ANALYSIS OF LEAN AND AGILE MANUFACTURING PRACTICES UNDER UNIVERSAL, CONTINGENCY AND CONFIGURATIONAL PERSPECTIVES IN APPAREL EXPORT INDUSTRY OF PAKISTAN AND DEVELOPMENT OF A STRATEGIC FRAMEWORK FOR IMPROVING ITS PERFORMANCE

Abstract

This research study explores the integration, the degree of implementation of Lean and Agile improvement initiatives and their impact on business performance in Apparel export industry of Pakistan. Lean and Agile improvement initiatives have emerged as 21st century manufacturing paradigms. Lean and Agile Manufacturing are well recognized as improvement initiatives in the field of Operations’ Management that organizations pursuit to achieve competitiveness. An explicit understanding of inter-relationship of these improvement initiatives still lacks in the field of Operations Management and vagueness exists, whether Lean (Total Quality Management & Just-in-Time) and Agile Manufacturing are mutually supportive, mutually exclusive or one is antecedent to the other. Moreover, if antecedent to each other, then question arises which component is antecedent to the other? A 3-Stage Conceptual Framework is proposed to investigate the inter-relationship between Lean (Total Quality Management & Just-in-Time) and Agile Manufacturing and their impact on business performance in Apparel export industry of Pakistan. The proposed conceptual framework incorporates management and common infrastructure (internal and external) practices required to enable core Lean (Total Quality Management & Just-in-Time) and Core Agile Manufacturing. Stage-1 is organization culture stage, stage-2 is core manufacturing and stage-3 constitutes of business performance measures. A set of Management, Common Infrastructure (internal and external) practices, and Core Total Quality Management, Core Just-in-Time and Core Agile Manufacturing practices is identified through literature review. The proposed framework fit is assessed by employing three forms (Universal, Contingency and Configurational perspectives) of fit. A survey from 248 Apparel export firms of Pakistan is performed to test empirical validity of the conceptual framework. Multi-items constructs already developed are used to measure these practices. Moreover, Core Agile Manufacturing construct comprising three sub-dimensions (Change Proficiency, Knowledge Management and Advance Manufacturing Technology) is developed and its psychometric properties are empirically validated. The proposed framework fitness, employing five forms of fit (Direct Covariation, Mediation, Moderation, Profile Deviation and Gestalt), is tested using multiple analysis methods like Structural Equation Modeling (Covariance Base and Partial Least Squares) for direct covariation, indirect covariation (mediation) and moderation fit, multiple regression analysis for profile deviation fit and discriminant analysis for gestalt fit. At macro level, the xxii proposed framework is partially modified as Core Just-in-Time practices fail to directly link with Core Agile Manufacturing practices. However, the same is redirected through common external infrastructure practices based on theoretical justification. Moreover, core Total Quality Management and Core Just-in-Time practices fail to contribute directly in Operational Performance, nonetheless, Core Agile Manufacturing practices positively mediate the same relationship. At micro level, top management commitment, inward focus (strategic vision and planning, employees training and empowerment, information system), outward focus (relationship with customer and suppliers), and Core Agile Manufacturing (change proficiency, knowledge management and advance manufacturing technology) significantly differentiate between high and low performers. Modified framework is also tested under organizational and business environmental contexts. Firm size, ISO-9001 Registration, competitive pressures, market dynamics and technological turbulence moderate the mutual relationship among management, common infrastructure (internal and external), and core manufacturing practices and impact on business performance. The final 3-stage empirically validated framework provides a strategic direction, at macro (system) and micro (sub-system) level, to the managers of Apparel export industry of Pakistan in particular, and manufacturing managers in general, to remain competitive and achieve business performance milestones (Operational Performance, Market Performance & Financial Performance). Overall, this research study resolves the long outstanding and conflicting issue in the field of Operations’ Management and provides a detailed theoretical and empirical justification for Lean (Total Quality Management & Just-in-Time) and Agile Manufacturing implementation under universal, contingency and configurational perspectives in Apparel export industry of Pakistan. Moreover, this study contributes in the field of Operations’ Management explicitly establishing that Core Lean (Total Quality Management & Just-in-Time) is antecedent to Core Agile Manufacturing and both paradigms in combination increase business performance.