A comparative analysis of Lean practices and performance in the UK manufacturing and service sector firms

Abstract

For the last two decades, Lean has been primarily used to improve manufacturing processes. However, Lean is now increasingly applied to a wide range of service operations as well. This realisation of Lean among service firms is an important progress, as there are potentially more benefits to be accomplished in this sector rather than in traditional manufacturing, where decades of good work have already paid off. To look beyond the manufacturing sector, this paper empirically analyses the difference in Lean practices as well as their relationship to firm performance between manufacturing and service sectors in the UK. Though this study supports the proposition concerning the applicability of Lean practices in the service sector, these practices need to be further adapted to suit service operations. Specifically, the empirical results affirm that service firms are interested in the soft practices of Lean such as people and customer involvement while they are found underperforming in manufacturing-related practices such as total productive maintenance, set-up time and supplier feedback. Moreover, the results show a positive relationship between Lean practices and firm performance in both sectors, also the degree of effect on performance was found to be identical between the two sectors.