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An
An investigation on lean–green investigation
performance of Indian on lean–green
performance
manufacturing SMEs
Shashank Thanki 489
Institute of Management, Nirma University, Ahmedabad, India, and
Received 3 December 2018
Jitesh J. Thakkar Revised 24 July 2019
Accepted 26 July 2019
Department of Industrial and Systems Engineering,
Indian Institute of Technology Kharagpur, Kharagpur, India

Abstract
Purpose – Improved performance in operational (lean) and environmental (green) dimensions has been
extremely critical to the global competitiveness of organizations. As the performance of small- and medium-
sized enterprises (SMEs) is influenced by various external and internal factors, the purpose of this paper is to
analyze the lean–green performance of Indian manufacturing SMEs by investigating the influential
relationships of various factors along with the set of lean and green practices adopted by the firms.
Design/methodology/approach – The study employs a holistic approach by integrating multiple case
study and data envelopment analysis (DEA) in eight manufacturing SMEs to verify a set of five propositions
relating issues such as organizational factors, quality and environmental management certifications,
implementation of lean and green practices with operational and environmental performance in Indian SMEs.
Within-case analysis and cross-case analysis are used for a qualitative investigation of cases while DEA with
four input variables, two desirable output variables and one undesirable output variable, is used for
quantitative investigation with returns to scale (RTS) and damages to scale (DTS) analysis.
Findings – The RTS/DTS results suggest that Indian SMEs exhibit decreasing RTS and increasing DTS,
implying that they need to decrease their operational sizes in order to improve the operational and
environmental performance. The possible alternative and more practical strategy could be to introduce new
technology innovation and holistic adoption of manufacturing excellence initiatives such as lean and green.
Originality/value – The research findings provide insights into the lean and green performance
enhancement approach in the context of SMEs. The study extends key managerial implications and
policy-related guidelines.
Keywords Multiple case study, Data envelopment analysis, Small- and medium-sized enterprises,
Green performance, Lean performance, Returns to scale and damages to scale
Paper type Research paper

1. Introduction
Indian industries are expecting high level of economic growth and competitiveness through the
Indian government’s manufacturing policy like “Make in India.” Moreover, India is also
emerging as one of the most preferred manufacturing destinations in the world ( Jayaram et al.,
2014). Despite this growth opportunity in the Indian manufacturing sector, according to the
Confederation of Indian Industry’s Manufacturing in India – Need for Transformation report in
the year 2015, there are issues like innovation in manufacturing, green/sustainable
manufacturing and manufacturing cost reduction which requires utmost attention. A study
conducted by Thanki and Thakkar (2014) exposed the lacking performance of Indian
manufacturing industries in measures like quality plus process and process technology. They
also called for higher level implementation of strategies like lean manufacturing. Garza-Reyes
(2015) indicates the importance of looking beyond lean manufacturing and green manufacturing International Journal of
Productivity and Performance
Management
Vol. 69 No. 3, 2020
This paper forms part of a special section “TBL (Triple Bottom Line) sustainability and CSR (Corporate pp. 489-517
© Emerald Publishing Limited
Social Responsibility) driven performance measurement systems”, guest edited by J. J. Thakkar, B. Mahanty 1741-0401
and J. Maiti. DOI 10.1108/IJPPM-11-2018-0424
IJPPM as distinct approaches to specifically examine and analyze the integration of these two
69,3 paradigms. Singh et al. (2015) pointed that about 80 percent of the industrial population in India
belongs to small and medium enterprises (SMEs) and they account for about 35 percent of the
gross industrial output and 40 percent of total exports in the manufacturing sector. But, they
also contribute 70 percent of all industrial pollution. However, Indian SMEs have exhibited
relatively slow progress toward global market challenges, new technology adoption and gaining
490 a competitive advantage through adoption of modern operations strategies due to issues related
to resource scarcity, financial constraints, attitude of management and employees, lack of skill
and expertize, etc. (Majumdar and Manohar, 2016). According to Singh et al. (2008), SMEs
should benchmark themselves with their industrial peers for attaining continuous improvement
and change. Furthermore, global concerns about the environmental impact of manufacturing
processes forced the organizations to expand their industrial performance metrics from
measures of economic-centric performance to measures of environmental performance
(Muñoz-Villamizar et al., 2018). The need for such strategic change has led the manufacturing
industries to establish solutions for sustainable and environmentally conscious manufacturing
without compromising at profitability and productivity frontier (Shankar et al., 2017; Muñoz-
Villamizar et al., 2018). Hence, considering the increasing energy crisis, higher level of industrial
pollution and implied environmental rules and regulation, it has become mandatory for Indian
industries, specifically manufacturing SMEs, to implement sustainable strategies such as lean
manufacturing and green manufacturing for improving their operational and environmental
performance (Thanki et al., 2016; Shankar et al., 2017). It has also been confirmed by Galeazzo
et al. (2014) that simultaneous implementation of lean and green practices leads to improvement
in the firm’s operational and environmental dimensions. In summary, SMEs need to be more
competitive on both operational and environmental performance through the balanced adoption
of lean and green practices simultaneously.
Recently, research on lean and green integration and its impact on firm’s performance have
received significant attention from researchers like Galeazzo et al. (2014), Diaz-Elsayed et al.
(2013), Pampanelli et al. (2014) and Fercoq et al. (2016). Despite the profound importance of SMEs
in the economic growth of India and lean–green integration as a strategic weapon, research
blending these two is sparse in the literature. Unlike large organizations, in the case of SMEs, the
organizational structure largely follows ownership model with few partners’ or owners’ attitude
and vision play vital roles in governance, strategic decision making and thus growth of the
organization. Moreover, SMEs are struggling in embedding sustainable manufacturing
strategies such as lean and green due to poor level of technical and managerial skills and
expertise, lack of internal communication, huge investment in implementation process, lack of
in-depth training, rapid change in technology, etc. (Mathur et al., 2012; Panizzolo et al., 2012;
Sahoo and Yadav, 2018). Therefore, the aim of the present research is to investigate how various
factors and characteristics of Indian SMEs influence operational (lean) and environmental
(green) performance of the organization? A critical examination of literature reports that
contemporary researchers have significantly contributed toward lean and green investigations
independently. For example, “lean performance or leanness” is explored by Almomani et al.
(2014), Pakdil and Leonard (2014), Vinodh and Balaji (2011), Singh et al. (2010). On the other side,
“green/environmental performance or greenness” is investigated by the researchers such as
Salem and Deif (2014), Tan et al. (2014) and Rehman and Shrivastava (2013). Limited efforts have
been observed on simultaneous investigation of both lean and green dimensions. For instance,
select studies that have investigated the synergy between lean practices and environmental
performance includes Vinodh et al. (2011), King and Lenox (2001) and Maxwell et al. (1998), while
others have focused on the link between lean and green implementation (Bergmiller and
McCright, 2009a, b; Dües et al., 2013; Hajmohammad et al., 2013). Thanki et al. (2016) presented a
framework to assist SMEs in successful implementation of lean and green paradigms and
selecting appropriate set of tools to enhance their operational and environmental performances,
while Thanki and Thakkar (2016) proposed a novel tool, Value-value load diagram, for the An
assessment of lean and green performance of the manufacturing system. Furthermore, Thanki investigation
and Thakkar (2018) analyzed critical success factors for successful implementation of lean and on lean–green
green manufacturing practices in the SME environment. However, the present body of literature
lacks empirical evidence on linkages between the firm’s performance and lean and green performance
manufacturing practices. In view of this, the present research reported in this paper is directed
toward the investigation of the following research questions: 491
RQ1. What is the influence of organizational best practices on operational and environmental
performance of SMEs?
RQ2. What is the influence of the integration of lean and green manufacturing practices
on operational and environmental performance in Indian SMEs?
These research questions were investigated using an integrated approach of multiple case
study and data envelopment analysis (DEA). The key insights are developed by analyzing
eight Indian manufacturing SMEs. The multiple case study approach has conducted
within-case analysis for eight Indian SMEs for their lean and green practices. Subsequently,
in order to gain greater insights on the impact of lean, green and integrated lean–green
practices on relative efficiencies of the case organizations, DEA is employed. The relative
efficiency frontiers are developed for a set of four inputs, two desirable outputs and one
undesirable output. The research extends the improvement guidelines through returns to
scale (RTS) and damages to scale (DTS) analysis.
The organization of the paper is as follows: Section 2 discusses the theoretical background
and presents the conceptual research framework. Section 3 describes the research design
including multiple case studies and DEA. Section 4 verifies set of propositions by integrating
the results of multiple case studies and DEA. In Section 5, insights generated by integrated
approach are discussed. Section 6 presents the theoretical and managerial implications of the
present study. Concluding remarks and future extensions are described in Section 7.
The study offers specific implications of the findings on policy development and
managerial practice. Specifically, the study contributes to the literature by linking key lean,
green and organizational constructs that influence the operational and environmental
capabilities of SMEs in India.

2. Theoretical background and conceptual framework

As suggested by Garza-Reyes (2015), the need of today for any organization is a concurrent
improvement in operational and environmental efficiency. Irrespective of size and sector,
improving operational efficiency is crucial and can be achieved through quality improvement,
cycle time reduction, productivity improvement, waste reduction and elimination of rework
(Koning et al., 2008). SMEs exhibit lower level awareness and implementation of initiatives to
enhance environmental performance and efficiency due to lack of time, resources, expertise
and insentience of their environmental impact (Sarkis and Dijkshoorn, 2007). Evaluation
of environmental efficiency allows the organizations to realize their current state of
environmental performance particularly, relative to their peers and also renders a roadmap for
improvement (Song et al., 2012).
Recent empirical research indicates a positive relationship between the adoption of
manufacturing strategies like lean and green manufacturing and ensuring improvement in the
firm’s performance in terms of use of resources, cost reduction, reducing environmental impact,
minimization of environmental emission, production cost saving, improvements in product
quality, productivity, speed and mix flexibility (Pampanelli et al., 2014; Verrier et al., 2014;
Galeazzo et al., 2014). Lean and green approaches work synergistically and joint implementation
of lean–green ensures higher performance in both operational and environmental dimensions
IJPPM (Garza-Reyes, 2015). An individual evaluation of operational and environmental efficiency
69,3 cannot portrait complete picture of the organization’s performance as organizations trying to
improve operational performance may cause the adverse effect on environmental dimension and
vice versa. Integrated evaluation in both dimensions, operational and environmental, by
aggregating their performance measures provides a holistic approach of efficiency assessment
which leads to sustainability. To identify the most relevant articles on integration of lean
492 manufacturing and green manufacturing, a literature review has been conducted using
keywords such as lean and green practices, lean–green, lean and green paradigms, lean
manufacturing and environmental performance, etc., and it was further complemented by cross-
referencing as suggested by Kumar et al. (2016). The search engines like Google Scholar and
Scopus were explored for this purpose. The articles from leading journals such as Production
and Operations Management, Production Planning and Control, Journal of Cleaner Production,
International Journal of Production Research, Supply chain Management: An International
Journal, Resources, Conservation and Recycling, International Journal of Management Science
and Engineering Management, International Journal of Lean Six Sigma, International Journal of
Environmental Science and Technology, etc., published since 2001 were sorted based on the
assessment of abstracts and then selected after careful full text reading. Highly cited articles
published in the conference proceedings were also selected to enrich the review. Thus, in order to
examine the researching efforts made in this direction, Table I reports an assessment of
literature on integrated lean and green manufacturing practices.
The critical examination of the present literature has helped to develop a few key
insights such as:
(1) by adopting strategies like lean and green manufacturing, a firm can operate more
efficiently and effectively which enhances its competitiveness; and
(2) literature accounts various studies related to operational and environmental
performances and efficiencies of the industrial organizations and specifically SMEs,
but no study reports assessment of operational (lean), environmental (green) and
unified (lean–green) efficiencies on eco-leanness frontier and link it with the lean and
green initiatives and management of SMEs specifically in the Indian context.
Therefore, the proposed study attempts to contribute to the lean–green theory by examining
the implementation status of lean–green manufacturing practices in select manufacturing
SMEs in India using integrated multiple case study and DEA approach. DEA, a
non-parametric linear programming tool, has found extensive application in benchmarking
and identifying efficient frontier to expose the shortcomings of inefficient decision-making
units (DMUs) using multiple inputs and outputs. To draw conclusions, this study used
quantitative measures such as product quality, lead time, gross profit earned, resource
consumption in terms of material and energy, number of employees and solid waste
generation been collected and analyzed over a period of three years.
Initially, the study attempts to investigate whether organizational factors and
implementation of lean and green manufacturing practices affect the operational and
environmental efficiency of the SMEs by following the propositions as presented in
Figure 1. The propositions are primarily derived based on the insights gained from the
literature as discussed above. This research intends to test the existing theory on lean–green
implementation in SMEs by undertaking the investigation of five propositions as outlined
below. Subsequently, the relevance of the proposition is checked with the SME managers
and executives. This has helped to formulate five hypotheses for the detailed investigation
on lean and green implementation in Indian SMEs:
P1. Organizational factors are positively related to their operational and environmental
performance.
Sr. Author/s and year of Research
No. publication methodology Industry sector/type Focus on Key findings/contribution

1. Gupta et al. (2018) Mathematical Manufacturing Performance System dynamic modeling approach for lean–green performance
modeling measurement assessment
+Case study Resources such as manpower availability, machine availability and
employee skills help to reduce process waste and improve the
lean–green performance of the firm
2. Zhan et al. (2018) Empirical Manufacturing Best practices/ Explains relationships between green and lean practice,
performance environmental pressures and organizational performance
measurement
3. Abreu et al. (2017) Descriptive – Literature review Lean–green models focus on improving the systems productivity
while reducing the environmental impacts
Lean–green integration leads to sustain and endure a greener
industrial activity
4. Fercoq et al. (2016) Mathematical Manufacturing Performance Integration of lean management and 3R hierarchy positively
modeling (electronics component) measurement influences the performance of a waste progress plan in manufacturing
+Case study
5. Sagnak and Empirical – Performance Integration of the Six Sigma approach in assessing the performance of
Kazancoglu (2016) measurement the green lean system allows the measurement of the process
variations to decrease unfavorable ecological impacts of companies’
products or services, while enhancing environmental efficiency
6. Thanki et al. (2016) Empirical – Best practices TPM, Kaizen and 5S are the most influential lean practices, while ISO
14001, 3R and DFE are leading green practices
On-time delivery and quality control are the critical criteria of
leanness, while greenness is dictated by a reduction in noxious
emissions and energy consumption
7. Kumar et al. (2016) Empirical Automotive industry Best practices A nine-level hierarchical model of barriers in implementing the
GLSPD process in the automobile sector of India
8. Thanki and Thakkar Empirical SMEs Performance A graphical tool “Value-value load diagram (VVLD)” for lean–green
(2016) measurement performance assessment developed integrating VSM, MFCA and
Pinch analysis methodology with a computer-based support system
9. Campos and Vazquez- Empirical Appliance sector Best practices The majority of the lean and green practices are synergetic to lean and
Brust (2016) green performance, even though the implementation of green and lean
practices is compartmentalized in different areas

(continued )
performance
investigation
on lean–green
An

Table I.

related to lean–green
A review of studies

manufacturing
493
 69,3

494

Table I.
IJPPM
Sr. Author/s and year of Research
No. publication methodology Industry sector/type Focus on Key findings/contribution

The strongest synergic results are found in practices related to

suppliers and customers
10. Verrier et al. (2016) Empirical – Best practices Proposed an implementation of sustainable lean and green practices
11. Duarte and Cruz- Conceptual – Performance Proposed a conceptual framework considering four standard BSC
Machado (2015) measurement perspectives to assess the performance of the lean and green
initiatives along the entire supply chain
12 Govindan, Azevedo, Empirical Automotive industry Best practices Development of linkages among various lean, green and resilient
Carvalho and Cruz- practices and performance measures
Machado (2015)
13. Ng et al. (2015) Empirical Manufacturing (metal Best practices An easy to track matric named Carbon-value efficiency (CVE) is
stamped part production) introduced
A 4-step methodology is proposed and demonstrated to implement
lean and green practices
14. Garza-Reyes (2015) Descriptive – Literature survey An exhaustive review of the lean and green with identification of
research gaps and inconsistencies in the literature
Raised key research questions to extend the research in the area of
lean green integration
15. Pampanelli et al. (2014) Empirical Automotive manufacturing Manufacturing Lean and green model, developed by integrating environmental
(case study) capabilities sustainability into pure lean thinking can reduce resource utilization,
reduces the total cost of mass and energy flows in a production cell
16. Verrier et al. (2014) Empirical SMEs Best practices/ Proposed a lean and green management framework to benchmark
performance lean and green practices in order to target the best in class and the
measurement associated best practices
17. Kurdve et al. (2014) Empirical Vehicle and automotive Strategic choice Demonstrates the approaches to integration of formal management
(case study) companies systems (EMS, QMS and OHS) with a company-specific operations
improvement system (XPS) in five global manufacturing companies in
Sweden
18. Duarte and Cruz- Empirical – Strategic choice Proposed a lean–green transformation framework indicating how and
Machado (2013) when lean–green approach can be integrated using principles and
tools that support both a lean and a green approach
19. Dües et al. (2013) Empirical – Best practices Lean environment serves as a catalyst to facilitate green
implementation

(continued )
Sr. Author/s and year of Research
No. publication methodology Industry sector/type Focus on Key findings/contribution

Implementation of green practices positively influences existing lean

business practices
20. Galeazzo et al. (2014) Empirical Manufacturing Best practices Simultaneous implementation of lean and green practices is more
(case study) (multinational) efficient than sequential implementation
Simultaneous implementation calls for involvement of external
suppliers and results in higher operational performance
21. Diaz-Elsayed et al. Mathematical Automotive parts Strategic choice/ Proposed a three-step approach to the proactive performance
(2013) modeling manufacturing performance valuation of a manufacturing system affected by the application of
+Case study measurement lean and green strategies
22. Cabral et al. (2012) Empirical Automotive supply chain Best practices Proposed and validated an integrated lean, agile, resilient and green
(Volkswagen Autoeuropa) (LARG) analytic network process (ANP) model to support decision
making in choosing the most appropriate practices and KPIs to be
implemented by companies in an SC
23. Carvalho et al. (2010) Conceptual – Best practices/ Proposed the main lean and green practices that could be deployed in
performance a manufacturing SC context
measurement
24. Vais et al. (2006) Empirical Paper and board mill Best practices Lean and green implementation resulted in increased productivity,
use of recycled material and water saving along with reduction in
water COD
25. King and Lenox (2001) Empirical Manufacturing industries Strategic choice Lean production positively influences environmental performance
(USA) Adoption of ISO 9001 increases the likelihood for ISO 14001 adoption
Lean is green
26. Bergmiller (2006) Empirical Manufacturing (Winners of Strategic choice Green practices improve both green and lean results when
Shingo Prize for implemented in a lean environment
Manufacturing Excellence) Synergistic lean and green practices optimize the human resources
27. Bergmiller and Empirical Manufacturing plants Best practices Lean and green are synergetic
McCright (2009a)
28. Bergmiller and Descriptive – Manufacturing A comprehensive lean/green comparative model.
McCright (2009b) capabilities
performance
investigation
on lean–green
An

Table I.
495
IJPPM Implementation
69,3 of lean practices
(+) P3

Operational
Organizational (lean)
(+) P1 performance
496 factors

(–) P5

Quality/ (+) P2
Environmental Environmental
certification (green)
(+) P4
performance

Implementation
Figure 1. of green
Research framework
practices

P2. Acquisition of quality and environmental management certification is positively

related to SMEs operational and environmental performance.
P3. Implementation of lean manufacturing practices is positively related to SMEs operational
and environmental performance.
P4. Implementation of green manufacturing practices is positively related to SMEs
operational and environmental performance.
Subsequently, it is important to assess the interrelationship between operational and
environmental performance, according to the following proposition:
P5. SMEs operational performance and environmental performance are negatively related
to each other.
Therefore, these set of propositions will guide this study to investigate that whether
above-mentioned constituents help to enhance the operational and environmental
performance of the SME by effective utilization of the resources. The following section
discusses the methodological procedures followed in the present research.

3. Research design
This study employs a holistic approach by integrating multiple case study and DEA to
investigate the status of Indian manufacturing SMEs in lean–green dimensions. As SMEs
work within the comparatively uncertain environment with limited human, financial and
physical resources and having ownership model without any formal management structure
with mostly autocratic system of decision-making process, there exist many intangible
factors which have a significant impact on the performance, growth and success of SMEs.
To examine the impact of intangible factors such as management approach and know-how,
workers’ training and skills, embracing certification like ISO 9001 and 14001, etc., a multiple
case study approach is employed as it dilutes the risk of observer’s bias and thus, increases
the robustness of research findings in comparison to a single case study approach (Hu et al.,
2016; Eisenhardt, 1989). Considering the benefits and advantages of qualitative multiple
case-based research approach during the early explorative stages of theory building
(Yin, 2009), eight Indian manufacturing SMEs were selected to ascertain the implementation
status of lean and green manufacturing practices, organizational culture and management
and to gather primary data and information needed for comparing SMEs on the efficiency An
frontier. Moreover, Yin (2009) also argued that case-based research is appropriate to study investigation
the complex phenomena in its natural setting through in-depth observations and for on lean–green
addressing why, what and how type questions. DEA analysis is used as a quantitative
diagnostic tool to compare the case SMEs on operational and environmental efficiency performance
frontier and to propose the improvement guidelines through RTS and DTS analysis. As
DEA is a well-established method to measure relative efficiency of homogenous set of firms 497
called DMUs through multiple input and output variables and compare them on the
efficiency frontier, we have measured the operational, environmental and unified efficiency
index of the SMEs using DEA models with four input variables, two desirable output
variables and one undesirable output variable. The overall methodology adopted for
investigating lean–green implementation in Indian SMEs is presented in Figure 2.

3.1 Case study methodology

3.1.1 Case selection. The primary objective of this exploratory research is to identify the
factors that appear to influence lean and green performances of SMEs and thus to capture
the relationship between organization environmental factors, lean and green manufacturing
practices and firm’s performance in operational and environmental dimensions. To address
this, a multiple case-based approach was selected as there exists little theoretical evidence
describing the complexity of lean and green implementation and assessment specifically in
the context of SMEs (Thanki et al., 2016; Garza-Reyes, 2015). Moreover, case study approach
allows to analyze the subject in its most natural and social context and also aids in

Literature review and Industry Interaction

Development of propositions for investigating

lean–green implementation in Indian SMEs

Multiple Case Study Analysis

Key Constructs: Organizational factors, Quality/
Environmental management certification, Implementation
of lean practices, Implementation of green practices

Data Envelopment Analysis

Input: Material cost, Energy cost, No. of employees,
Lead time
Output: Gross profit, Quality, Solid waste

Returns to scale (RTS) and

Damages to scale (DTS) analysis

Verification of propositions and key insights on Figure 2.

lean–green implementation in Indian SMEs Research methodology
IJPPM examining the unanticipated variables that might be influencing the phenomenon (Gibbert
69,3 et al., 2008; Thakkar et al., 2012). According to Panizzolo et al. (2012) and Yin (2009), one of
the critical factors for selecting case organizations in case study research is the access to
information. In the present study, another important criteria considered was that the object
for analysis, i.e., the organization should fall in the category of small and medium-scale
enterprise (SME) as defined by Ministry of Micro, Small, and Medium Enterprises under
498 Government of India (Government of India, Development Commissioner (MSME), 2006).
Eight cases for the study were selected using purposive sampling process as
explained by Eisenhardt (1989) with the following specifications (Scott and Bruce, 1987;
Panizzolo et al., 2012):
• the management of the organization is independent and having mostly owner-manager
structure;
• an individual or a small group is responsible for the supply of capital;
• the organization belongs to the manufacturing sector, operating locally but, serving
the global market; and
• the adoption of lean and green manufacturing practices is not influenced or controlled
by the parent organization.
This study utilizes a multiple case study approach to strengthen the generalization on
lean–green implementation in Indian SMEs. As recommended by Yin (1998), there is a
distinction between literal replication (where the cases are designed to corroborate each
other) and theoretical replication (where the cases are designed to cover different theoretical
conditions). As the investigation of lean–green implementation in SMEs in the nascent
stage, the nature of research is exploratory. Hence, it is not possible to decide before the field
visits and data collection, an appropriate theoretical base for selecting cases for
investigation. However, the cases differing on a range of measures such as organizational
structure, type of products, processes, no. of employees, etc., can provide better coverage
and greater opportunity of revealing patterns on the issue under investigation. In view of
this, the eight diverse manufacturing organizations fitting in the definitional framework of
SMEs were sampled from the population of manufacturing SMEs. Furthermore, few SMEs
have high level of lean and green practices implementation, while others have either
moderate or lower level of implementation. Some organizations are having ownership in the
form of a single person as the proprietor, few organizations are managed as the partnership
firms with two or three partners, while one organization is having well-structured
management with vertical organizational structure as managing director/s and executive
director/s at the top level followed by plant-level managers, executives, supervisors and
workers. Two organizations among eight selected SMEs have implemented lean
manufacturing practices through a government scheme called lean manufacturing
competitive scheme (LMCS), two organizations have implemented lean and green practices
by hiring private consulting services, while in other firms, it is implemented due to owner’s
or manager’s own knowledge and capabilities without any support from external agency.
Thus, the selected cases were operating in extreme situations and polar types as suggested
by Eisenhardt (1989). The decision-making team comprised owners and managers who are
responsible for handling and managing day-to-day activities and also playing a critical role
in taking strategic decisions.
3.1.2 Data collection for case study. As interviews are considered as one of the most
efficient means for collecting rich, empirical data ( Jayaram et al., 2014), the information
utilized in the present study was collected by organizing personal visits to the case SMEs
and conducting semi-structured interviews with owners and managers at different levels.
Moreover, company’s annual reports, auditing results, product catalogs, brochures and An
websites were referred to as the secondary sources to substantiate and better understand investigation
the primary data and to collect additional information. The construct validity has been on lean–green
ensured by triangulation through reviewing multiple sources of evidence by means of
production facility and plant level visit, observations and interviewing the plant level performance
operators and workers (Gibbert et al., 2008; Panizzolo et al., 2012; Thakkar et al., 2012). For a
further detailed analysis of the collected information and data, all the interviews and 499
discussions were recorded and transcribed.
3.1.3 Constructs for case analysis. The key constructs selected to investigate the case
SMEs through cross-case analysis are presented in Table II.

3.2 Data envelopment analysis (DEA) models

The present body of literature reports various options for performance evaluation and
benchmarking. For example, ratio indicators, see De Toni and Tonchia (2001), and
stochastic production function approach (Vitaliano and Toren, 1994; Zuckerman et al., 1994;
Webster et al., 1998). DEA has been recognized as a powerful technique for performance
measurement and has been successfully employed for assessing the relative performance of
a set of firms, usually called as the DMU, which use a variety of incommensurate inputs to
produce a variety of incommensurate outputs. DEA is a non-parametric method which
measures technological efficiency by relating multiple inputs to multiple outputs. However,
the other approaches, such as the stochastic frontier approach, measure economic efficiency,
which is a broader concept than technological efficiency, as it covers the unit’s reactions to
market prices. Economic efficiency includes technical efficiency and allocative efficiency.
SMEs being the most vital and vulnerable entity of the economy are exposed to intensified
competition. This has increased their concern for efficiently transforming various inputs
into valued outputs. DEA efficiency is a critical methodology for performance evaluation
because it is based on the ratio of inputs to outputs. DEA accommodates differences in size,
management, objectives or other characteristics with the flexibility to include only the
relevant inputs and outputs. Finally, DEA requires no statistical assumptions about the
underlying data. For these reasons, the present investigation on lean–green implementation
in Indian SMEs employs DEA analysis. Two most popular versions of DEA models are
constant return to scale model and variable return to scale model. DEA analyzes multiple
inputs and outputs and compare DMUs under investigation against a virtual DMU on the
efficiency frontier and provides their relative performance evaluation (Assaf et al., 2015).
This permits to expose the inefficient units in comparison to best practice DMUs and also
renders the magnitude of inefficiencies present. DEA found its application in various fields
such as environmental efficiency evaluation (Sueyoshi and Goto, 2011, 2012; Zhang et al.,
2008; Sarkis and Dijkshoorn, 2007), manufacturing cells efficiency evaluation
(Sofianopoulou, 2006), supplier selection (Kuo et al., 2010), selection of manufacturing
technology (Wang and Chin, 2009), estimation of operational efficiency (Saranga, 2009),
assessment of environmental management efficiency (Xie et al., 2016). Wan and Chen (2008)
applied DEA to evaluate leanness of manufacturing system using measures like time, cost
and value. This study utilizes the output-oriented range-based measure (RAM) model to
evaluate operational efficiency and return to scale (RTS) on desirable output, output-
oriented RAM model to evaluate environmental efficiency and damage to scale (DTS) on
undesirable output and unified DEA model to evaluate unified efficiency and RTS/DTS on
both types of outputs as proposed by Sueyoshi and Goto (2011).
3.2.1 Input–output variables for DEA. The study uses data for eight manufacturing SME
units of India. The data were collected during the personal visit to each SME and examining
the annual financial reports, performance charts and audit reports available at the
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Table II.
Key constructs for
cross-case analysis
Construct References Explanation

1. Organizational factors
1.1. Top management Hodge et al. (2011), Scherrer-Rathje et al. (2009), Organizations need top management commitment to initiate performance improvement
commitment Govindan, Diabat and Shankar (2015) initiatives. This leads employees to observe and realize the change process within the
organization and encourages them to participate in the process. It is important to
understand that top management admits all stakeholders and external bodies responsible
for investment and strategic decisions
1.2. Investment in Newton (2011), Dangayach and Deshmukh Proactive organizations invest predominately in product and process innovation which
innovation (2001), So and Sun (2010) leads to sustainable manufacturing and growth in profit
1.3. Collaboration with So and Sun (2010), Gecevska et al. (2012), Collaboration with suppliers plays an important role in increasing agility, extending
supplier Gunasekharan et al. (2014) internal capabilities, reducing time, improving quality, lowering costs and improving
innovation
1.4. Collaboration Langner and Seidel (2009), Lin et al. (2013) Collaboration with OEM provides opportunity to refine newly developed technologies, to
with OEM clarify future market trends effectively and use the first time right approach which reduces
redesign cost and waste
1.5. Use of IT/ERP Moyano-Fuentes et al. (2012) Use of IT in activities such as developing more robust and efficient design of products and
manufacturing, design analysis, process planning and management results in a higher
efficiency through higher level of lean manufacturing adoption
1.6. Participation in Kumar Mittal and Singh Sangwan (2014), Xue Government support through various schemes and programs helps the organizations in
government et al. (2013), Deif (2011) implementing various performance improvement tools and techniques
scheme/support
1.7. Internal communication Talib et al. (2011) Internal communication of goals and strategies within the departments and among the
employees help successful implementation of lean and green practices
1.8. Skills and expertise Achanga et al. (2006), Rehman et al. (2013) Lack of skills and expertise may prevent employees to take corrective actions although they
of employees are aware of the benefits of improved operational and environmental performance
2. Quality/environmental Lo et al. (2012), Lee et al. (2008), Kurdve et al. Acquiring certification such as ISO 9001 and ISO 14001 positively influences organization’s
management (2014) managerial effectiveness, financial performance, environmental performance and
certification competitiveness
3. Implementation Rahman et al. (2010), Yang et al. (2011), Thanki Implementation of lean manufacturing practices positively influences the operational and
of lean practices et al. (2016) environmental performance of the firm. Moreover, prior implementation of lean practices
has positive impact on adoption and implementation of green manufacturing practices
4. Implementation of Yang et al. (2011), Thanki et al. (2016) Implementation of green manufacturing practices may not have significant positive
green practices influence on firm’s operational performance but it significantly improves firm’s
environmental performance
administrative department of the firm. The DEA analysis is based on three consecutive An
financial years (FYs) 2012–2013, 2013–2014 and 2014–2015 data. Thus, the total number of investigation
DMUs analyzed in this study is 24, which is more than three times the sum of numbers of on lean–green
inputs outputs and so sufficient to ensure that there is no loss of discriminating power
during DEA (Tone and Tsutsui, 2009). The various input and output variables selected for performance
the study are presented in Table III.
501
4. Analysis and results
The research has adopted within-case analysis and DEA for deducing key insights on lean–
green implementation in Indian SMEs. The analysis has helped to investigate five propositions
and strengthen the present body of literature on lean and green integration through key insights.

4.1 Multiple case studies

This section presents the within-case analysis of eight cases SMEs selected for this study.
Table IV shows the business characteristics of these case SMEs.
In order to understand the present organizational setting of case organizations, the eight
case organizations are mapped against the level of implementation of various lean and green
practices in Figure 3 where “1” indicates that practice is not implemented while “5” indicates
complete implementation of the practice.

4.2 Data envelopment analysis (DEA)

Table V shows the data set used to evaluate eight cases SMEs for three consecutive
FYs 2012–2013, 2013–2014 and 2014–2015. These data are applied to models discussed
in Section 3.2 to evaluate operational (lean) efficiency, environmental (green) efficiency and
unified (lean–green) efficiency of case SMEs. Table VI and Figure 4 present the efficiency
results and summarize the RTS and DTS for eight cases SMEs along with the upper and
lower bounds of σ*, where superscript (*) indicates the optimality of the dual variable σ.

5. Insights from integrated multiple case study and DEA analysis

This exploratory research intended to investigate the role of key constructs in the operational
(lean) and environmental (green) performance of SMEs. The constructs employed in
developing the propositions are:
• Organizational factors: top management commitment, investment in innovation,
collaboration with supplier and OEM, use of IT/ERP, participation in government
scheme/support, internal communication and skill and expertize of employees.

Lean/Green Input (I)/

Variable measure Output (O) Reference

Material cost (INR) LM+GM I Mahajan et al. (2014), Saranga (2009), Thanki and
Thakkar (2016)
Energy cost (INR) GM I Mitra Debnath and Sebastian (2014), Thanki and
Thakkar (2016)
Number of LM I Yang (2006), Sueyoshi and Goto (2010), Sueyoshi
employees and Goto (2011), Mitra Debnath and Sebastian (2014),
Wang and Feng (2015)
Lead time (days) LM I Anvari et al. (2014)
Gross profit (INR) LM O (Desirable) Yang (2006)
Quality (%) LM O (Desirable) Anvari et al. (2014)
Solid waste (tons) GM O Zhang et al. (2008) Table III.
(Undesirable) Variables for DEA
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Table IV.

of case SMEs
characteristics
Company A Company B Company C Company D Company E Company F Company G Company H

Product Machinery and Electrical Basic metal Basic metal industry Basic metal Precision Basic metal industry Basic metal
sector parts except machinery industry industry engineering industry
electrical and apparatus (Foundry) industry
Main Petrochemical All industries Hydro power Chemical industries, Chemical Automobile Railways, defense Automobile
markets refineries organizations steel plants, gas industries, industries, wind equipment industries,
power plants automobile mill manufacturers manufacturing chemical
industries industries industries
Position in Tier-I OEM Tier-I Tier-I/II Tier-I/II Tier-I Tier-I Tier-I
supply chain
Annual 1,00,00,000 6,50,00,000 1,00,00,000 1,20,00,000 3,00,00,000 180,00,00,000 6,00,00,000 28,00,00,000
turnover
(INR)
Production 100% MTO 90% MTO, 100% MTO 90% MTO, 10% 100% MTO 70% MTO, 30% 100% MTO 90% MTO, 10%
strategy 5% MTS MTS MTS MTS
Avg. 30 55 10 30 17 400 30 100
number of
employees
Number of 5 1,500 200 40 12 45 25 30
suppliers
Average 30 days 75 days 30 days 40 days 4 days 30 days 20 days 15 days
inventory
level (days)
Order Cost, quality Quality, Quality Quality, delivery Quality Quality, delivery Quality, cost Quality, cost,
winners delivery productivity
Type of Functional Functional Product Functional Product Functional/cellular Functional Functional
layout
Certification ISO 9001 ISO 9001 ISO 9001, ISO 9001 ISO 9001 ISO/TS 16949, ISO ISO 9001 ISO 9001. ISO
acquired ISO 14001, 14001 14051
ISO 18001
Lean 5S, Kaizen, 5S, Visual 5S, Visual 5S, Kaizen, TPM, 5S, Kaizen, TPM, 5S, Kaizen, TPM, 5S, Kaizen, Visual 5S, Kaizen
practices TPM control control, TPM SMED, Visual SMED, Visual SMED, Visual Control, TPM
implemented control, VSM control, VSM control, VSM
Green GSCP, DFE – – Optimum use of 3R, DFE Optimum use of 3R 3R, DFE
practices natural resources natural resources
implemented (OUNS) (OUNS)
 • Quality/environmental management certification. An
• Implementation level of lean and green manufacturing practices. investigation
In the following discussion, we test the five propositions developed in Section 2 using cross- on lean–green
case analysis and DEA results. A cross-case analysis was used to identify commonalities and performance
differences across the case SMEs with respect to organizational factors, quality/environmental
503
Implementation level of lean (L) and green (G) manufacturing practices
5
5S (L)
Kaizen (L)
4 TPM (L)
SMED (L)

3 Visual Control (L)

VSM (L)
GSCP (G) Figure 3.
2 Lean and green
DFE (G)
practices
OUNR (G) implementation in
1 3R (G) case SMEs
A B C D E F G H

Raw mat. Number of Energy cost Avg. lead Gross Quality Solid waste
cost (Rs) employees (Rs) time (days) profit (Rs) (%) (tons)
Input 1 Input 2 Input 4 Desirable Desirable Undesirable
Year SME (IP1) (IP2) Input 3 (IP3) (IP4) OP 1 OP 2 OP 1

2012–2013 A 6,800,000 45 384,000 30 2,200,000 95 6.19

B 50,000,000 51 492,000 75 20,800,000 98 0.5
C 67,000,000 10 900,000 180 12,000,000 99.8 25
D 37,213,000 28 545,000 55 318,447 99 5.73
E 7,422,875 15 1,898,841 10 1,708,452 70 10
F 810,100,000 424 62,500,000 7 78,098,000 97.8 262.36
G 53,600,000 20 720,000 25 10,800,000 98 20
H 183,622,720 85 656,416,129.5 30 42,921,820 97.9 75
2013–2014 A 7,020,000 30 336,000 30 1,100,000 95 6.05
B 55,000,000 55 565,000 75 22,900,000 98 0.5
C 76,900,000 10 1,100,000 180 13,700,000 99.8 35
D 20,065,000 30 600,000 55 1a 99 5.25
E 7,931,696 17 1,620,192 8 1,804,876 80 10
F 803,700,000 432 69,600,000 7 32,675,000 97.99 278.1
G 63,058,000 22 880,000 25 12,330,000 98 20
H 229,528,400 90 772,254,270 26 50,496,248 98 78.3
2014–2015 A 2,800,000 18 204,000 30 700,000 97 1.89
B 65,000,000 63 600,000 52 27,100,000 98 0.5
C 60,300,000 10 1,000,000 180 10,500,000 99.8 40
D 23,281,000 31 625,000 55 1,496,824 99 8.71
E 9,152,621 17 1,855,240 4 2,016,852 95 10
F 900,693,000 431 73,800,000 7 48,090,000 98.47 335.53
G 50,049,000 22 830,000 25 9,765,000 98.2 21
H 255,032,649 100 8,580,603 25 63,758,162 98 84.15 Table V.
Notes: aCompany D reported loss in year 2013–2014. The negative value of profit is replaced with a small Input–Output
positive value “1” considering “positivity” requirement of DEA (Bowlin, 1998) variable for DEA
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strategies
Table VI.
Efficiency scores,
RTS, DTS for case
SMEs and suggested
Efficiency scores Operational performance Environmental performance
Year SME Operational Environmental Unified (lean–green) Lower bound of Upper bound of RTS Lower bound of Upper bound of DTS
(lean) (green) σ* σ* σ* σ*
2012–2013 A 0.978 0.91 0.917 0.503 0.554 D 0.112 0.112 I
B 1 0.997 0.998 0.325 10.013 D 0.119 0.119 I
C 1 1 1 −0.637 41.028 C 0.145 0.277 I
D 1 0.939 0.956 0.448 0.448 D 0.044 0.044 I
E 1 0.858 0.899 −1.096 −0.519 I 0.122 0.277 I
F 1 1 1 0.491 1.444 D 0.526 0.676 I
G 1 0.847 0.89 0.494 6.633 D 0.178 0.277 I
H 1 0.968 0.844 0.538 0.538 D 0.247 0.194 I
2013–2014 A 0.984 0.903 0.915 0.503 0.503 D 0.122 0.277 I
B 1 1 0.994 0.190 0.598 D 0.122 0.122 I
C 1 1 1 0.221 0.489 D 0.122 0.228 I
D 1 0.938 0.956 2.334 10.013 D 0.044 0.044 I
E 1 0.857 0.898 −39.659 −1.291 I 0.122 0.277 I
F 1 1 0.943 15.847 15.847 D 0.400 5.711 I
G 1 0.851 0.894 0.505 6.631 D 0.051 0.057 I
H 0.827 1 0.846 0.541 0.541 D −2.402 0.277 C
2014–2015 A 1 0.914 0.938 0.151 2.788 D 0.023 0.023 I
B 1 1 1 0.151 0.529 D −2.402 0.248 C
C 1 0.991 0.994 −0.840 6.647 C −60.250 0.122 C
D 1 0.925 0.946 2.603 11.578 D 0.122 0.277 I
E 1 0.853 0.895 0.491 0.815 D 0.122 0.277 I
F 1 1 1 11.932 11.932 D 0.010 0.403 I
G 1 0.845 0.89 0.520 6.202 D 0.046 0.046 I
H 1 0.825 0.875 0.415 1.444 D 0.085 0.085 I
Returns to scale Strategy Damages to scale Strategy
(RTS) (DTS)
Increasing (I) Increase the current operational size Increasing (I) Decrease current operational size. There is a need to introduce new management and/
or a new production facility to decrease undesirable output
Constant (C) Maintain current operational size Constant (C) It is acceptable to maintain current operational size
Decreasing (D) Decrease current operational size Decreasing (D) It is acceptable to increase current operational size
Note: *Indicates optimality condition
Source: Sueyoshi and Goto (2011)
 1
0.98
An
0.96 investigation
Efficiency score

0.94
0.92
on lean–green
0.9
0.88
performance
0.86
0.84
0.82 505
0.8
A B C D E F G H A B C D E F G H A B C D E F G H

Operational (Lean) Environmental (Green) Unified (Lean–Green)

Avg. efficiency score

1.000
0.980
0.960
0.940 Figure 4.
0.920 Efficiency scores
0.900 and average efficiency
2012–2013 2013–2014 2014–2015 scores of eight
Operational Environmental Unified case SMEs
(Lean) (Green) (Lean–Green)

certification and lean and green manufacturing practices implementation level. This analysis
was performed by reading, coding and interpretation of the transcribed personal interviews
and plant level visit observation notes ( Jayaram et al., 2014):
P1. Organizational factors are positively related to SMEs’ operational and environmental
performance.
The present study indicated that in SMEs, top management in the form of owner-manager
of the organization plays a key role in enhancing the overall performance and
competitiveness of the business. Top management commitment and positive attitude lead
to invoking strategic decisions in the form of more investment in new technology and
innovation through R&D activities, use of IT and ERP tools to improve inter-departmental
coordination and also coordination with suppliers. Moreover, such organizations attempt to
enhance the skill and expertize of their human resources through training programs and
also take initiatives to implement various process improvement tools/techniques. In the
reverse case, pessimistic attitude and casual approach of top management lead to poor
coordination with suppliers and OEMs resulting in inventory pileup, poor delivery and
quality performance which stimulates customer dissatisfaction. Product and process
innovation is the key element for business survival in the current competitive market.
In India, Government initiatives like LMCS and environmental certification reimbursement
scheme financially support SMEs to implement lean and green practices with the objective
to improve quality, cost, delivery and environmental performance of SMEs (Thanki and
Thakkar, 2014).
Primary data analyses in three cases (Company B, C and F) indicate that the approach
and attitude of top management toward the growth of the organization was positive.
In Company B, the owner-manager was actively involved in the strategic and tactical
decision-making process. Because of his vision and the availability of finance, the company
invested substantially in new technology and internal R&D activities and received best
MSME award for outstanding performance in innovation technology by Government of
Gujarat state, India. The company was also collaborating with a large organization for
process excellence and for training and skill development of the employees. Although, the
company had not participated in government scheme and programs, but implemented
process excellence tools through a private consultancy firm. Company F is working in a
IJPPM well-established organizational structure having highly experienced managers at various
69,3 departmental levels. The company invested fairly in new technology and also developed
in-house bearing testing facilities due to its financial capabilities. Internal communication
through quality circle activities and regular well-planned training sessions for employees
was a key feature of the company. The company was strategically engaged with NSK Ltd
(one of the largest bearing manufacturing companies in the world) for improving its product
506 and manufacturing process, imparting training during regular visits of resource personals
from NSK Ltd and implementation of total quality management. In the case Company E, we
found varied correlations. The company’s CEO had a positive attitude toward growth,
however, its level of environmental (green) and unified (lean–green) performance was low.
On further probe, it was found that the company’s financial capability was not sound. In the
absence of enough capital, the company was struggling to invest in new technology and
innovation. Although the company had participated very actively in government scheme for
implementing lean manufacturing tools, involvement with suppliers and OEMs were
lagging factor.
From these analyses, we believe that besides top management commitment, the
company’s financial capabilities play a key role in the other organizational factors under
investigation. Only committed top management may not influence the firm’s performance,
the financial capabilities act as the critical intermediate factor for activating other
influencing factors. Table VI indicates the operational and environmental performance of
each SMEs obtained by DEA against eight organizational factors. In light of this analysis,
the following induction is offered:
• Induction 1: SMEs having committed top management and financial capabilities
excel in their operational and environmental performance through the enablement of
other internal organizational factors.
P2. Acquisition of quality and environmental management certification is positively
related to SMEs operational and environmental performance.
Feng et al. (2007) indicated that most organizations acquire ISO 9001 certification mainly
due to external factors like marketing advantages, customer expectation and competitive
pressure. Moreover, this empirical study also confirmed that ISO 9001 implementation has
positive and significant influence of the firm’s operational performance. According to
SitkiIlkay and Aslan (2012), organizations who implement ISO 9001 due to internal
motivations perform better than those due to external pressure. The present investigation
found that all eight SMEs under investigation have implemented ISO 9001, but only two
SMEs have implemented environmental management standard ISO 14001. The DEA results
indicate that SMEs who implemented ISO 14001 along with ISO 9001 have outperformed in
both, operational and environmental performances as presented in Table VII. However,
ISO 9001 certification is not contributing to enhancing environmental performance. In
Company “C,” the organizational factors like top management commitment, investment in
innovation, use of IT/ERP, skill and expertize of employee were found with the moderate
level while participation in government schemes was completely absent. But, Company “C”
was able to perform exceedingly well in the environmental frontier. During the interview
with company’s production manager, he indicated that as the company had acquired ISO
14001 certification and due technical and skill training obtained by the managers and
employees during the certification process had allowed to improve the environmental
parameters of the company. Only exceptional case was organization B with excellent
performances in both the dimensions. The company was able to achieve this through
investing in new technology and equipment up-gradation for the reduction in solid waste
generation and improvement in utilization of raw material during sheet cutting operation.
 Company
An
Constructs A B C D E F G H investigation
on lean–green
Organizational factors
Top management commitment P E M M E E M M performance
Investment in innovation P E M P M E P P
Collaboration with suppliers M E P M M E P M
Collaboration with OEM M E E P E E E P 507
Use of IT/ERP P E M P M E M M
Participation in govt. scheme/ A P A M E A A A
support
Internal communication M E M M E E M M
Skill and expertize of employees M E M M M E M M
Quality/environmental certification
ISO 9001 | | | | | | | |
ISO 14001 | |
Lean practices implementation level
5S M E M M M E E E
Kaizen P E M M M E E E
Visual control P E E A P M A A
TPM A M E P M M P A
SMED A A A P M E A A
VSM A A A P E M A A
Green practices implementation level
GSCM P A A A A P A A
3R A M A A M E M E
OUNR A A E E A E A P
DFE M E E A P M A A
Average efficiency for three FYs (2012–2013, 2013–2014, 2014–2015)
Operational 0.987 1 (1) 1 (1) 1 (1) 1 (1) 1 (1) 1 (1) 0.942
(2) (3)
Environmental 0.909 0.999 0.997 0.934 0.856 1 (1) 0.848 0.931
(6) (2) (3) (4) (7) (8) (5) Table VII.
Unified 0.923 0.997 0.998 0.953 0.897 0.981 0.891 0.855 Comparison of case
(5) (2) (1) (4) (6) (3) (7) (8) SMEs against select
Notes: E, excellent; M, moderate; P, poor; A, absent constructs

Organization B had also developed an excellent facility and infrastructure for innovation in
process and product. This was evident as the company had received best MEME award for
outstanding performance in innovation technology by Government of Gujarat state, India.
As an outcome, we deliver the following induction for the purpose of further investigation:
• Induction 2: ISO 9001 certification positively influences the operational performance
of SMEs, but its influence on environmental performance is not significant.
Implementation of ISO 9001 as well as ISO 14001 certifications ensures excellent
operational and environmental performance.
P3. Implementation of lean manufacturing practices is positively related to SMEs
operational and environmental performance.
The positive influence of lean practices on firm’s operational performance is well documented
in the literature (Shah and Ward, 2003; Rahman et al., 2010; Thanki et al., 2016). This study
also attempts to investigate the impact of lean practices on a firm’s environmental
performance. The case study analysis suggests that most SMEs have predominately
IJPPM implemented lean practices such as 5S, Kaizen, while practices like SMED and VSM have poor
69,3 implementation status. Table VII reveals that SMEs with higher level implementation of lean
practices such as 5S, Kaizen, Visual control and TPM have surpassed not only in operational
dimension but also performed exceedingly well in the environmental dimension. During the
discussion with the managers of the SMEs, they indicated that lean manufacturing practices
also have impacts like reduction in energy consumption as lean reduces inventory level which
508 reduces energy consumption at stores, reduction in defects and so reduction in scarp and
rework and improved plan layout reduces movement of material and so reduces energy
consumption. With this discussion, we offer the following induction:
• Induction 3: Implementation of lean practices such as 5S, Kaizen, Visual control and
TPM positively influences operational and environmental performance of the SMEs.
P4. Implementation of green manufacturing practices is positively related to SMEs
operational and environmental performance.
During the interview with owner-manager of one of the SMEs, he revealed that the
implementation of green manufacturing practices needs a significant amount of capital
investment at the initial stage and may have a negative influence on operational
performance. But, at the long run, it is beneficial and enhances the business performance of
the organization in terms of highly satisfied customers, improved market image and thus
profitability. In this empirical study, most SMEs had a poor level of green practices
implementation. Three SMEs had implemented selected green practices like 3R, DFE and
OUNR. One good initiative observed in all case SMEs was that they had replaced their old
lighting systems with energy-saving lights. Based on the case study analysis and DEA
results reported in Table VI, the following induction is offered:
• Induction 4: Implementation of green practices such as 3R, OUNR and DFE positively
influences the environmental performance of the SMEs.
P5. SMEs operational performance and environmental performance are negatively
related to each other.
Figure 4 indicates that the operational performance of SMEs has a significant decline in the
year 2013–2014 in comparison to the previous year, i.e. 2012–2013. The discussion with
managers and owners of the SMEs disclosed that during this span, most organizations were
attempting to improve their environmental performance due to government strict guidelines
and environmental regulations. This had adversely affected the operational performance.
This might be that fact that improvement in environmental performance calls for decrease
in amount of undesirable output. Under the strict government regulations, if firms opt to
decrease the amount of inputs to control undesirable output quantity, it adversely affects
the operational performance due to a simultaneous reduction in desirable output. Moreover,
company leaders also indicated that organizations trying to increase their operational size
by increasing production capacity and customer base to meet the market demand, they end
up with adverse impact on the environmental performance. A classic example is Company
“B.” In FY 2012–2013, the company was not heading the environmental efficiency and
unified efficiency frontiers though performing excellent on operational efficiency. In FY
2013–2014, the company had purchased a new highly sophisticated metal sheet cutting
machine to improve the utilization of raw material through reduction in metal scrap. The
impact of this strategic decision of investing in new technology can be seen on DEA results.
In FY 2013–2014, the company was leading both, operational and environmental efficiency
frontier. The decline in unified efficiency might be due to the huge investment the company
made in this technological up-gradation. But, in next FY, i.e. 2014–2015, the company was
able to lead all three efficiency frontier. This suggests that, if SMEs try to improve their
environmental efficiency due to stringent government regulations, it may have a negative An
impact on their operational performance. SMEs need to invest in technological innovation investigation
and adopt manufacturing excellence practices to improve environmental performance on lean–green
without compromising on their operational performance. In view of this, we outline the
following induction: performance
• Induction 5: SME’s efforts toward environmental performance improvement have a
negative influence on its operational performance in the absence of technology 509
innovation and process excellence initiatives.
It is noteworthy to mention that the study conducted by Thanki et al. (2016) on investigation of
lean–green implementation practices in Indian SMEs using analytical hierarchy process
approach has primarily focused on evaluating the impact of various paradigms such as lean,
green and integrated lean–green practices on overall performance of SMEs. This has primarily
delivered the priority of various lean and green practices toward SMEs business performance
and evaluated the contribution of both lean and green practices in improving the business
performance. The research reported in this paper has gone into a deeper investigation and
extended threefold contributions to the present body of knowledge. First, it has expanded the
boundary of lean–green implementation in SMEs by considering organizational factors and
certification requirements. Second, it has employed a detailed analysis using integrated
approach of multiple case study and DEA for the verification of the five propositions. Finally,
the paper has derived key inductions based on the insights gained from the analysis.

6. Theoretical and managerial implications

This research makes a few contributions to the present body of knowledge. First, an
investigation on lean, green and integrated lean–green has received limited attention,
specifically, for the context of developing country like India. The finding of this paper has
strengthened the state-of-the-art in this domain. Second, this work can be seen as the first
attempt for analyzing the relative efficiency of Indian SMEs in the manufacturing sector on
lean–green dimensions. Third, the growing attention on triple bottom line (TBL) sustainability
and stringent norms devised by international organizations for developing countries have put
the SME sector which contributes significantly toward the economic growth of the nation under
tremendous pressure. The Manufacturing sector needs to be competitive on both operational
and environmental form and simultaneously improve upon their TBL sustainability. This study
examines the present theory for lean–green implementation in SMEs and derives five key
inductions for improving their orientation on such paradigms. The study extends the utility of
the results for the developing country context by employing RTS and DTS analysis.
Indian SMEs are in the nascent stage of adopting lean and green practices. It is difficult
for them to understand and realize the importance of synergy involved in integrated lean
and green paradigms. An organization advances in its organizational practices from a state
of unknown to known through various adoptions stages such as clerical, mechanical,
proactive and world-class. This study attempts to deliver select policy recommendations for
Indian SMEs to improve their operational and environmental performance:
• The SMEs studied in the present research are found making inadequate efforts in
expanding their business in international markets and working in collaboration with
other organizations at the same level of supply chain as well with the OEMs. Due to
this lack of exposer, the SMEs are not looking at technological, operational and
administrative up-gradation. Moreover, SMEs are not investing enough in R&D
activities and innovation. With the support of large organizations, SMEs can be
benefited through technological up-gradation, collaboration in product development,
process improvement initiatives and worker’s training and skill development.
IJPPM • Although Indian Government has launched many schemes and programs such as
69,3 LMCS and ISO-9000/14001/HACCP Certification Reimbursement Scheme with the
objective of increasing competitiveness of MSMEs through improvement in operational
and environmental measures, the SMEs studied in this research are showing lack of
awareness about such initiatives. Only two SMEs have participated in such schemes.
This call for launching quite a good number of awareness programs by government to
510 make SME leaders understand the benefits of active involvement in such schemes.
• In SME environment, with low flexibility and high uncertainty, adoption of internet
and communication technology can provide an upper edge. According to Alshamaila
et al. (2013), by the adoption of cloud computing technology, SMEs can realize the
benefits in terms of cost-saving, access to the large pool of hardware resources,
enhanced information sharing and collaboration with suppliers and OEMs and faster
time to market. These benefits make SMEs more competitive, and also improve their
operational performance.
The results on RTS in operational efficiency and DTS in environmental efficiency for case
SMEs are presented in Table VI. According to Sueyoshi and Goto (2011), increasing RTS in
operational performance of the firm indicates that the desirable output increases in more
proposition in comparison to a unit increase in inputs while decreasing RTS suggest
proportionally less increase in output. A firm with increasing RTS becomes more productive
with an increase in operational size while decreasing RTS declines the firms operational
performance. In the case of DTS, increasing DTS indicates that undesirable output increases
more proportionally than a unit increase in inputs. Therefore, it is preferable for organizations,
with increasing DTS, to reduce its operational size to enhance its environmental performance.
Table VII suggests various strategies depending upon the RTS and DTS position of the firm.
Based on the RTS and DTS results as summarized in Table VII, the following policy
implications are suggested.
Results indicate that Company “C” exhibits constant RTS in years 2012–2013 and
2014–2015, while Company “E” shows increasing RTS for years 2012–2013 and 2013–2014. All
the other SMEs belong to decreasing RTS for three consecutive FYs. The results of DTS suggest
that all the SMEs belong to increasing DTS with the exception of Company “H” belonging to
constant DTS for the year 2013–2014 along with “B” and “C” for the year 2014–2015.
The computational results for the year 2014–2015 imply that most SMEs belong to
decreasing RTS and increasing DTS with the exception of SME “C,” whereas no SME falls
in the category of increasing RTS and decreasing DTS:
• As Indian manufacturing SMEs contribute significantly in country’s economic and
social development, it is not practical to scale down the operational size of firms. The
increasing DTS and decreasing RTS suggest that Indian SMEs need to attain the
improvement in their operational and environmental performance if they wish to at-least
maintain their existing operational size. The important strategy for Indian SMEs is to go
for radical technological and managerial transformation to elevate their existing status.
Technology innovation helps to improve the environmental and environmental
performance of the organization (Sueyoshi and Goto, 2012). Indian SMEs should
strategically decide in acquiring the leading-edge technologies such as computer-aided
design and manufacturing, material requirement planning, process planning and project
management tools, flexible manufacturing systems, etc., within the existing facility.

7. Conclusions and future research directions

Through this study, our contribution to the field of integrated lean and green manufacturing
is by delivering a research framework highlighting key propositions and subsequently
verifying them by combining qualitative and quantitative analysis. This has resulted into An
set of inductions which are extensively useful for the Indian SMEs in improving their investigation
adoption to integrated lean and green practices. The inductions offered by this research also on lean–green
set new research directions for the contemporary research and motivates to deepen inquiry
into the suggested areas. performance
An in-depth study and analysis of how manufacturing SMEs enhance the performance in
operational and environmental dimensions would facilitate to the future research to fill few 511
gaps in the existing state of research in the area of lean and green integration. The
contributions of this study are expected to benefit in the following manner:
• The results may help SME’s decision-makers to have more focused approach and actions
to leverage the available resources toward improving the organization’s performance.
• The results of this study are useful to owners and managers of SMEs to understand
the impact of various manufacturing excellence practices like lean and green in
regard to firm’s operational and environmental performance. For example, lean
practices such as 5S, Kaizen, TPM and Visual control have a positive influence on
operational and environmental performance of SMEs. However, green practices
influence largely the environmental performance.
• The research will benefit the researchers to understand the mutual relationship
between firm’s operational and environmental performance and extend it for more
empirical evidence.
The present research is also not free from limitations. The sample size used for this study is
comparatively small to investigate the influencing relationships of the select constructs.
Moreover, the present exploratory study was limited to SMEs in the manufacturing sector
having specific characteristics. Considering the limited sample size and nature of
organizations studied, the generalization of results requires at-most care. There might be
other characteristic which can influence the results and for deeper understanding of
influences, it is recommended to statistically validate the influencing relationships with a
large sample using methodology like structural equation modeling.
As a final remark, despite the high impact of the lean–green practices on manufacturing
industry typically SMEs, this is still an area which requires much research to explore its true
potential in the industrial context. Operational and business loses go unnoticed in Indian
manufacturing SMEs; and hence, such research would aid industry experts and managers
in SMEs in measuring synergistic impact of lean and green practices on financial and
operational performance of the firm. This will also help them to benchmark their efficiencies
with SMEs both domestically and abroad.

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About the authors

Shashank Thanki is Associate Professor in Operations Management area at Institute
of Management, Nirma University, Ahmedabad, Gujarat, India. His educational
qualifications include PhD in the area of Lean and Green Manufacturing from
Department of Industrial and Systems Engineering, IIT Kharagpur in year 2017,
Bachelor’s Degree in Production Engineering and Master’s Degree in Mechanical
Engineering from S.V. Regional College of Engineering and Technology, Surat (now
known as National Institute of Technology, Surat) in 1997 and 2001, respectively.
His publications have appeared in international peer reviewed journals like Journal of Cleaner
Production, Production Planning and Control, Journal of Manufacturing Technology, International
Journal of Productivity and Performance Management, Journal of Material Processing Technology, etc.
Shashank Thanki is the corresponding author and can be contacted at: shashankthanki@yahoo.com
Jitesh J. Thakkar is Faculty in the Department of Industrial and Systems Engineering
at Indian Institute of Technology Kharagpur, India. His educational qualifications
include PhD in Supply Chain Management from Indian Institute of Technology Delhi,
Master in Technology in Industrial Engineering from Indian Institute of Technology
Delhi and Bachelors in Mechanical Engineering with Gold Medal from Birla
Vishwakarma Mahavidyalaya, Sardar Patel University, Gujarat. His publications
have appeared in Production Planning and Control, Computer and Industrial
Engineering, Journal of Cleaner Production, International Journal of Advanced Manufacturing
Technology, International Journal of Productivity and Performance Management, International Journal
of Six Sigma and Competitive Advantage, Journal of Manufacturing Technology Management, Journal
of Small Business and Enterprise Development, etc.

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