Title: Lean and dynamic capabilities for SMEs - a holistic framework with an empirical investigation using structural equation modelling

Authors: Vallinayagam Arumugam; Ganesan Kannabiran; S. Vinodh; Gaurav Abhishek Tigga

Addresses: Department of Management Studies, National Institute of Technology, Tiruchirappalli, Tamil Nadu, 620015, India; Xavier Institute of Management & Entrepreneurship, Bangalore, India ' Department of Management Studies, National Institute of Technology, Tiruchirappalli, Tamil Nadu, 620015, India ' Department of Production Engineering, National Institute of Technology, Tiruchirappalli, Tamil Nadu, 620015, India ' Birla Institute of Technology, Ranchi, 835215, India

Abstract: In a dynamic business environment amidst COVID-19 pandemic, adopting best practices like lean, supply chain and knowledge management are considered rational decisions to sustain the organisational performance. Small and medium enterprises (SMEs) manage their business process by focusing on short-term benefits rather than long-term. Moreover, SMEs need a real-time model for framing the roadmap to execute the best practices. Based on the theory of dynamic capability, value and socio-technical system (STS), this study constructed a holistic framework for SMEs to create a synergetic process with lean, supply chain management (SCM) and knowledge management (KM). Partial least square-structural equation modelling (PLS-SEM) was applied to assess the framework model. The model was analysed using the sample size of 132 valid responses from Indian manufacturing SMEs. The current study formulated and studied lean management practices (LMPs) as a holistic approach with lean training, learning culture, supply chain relationship and integration for SMEs performance. The study results also clarified how SMEs could enhance their internal and external capability to improve performance.

Keywords: lean; small and medium enterprises; SMEs; dynamic capability; learning culture; supply chain and organisational performance; structural equation modelling; SEM.

DOI: 10.1504/IJPQM.2025.145575

International Journal of Productivity and Quality Management, 2025 Vol.44 No.4, pp.463 - 482

Received: 04 Feb 2023
Accepted: 28 Feb 2023
Published online: 07 Apr 2025 *

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