presented a fairly
well-balanced amount between efficient and non-efficient companies; except for the
indicators “Quality” and “Inventory level,” which appear to have significantly more
occurrences of inefficient companies (n5 ¼ 49 and n3 ¼ 34, respectively) than efficient ones
(n5 ¼ 19 and n3 ¼ 14, respectively). Further, the cluster denoted as LP companies remained
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with the same amount of respondents indicated in Table I, since the DEA analysis was
focused only on the HP cluster.
Table III displays the significant results ( p-valueo0.10) for the pair-wise differences on
factor scores of LSCM bundles between groups of companies for each indicator. For supply
lead time, two bundles of practices appear to have significant differences between groups:
CSRM and LOM. Surprisingly, the adoption level of CSRM seems to be significantly higher
in LP companies than in IHP companies. This result suggests that, despite supply lead time
has poorly been improved on the past few years, LP1 companies appear to be more widely
implementing practices such as “close relationship between customer, supplier and relevant
parties,” “open-book negotiation,” “hoshin kanri” and “development of supply chain KPIs”
than HP1 companies. This difference is particularly observed when comparing the factor
scores of companies whose perceived improvements are resultant from unequally greater

Performance indicator LPi IHPi EHPi

1– Supply lead time 68 30 15 Table II.

2– Costs with supply and raw material 72 25 16 Number of
3– Inventory level 65 34 14 companies ‘n’ within
4– Delivery service level 60 33 20 each HP group
5– Quality 45 49 19 (LPi, IHPi and EHPi)

Performance LSCM Lower Upper Lower Upper Average

indicator bundle Company n Average value value Company n Average value value diff. (%)

Supply lead CSRM LP1 68 0.619* 0.603 0.636 IHP1 30 0.605* 0.581 0.628 −2.4
time
LOM LP1 68 0.702*** 0.679 0.728 EHP1 15 0.757*** 0.698 0.808 7.9
IHP1 30 0.707** 0.673 0.745 0.757** 0.698 0.808 7.1
Costs with CSRM LP2 72 0.614** 0.599 0.629 IHP2 25 0.594** 0.571 0.584 −3.3
supply and
raw material
Inventory LOM LP3 65 0.721*** 0.698 0.745 EHP3 14 0.777*** 0.721 0.835 7.7 Table III.
level Significant pair-wise
IHP3 34 0.709*** 0.674 0.742 0.777*** 0.721 0.835 9.6 differences of factor
Delivery CSRM LP4 60 0.615* 0.698 0.745 IHP4 33 0.602* 0.672 0.741 −2.2 scores averages
service level of LSCM bundles
TMC 0.680* 0.674 0.742 EHP4 20 0.706* 0.722 0.834 3.9 between groups
Quality EWCI LP5 45 0.697* 0.665 0.727 EHP5 19 0.734* 0.692 0.775 5.4 of companies
Note: *,**,***Significant at 10, 5 and 1 percent levels, respectively (LPi, IHPi and EHPi)
 JMTM efforts, entailing an inefficient implementation (IHP1). On the other hand, the average factor
29,5 score for LOM is significantly higher in EHP1 companies than in LP1 or IHP1 companies.
Thereby, practices such as “material handling systems,” “standardized work procedures to
assure quality achievement,” “inbound vehicle scheduling,” among others, appear to be
widely adopted by companies that identified significant improvements on supply lead time.
Further, if properly adopted, little implementation efforts of these practices can lead to
838 meaningful increases in the performance of this indicator. Thus, companies that aim at
reducing supply lead time can potentially benefit from the implementation of these practices
without expending or investing a significant amount of resources.
Regarding costs with supply and raw material, LSCM practices related to CSRM
presented a significant difference when comparing respondents from LP2 and IHP2.
Similarly to supply lead time, the average factor score for these practices is higher in LP2
companies, indicating that their implementation may be shallower in companies that claim
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significant improvements on costs but inefficiently address those throughout CSRM.

Hoberg et al. (2017) argue that sometimes a closer relationship between customers and
suppliers may imply maintaining business regardless of practiced prices. In fact,
companies that highly adopt these practices shift their approach with customers and
suppliers from the usual trading mentality to a collaborative partnership, in which
additional aspects are taken into consideration besides costs, such as efforts on concurrent
product development, reinforcement of communication and information sharing,
long-term cooperation and commitment, etc. (Petersen et al., 2005). Therefore, our
results corroborate to such findings.
With regards to the inventory level, significant differences were found for the average
factor scores of LOM for two paired analyzes: LP3/EHP3, and IHP3/EHP3. In both analyses,
the results showed that EHP3 companies have been adopting these practices more
extensively than LP3 and IHP3 ones. This outcome also evidences that companies that
search for reducing their inventory can efficiently achieve it through the small efforts on
the implementation of this bundle of practices. Further, results suggest that as LOM
implementation increases, performance improvement may increase at even higher rates.
This results somewhat converges to the findings from Waller et al. (2006) and Williams
and Tokar (2008), who emphasize that the integration of traditional logistics decision, such
as “outbound transportation” and “establishment of distribution centers,” might
positively impact inventory policies and lead to a differentiated performance level. It is
noteworthy that, according to Womack and Jones (1996) and Arif-Uz-Zaman and Ahsan
(2014), supply lead time performance is closely associated with the inventory level. Our
results corroborate to that assumption, since LOM appears to have the same
implementation impact for both performance indicators, indicating similar differences
between LPi/EHPi and IHPi/EHPi.
For a delivery service level within the supply chain, bundles CSRM and TMC presented
significant differences between LP4/IHP4 and LP4/EHP4, respectively. Analogously to what
was observed for indicators “supply lead time” and “costs with supply and raw material,”
CSRM appears to be more extensively implemented in LP4 companies than in IHP4 ones.
This result can be justified by the fact that companies facing delivery issues, either with
customers or suppliers, tend to enhance their communication and focus on information
sharing with respect to products, transportation and schedules, while companies achieving
the expected delivery service level may keep their usual intensity on CSRM practices
implementation (Kannan and Choon Tan, 2006; Masella and Rangone, 2000). Such
relationship reinforcement is hence motivated by a lower performance which may be
affecting the whole supply chain. Therefore, this context can lead to misinterpretations on
the adoption level of CSRM practices, blurring respondents’ perceptions and raising
contradictory outcomes as observed here. In turn, TMC implementation seems to be more
 pervasive in EHP4 than LP4. In this sense, results evidence that the adoption of practices Supply chain
such as “two-way feedback assessment,” “value chain management,” “keiretsu (suppliers performance
play a strategic role marshaling the efforts of their own suppliers)” and “kyoryokukai
(suppliers’ association that enhance lateral communication among suppliers, and act as an
extra bulwark against customer opportunism)” may entail significant increases in delivery
performance with minimum efforts of implementation. This result converges to the findings
from Adamides et al. (2008) and Qrunfleh and Tarafdar (2013), who argue that increased 839
levels of collaboration and commitment among suppliers can improve supply chain
responsiveness and agility to new demands.
Finally, results obtained for quality indicate that practices encompassed by EWCI
bundle are more likely to be widely implemented in EHP5 than in LP5 companies. In other
words, our results suggest that practices such as “pull system,” “levelled scheduling” and
“value stream mapping” may efficiently drive significant improvements on quality
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performance, which justifies their higher adoption level in EHP5 companies. According to
Bhamu and Singh Sangwan (2014) and Sharma et al. (2015), these practices aim at
improving flow through waste reduction. In this sense, smoother and more agile material
and information flows are more likely to provide the identification of abnormalities that can
impact quality, such as rework, scrap or misinformation. Thereby, our results corroborate to
these findings and reinforce the importance of implementing these LSCM practices in
supply chains that aim for better quality performance.

5. Conclusions
In this paper, we have studied which LSCM practices efficiently improve the performance of
the supply chain. This research suggests two major findings. First, there are certain bundles
of LSCM practices that may efficiently provide performance improvements of the supply
chain. Second, the identification of this set of practices according to the aimed performance
indicator allows companies to establish a prioritization on their LSCM efforts. Implications
of these results are of considerable importance and relevance for both researchers and
lean practitioners.
In theoretical terms, this study allows to better comprehend the effects of the
implementation of bundles of LSCM practices on the improvement of specific supply chain
performance indicators. In fact, we provide evidence for justifying why some LSCM
initiatives may find larger barriers than others, compromising their success on the
implementation, since implementation efforts might be misguided according to the desired
performance improvement. This outcome might be particularly relevant for regions
or economies whose characteristics and conditions are similar to the Brazilian ones
(developing economies).
For practitioners, our research provides some lessons. First, as we provided empirical
evidence about which LSCM bundles efficiently drive significant performance
improvements in different supply chain indicators, managers from manufacturing
companies could compare that with the pace of their LSCM implementation. Hence, they
could decide which LSCM practices require more attention at a given stage of their initiative.
Also, managers could benefit from knowing that the expended efforts on LSCM
implementation may be shifted according to the aimed performance indicator. Our results
suggest that the greatest opportunities lie in increasing the use of practices encompassed in
LOM, EWCI and TMC, leading to different performance improvements. Nevertheless,
practices included in the CSRM bundle appear to indicate contradictory findings,
particularly for supply chain delivery, costs and lead time.
In a more general way, the study provides a tool for managers to assess the state of
LSCM in their specific supply chain and, eventually, re-design their implementation
process according to the desired output. Our research provided empirical evidence that
 JMTM it is possible to improve supply chain performance by implementing specifically
29,5 LSCM practices. That is particularly important in a country that has high interest
rates and needs to compete in a global market with minimum resources (either capital
or human) availability.
There are some limitations due to the nature of the sample used in the survey that must
be highlighted. First, respondents were mostly from companies located in Brazil; their
840 answers might thus be linked to national issues. Thus, as this limitation restricts the results
to this geographic condition, it also increases the certainty that they apply to those
companies, and to others in countries with similar characteristics (developing economies).
Moreover, we disregarded the effect of the contextual variables on the implementation of
LSCM practices, since we grouped companies according to their performance and
implementation efficiency. Therefore, a better comprehension of the concurrent influence of
all contextual variables may enable describing their impact on the implementation
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effectiveness of LSCM practices more precisely.

Regarding the proposed objective, this investigation empirically examined which are the
LSCM practices that efficiently improve different supply chain performance indicators.
For that, a pre-determined set of practices was used based on previous studies. However,
further investigation would add more information regarding other potential bundles of
LSCM practices, such as the ones proposed by Jasti and Kodali (2015a), and help to establish
a wider perspective about the problem. Such extension would require a more elaborate data
collection and analysis.

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 Appendix Supply chain
performance

Factor loadings
LSCM practices CSRM LOM EWCI TMC

LSCM2 – close relationship between customer, supplier and relevant parties 0.587 0.052 0.137 0.300 845
LSCM15 – open-book negotiation 0.745 −0.045 0.187 0.190
LSCM17 – Hoshin Kanri (policy deployment and development of a
strategy for the supply chain) 0.801 0.211 0.156 0.149
LSCM18 – development of supply chain KPIs 0.531 0.309 0.213 0.298
LSCM4 – efficient and continuous replenishment 0.399 0.601 0.142 0.225
LSCM12 – material handling systems 0.301 0.721 0.177 0.102
LSCM13 – Standardized work procedures to assure quality achievement 0.117 0.794 0.032 0.119
Downloaded by University of Sri Jayewardenepura At 02:25 30 June 2018 (PT)

LSCM14 – open-minded and in depth market research conducted jointly

(joint understanding of end-user requirements so that all players can
work toward providing customer value) 0.135 0.596 0.174 0.348
LSCM16 – inbound vehicle scheduling 0.409 0.734 0.086 −0.054
LSCM19 – outbound transportation 0.441 0.592 0.067 0.132
LSCM20 – establishment of distribution centers 231 0.742 0.213 0.087
LSCM22 – functional packaging design 0.213 0.701 0.259 0.039
LSCM1 – Kanban or pull system 0.527 0.020 0.637 0.201
LSCM3 – leveled scheduling or heijunka 0.162 0.067 0.689 0.031
LSCM7 – win-win problem solving methodology 0.423 0.076 0.671 0.289
LSCM8 – value chain analysis or value stream mapping 0.009 0.219 0.773 0.286
LSCM21 – consignment stock 0.111 0.210 0.715 −0.006
LSCM5 – two-way feedback assessment 0.299 0.105 0.039 0.779
LSCM6 – value chain management 0.219 0.157 0.399 0.588
LSCM9 – Keiretsu (suppliers play a strategic role marshaling the efforts of
their own suppliers) 0.202 0.157 0.499 0.602
LSCM10 – Kyoryokukai (suppliers’ association that enhance lateral
communication among suppliers, and act as an extra bulwark against
customer opportunism) 0.168 0.212 0.276 0.723
LSCM11 – intervention strategy (customer is able to cooperatively intervene
in the supplier’s business operation and bring about change for better) 0.012 0.298 0.065 0.683
Eigenvalues 8.667 1.987 1.678 1.324
Initial percent of variance explained 38.81 8.60 7.69 5.79
Rotation sum of squared loadings (total) 3.83 3.55 3.21 2.78
Percent of variance explained 17.54 16.21 14.82 12.33 Table AI.
Cronbach’s α (sample n ¼ 113) 0.811 0.825 0.809 0.821 LSCM practices,
Notes: Extraction method: principal component analysis; rotation method: varimax with Kaiser bundles and
normalization. The italic numbers indicate which practices were allocated to which bundles factor loadings

Corresponding author
Guilherme Luz Tortorella can be contacted at: gtortorella@bol.com.br

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