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Cooperation
Cooperation in the supply chain in the supply
and lean production adoption chain
Evidence from the Spanish
automotive industry 1075
José Moyano-Fuentes
Department of Business Organization, Marketing and Sociology,
University of Jaén, Linares, Spain
Macarena Sacristán-Dı́az
Department of Financial Economics and Operations Management,
University of Seville, Sevilla, Spain, and
Pedro José Martı́nez-Jurado
Department of Business Organization, Marketing and Sociology,
University of Jaén, Linares, Spain

Abstract
Purpose – The purpose of this paper is to empirically examine the impact of the level of cooperation
in the supply chain on lean production (LP) adoption. The effect of the level of cooperation with both
suppliers and customers with regards to the intensity of LP adoption is examined, as is the joint effect
of cooperation and information integration with customers.
Design/methodology/approach – Analysis is carried out on a sample of 84 manufacturing plants
that are first tier suppliers to original equipment manufacturers in the Spanish automotive industry.
Data were gathered from plant CEOs via a combination of regular mail, e-mail and internet-based
survey methods. Data are analyzed using exploratory factor analysis and hierarchical regression.
Findings – The results show that while greater levels of cooperation with suppliers do not impact on
the intensity of LP adoption, greater levels of cooperation with customers do have a significant effect.
Also, the greater the cooperation with customers and the more information integrated with them, the
higher the intensity of LP adoption.
Research limitations/implications – The findings stress the importance of having a holistic
vision of the supply chain to explain the degree of LP adoption. Further developments include
simultaneously studying the role of both information and physical flows along the supply chain in LP
adoption, and analyzing the time lag that occurs between a company increasing cooperation with
suppliers and customers, and progress being made in the intensity of LP adoption.
Practical implications – Practitioners must be mindful that a greater level of cooperation with
customers creates a favourable environment for increasing the intensity of adoption of LP.
Originality/value – This paper contributes to research on the explanatory factors of LP adoption by
adding new factors to explain it, including the level of cooperation between supply chain agents and
the interaction of information integration and cooperation with customers.
Keywords Spain, Automotive industry, Lean production, Cooperation with suppliers,
Cooperation with customers, Information integration
International Journal of Operations
Paper type Research paper & Production Management
Vol. 32 No. 9, 2012
pp. 1075-1096
q Emerald Group Publishing Limited
This study was funded by the research projects P08-SEJ3607 and ECO2010-22105-C03-02 of the 0144-3577
Andalusian Regional Government and the Spanish Ministry of Economy and Competitiveness. DOI 10.1108/01443571211265701
IJOPM 1. Introduction
32,9 Lean production (LP) is an integrated socio-technical system whose main objective is to
eliminate waste by concurrently reducing or minimizing supplier, customer, and
internal variability (Shah and Ward, 2007). However, it is not enough to focus on
manufacturing operations to achieve these objectives; LP must be extended to product
development and aspects of distribution and supply chain management (Holweg, 2007).
1076 Companies that want to move forward in adopting LP must therefore manage
variable supply, processing times and demand (Hopp and Spearman, 2004; de Treville
and Antonakis, 2006), and also manage relationships in the value chain (Shah and Ward,
2007). In fact, LP recognizes the importance of the vertical links between a company’s
value chain and its suppliers’ and channel members’ value chains (Mason-Jones et al.,
2000). These links are extremely important since, as Panizzolo (1998) states, the most
critical factor for LP adoption is the management of external relationships, rather than
the internal operations of the company. Indeed, high performance in LP is indicative of a
well-structured, well-developed and highly involved supply relationship between
suppliers and customers; that is, the success of LP adoption depends on managing the
relationships with the partners in the chain. However, there has been scant research
conducted on analyzing the impact of supplier-customer relationships (Simpson and
Power, 2005; Jayaram et al., 2008).
In this respect, Simpson and Power (2005) found that relational supplier-customer
links have a positive influence on LP adoption by the supplier, and proposed a line for
future research regarding the fact that these links would also have a positive influence
on the implementation of LP. However, as far as the authors of the present paper are
concerned, little empirical evidence exists regarding the influence of coordination with
supply partners on the extent to which a company implements lean practices. Some
evidence exists, for example, regarding the importance of coordination mechanisms for
suppliers and customers in terms of the improvement of manufacturing lead time and
delivery speed and reliability (Da Silveira and Arkader, 2007). These are the same
objectives as those sought by LP, and consequently these findings pave the way for
investigating whether more advanced coordination with customers and suppliers might
impact on advances in LP adoption. For their part, Jayaram et al. (2008) emphasize that a
company’s commitment to LP should be preceded by the building of close relationships
with supply chain agents. Their results show that building these relationships with
suppliers and customers drives lean strategy. However, their research analyzes LP from
a strategic perspective that is focused on product and process design, and uses a rather
biased concept of LP in which indicators of some of the practices widely accepted to be
connected with LP adoption, such as total productive maintenance (TPM), total quality
management (TQM) and human resource management (HRM), are not included.
Nonetheless, the impact that building close relationships with supply chain agents has
on the development or progress of LP at the operational level has not been studied to date.
As a result, this article tries to fill this gap in the literature, and deals with the effects that
developing relationships with chain agents might have on the intensity of LP adoption.
In an attempt to add some empirical evidence to this as-yet insufficiently supported
issue, a holistic concept of LP is used, which includes its commonly accepted practices:
just in time ( JIT), TQM, TPM and HRM. Using the exploratory findings of Simpson
and Power (2005) and Jayaram et al. (2008) as a starting point, this paper goes one step
further and analyzes the relationship between the development of cooperative links
with suppliers and customers and the intensity of LP adoption – that is, the authors try Cooperation
to explain how LP adoption can be improved by developing coordination with chain in the supply
partners. This paper argues that institutional theory (DiMaggio and Powell, 1983) is a
useful approach in explaining the intensity of LP adoption in organizations. Previously, chain
this theory was used to help to explain the adoption of TQM (Westphal et al., 1997; Ford,
2011), inter-organizational linkages (Teo et al., 2003) and Six Sigma (Braunscheidel et al.,
2011). In this paper, a research is carried out into the mechanism of institutional 1077
isomorphic change by which firms that collaborate with their supply chain agents would
be more likely to improve LP adoption. As a result, the first research question is
formulated as follows:
RQ1. Does the level of cooperation in the supply chain have an impact on the
intensity of LP adoption?
On the other hand, Jayaram et al. (2004) find that structural factors, such as the building of
a relationship with trading partners, facilitate value creation along the supply chain
through the use of coordination mechanisms, such as internal and external integration. In
line with this, Stank et al. (1999) and Gunasekaran and Ngai (2004) point out that efficient
and effective information sharing between chain agents is essential in order to achieve
supply chain integration, and the improved results that arise from this. Devaraj et al.
(2007) indicate the importance of information flows in relation to demand-oriented
production information exchange, which are underpinned by collaboration efforts that
result in the increased accuracy of information about production. For this reason, it is
interesting to examine the integration practices adopted by companies that include
information transfers or develop production activities and synchronization between
suppliers and customers. Companies use management systems to improve supply chain
integration, however there is no research devoted to directly analyzing the relationship
between supply chain information integration and LP adoption. This paper focuses on
how information integration with customers, specifically between first tier suppliers and
OEMs, affects the degree or intensity of LP adoption of the former. Thus, the second
research question is established as follows:
RQ2. What effect does interaction between cooperation and information integration
with customers have on LP adoption?
In order to address both research questions, we developed an empirical study based on
a survey given to first tier auto component supplier managerial staff. The article is
organized into five parts starting with this introduction. The second part is devoted to
the theoretical background of this research, and to formulating the hypotheses. The
methodology used is subsequently described. Next, the results obtained are discussed
and, finally, conclusions are drawn and the challenges that can be tackled by future
research are set out.

2. Theoretical background and research hypotheses

2.1 Lean production
Since LP became widespread (Womack et al., 1990), there have been clear moves towards
adopting the principles on which this management system is based. These affect
companies not only internally, but also with regard to their external organization
(Shah and Ward, 2007).
IJOPM Broadly speaking, LP has been described from two perspectives: the first is more
32,9 philosophical and is linked to the guiding principles and general objectives, while the
second is more practical, and is related to the management tools and techniques of
which it is comprised (Hopp and Spearman, 2004). The goal pursued within this
management system is maximum efficiency, with operations conducted at the
minimum cost and with zero wastage. For this, the variability of the system as a whole
1078 needs to be minimized (de Treville and Antonakis, 2006; Shah and Ward, 2007), and LP
companies need to adopt a management philosophy based on continual improvement
that allows results to be improved, and involves all levels of the organization
(Womack et al., 1990; Womack and Jones, 1996).
The basic principles of LP translate into a series of bundles of practices. There is a
broad consensus that the most characteristic bundles of practices connected with LP
adoption are:
.
JIT;
.
TPM;
.
TQM; and
.
HRM (Shah and Ward, 2003; Cagliano et al., 2006; Narasimhan et al., 2006;
Shah et al., 2008).

As a result, and in line with the greater detail provided in the section below devoted to
measures, the “intensity of LP adoption” construct used in this research as a dependent
variable will be considered as the degree or extent to which some indicators of these
practices are implemented in the companies analyzed.

2.2 Level of cooperation in the supply chain, and LP adoption

LP aims to integrate all the activities that affect goods and services delivered to
customers, including those delivered by both the company itself and external suppliers
(Womack and Jones, 1996). LP practices have come to be very important aspects of
effective supply chain management in terms of cost saving and responding to
customers’ needs (Mason-Jones and Towill, 1999; Handfield and Nichols, 1999,
Chapter 4; Li et al., 2005). Nevertheless, the success of LP depends more on managing
supply chain relationships than on internal operations (Panizzolo, 1998).
With regards to relationships with suppliers, there is ample empirical evidence that
recognizes the importance of developing close, long-term cooperative relationships
(Lamming, 1993, Chapter 6; Jones et al., 1997; MacDuffie and Helper, 1997; Sako and
Helper, 1998). To be precise, adopting LP has sparked a change in companies’ purchasing
philosophies and policies, and these are now based on a greater degree of confidence in
supplier relationships (Helper and Sako, 1995; Sako and Helper, 1998). Similarly, LP
adoption has led to a new concept of relationships with customers, which is also based on
long-term cooperation agreements (Jones et al., 1997). Companies must adopt a proactive
approach to customer service and be prepared to exceed customer expectations.
In short, to move forward in LP adoption, companies have to establish relationships
with suppliers and customers based on confidence and a high level of motivation to
learn, and which allow knowledge to be shared freely (MacDuffie and Helper, 1997). By
this means, companies can operate via what authors call the “lean supply chain” –
a system that enables costs to be reduced, flexibility to be increased and substantial
improvements in products to be made (Vonderembse et al., 2006). However, there is still Cooperation
little empirical research on the subject (Simpson and Power, 2005; Jayaram et al., 2008). in the supply
Jayaram et al. (2008) find that a lean strategy should be preceded by the forging of
relationships with the main supply chain partners. Simpson and Power (2005) state chain
that the results obtained with LP depend on the extent to which knowledge is shared in
supplier-customer relationships. On the basis of these results, it is fair to consider the
influence that the strengthening or development of relationships with trading partners 1079
might have on the intensity of LP adoption. More specifically, the impact that the
degree of cooperation with trading partners has on the intensity of LP adoption needs
to be investigated in greater depth.
On the other hand, the pressure of supply chain members has a positive
relationship with the supply chain technology adoption, and with the adoption of
inter-organizational information systems (Iacovou et al., 1995; Kamaruddin and Udin,
2009). Pressure from members, also known as channel power, is defined as “the influence
one channel member has over another channel member” (Williams, 1994). Supply
chain member pressure can be categorized as an inter-organizational factor.
Inter-organizational means the cooperation and commitment of all participating
members. These participants may have complex economic and business relationships
with each other, which result in a number of social, political and economic factors
influencing the adoption of inter-organizational systems (IOS) (Premkumar et al., 1997).
An inter-organizational factor that may influence the intensity of LP adoption is coercive
pressure from supply chain members.
According to institutional theory, organizations faced with the same environmental
conditions adopt the same structures and ways of working, which forces one unit in a
population to resemble other units that face the same set of environmental conditions
(DiMaggio and Powell, 1983). One of the mechanisms that explains these similarities is
coercive isomorphism, which implies that powerful organizations demand the adoption
of certain innovations (DiMaggio and Powell, 1983). As Braunscheidel et al. (2011)
indicate with regard to the adoption of Six Sigma, an example of coercive isomorphism
would be the customer requirement that a supplier adopts and implements LP – , i.e. the
customer insists on the adoption of LP as a condition for doing business. Moreover, the
customer’s perception of the success of LP may also then motivate that customer to
pressure the suppliers with whom it cooperates to adopt LP.
In addition, with regards to the major changes that come along with the adoption of
LP, collaboration with other agents in the chain could help to increase the intensity of
adoption, thanks to the availability of technical, human and financial resources and to
the mutual benefits that could be derived from such collaboration.
Combining all this reasoning, the following two hypotheses relating to the level of
cooperation among the agents in the supply chain and the intensity of LP adoption are
put forward:
H1. Greater cooperation with suppliers is positively related to the intensity of LP
adoption.
H2. Greater cooperation with customers is positively related to the intensity of LP
adoption.
Figure 1 shows the hypothesized links between aspects relating to cooperation with
suppliers and customers, and the intensity of LP adoption.
IJOPM 2.3 Cooperation and information integration with customers, and LP adoption
32,9 Companies are improving their competitiveness not only through the integration and
strategic alignment of internal processes, but also through process integration and
alignment between companies (Cagliano et al., 2006). Supply chain integration therefore
plays a key role in competitiveness, and is related to the coordination mechanisms that
exist both inside and outside company boundaries (Frohlich and Westbrook, 2001;
1080 Romano, 2003).
In order to achieve supply chain integration, a great management effort is required
to link and coordinate chain processes related to information flows and physical flows
(Frohlich and Westbrook, 2001; Romano, 2003). Jayaram et al. (2004) find that building
relationships with trading partners facilitates the creation of value through the use of
coordination mechanisms like supply chain integration. One basic step for improving
results from supply chain integration is effective and efficient information sharing
among supply chain agents (Stank et al., 1999; Gunasekaran and Ngai, 2004).
Specifically, the transfer of production-related information from the customer to the
supplier means that the latter’s operations can be better adapted to the customers’
needs. Suppliers can put policies in place to contend with variability in demand and
balance production and demand, and so reduce inventories along the chain (Harrison
and van Hoek, 2002, Chapter 8; Disney and Towill, 2003).
Variability in demand can be attributed to a lack of trust between the agents in the
supply chain, which creates an information shortage. This triggers management
problems, such as excess inventories, unsatisfied demand, high delivery times, etc. that
impact negatively on the ultimate aim of achieving the maximum satisfaction of the
end customer. New chain structures based on cooperation strategies between chain
members can be used to reduce this variability (e.g. VMI or vendor management
inventory). Information sharing and trust between chain members play an important
role in the adoption of these strategies (Barratt, 2004; Petersen et al., 2005). In fact,
inter-organizational trust between customers and suppliers has a determining effect on
cooperation between them (Kim et al., 2010). More specifically, it is important that
downstream chain members share their information effectively and efficiently with
upstream members (Chu and Lee, 2006).
Sharing information on demand with suppliers enables companies to establish their
production or purchasing programme, whilst also calculating automatic inventory
restocking for the customer. This gives customers a better balance between excess
inventory and missed sales, whilst reducing supplier uncertainty and giving the
supplier greater flexibility (Disney and Towill, 2003; Holweg et al., 2005).
Moreover, when information is shared about demand and inventory, the time

Cooperation
with suppliers H1

Intensity of
LP adoption
Figure 1.
Hypothesized Cooperation H2
relationships between with customers
cooperation/LP adoption
between the order being placed and the delivery being made is reduced (Cachon and Cooperation
Fisher, 2000; Lee et al., 2000). This translates into the ability to respond more quickly to in the supply
customer needs; the company is therefore more customer-oriented (Fisher et al., 2000),
and consequently more predisposed to cooperating with the customer. chain
Information sharing between companies is, precisely, the first step in chain
integration. However, what distinguishes successful companies from the “also-rans” is
their capacity for cooperation (Devaraj et al., 2007). A high degree of cooperation 1081
between customer and company will provide the basis for effective collaboration in
production planning and inventory management along the chain, thus allowing for
“pull” production and the adoption of joint decisions.
Rosenzweig et al. (2003), meanwhile, find that manufacturing capabilities mediate
the relationship between supply chain integration and business performance, which
supports coherency between external and internal processes. This means that there is a
link between external and internal integration practices. If these two lines of thought
are combined, the joint effect of cooperation and production information integration
could be expected to have a positive influence on the intensity of LP adoption.
Therefore, the third hypothesis is formulated as follows:
H3. The effect of interaction between cooperation with customers and information
integration with customers has a positive influence on the intensity of LP
adoption.
Figure 2 shows the hypothesized relationship between these constructs.

3. Methodology
3.1 Sample and data collection
There have been increases in the number and importance of relationships with suppliers
and customers in the automotive industry. These relationships are not confined to the
pursuit of short-term economic imperatives or cost reduction, but rather encompass
innovation in technology and creative – and joint – research and development, as well as
improvements in quality. The influences of globalization, the adoption of LP and the
development of modularization have all had profound influences on the relationship
between automobile assemblers and their suppliers – in particular those in the first tier
(Morris et al., 2004). First tier suppliers are in a strategic position in the supply chain, since
they are usually heavily involved in the strategy of automakers, and at the same time
are familiar with the fabric of second tier suppliers and the way in which the requirements
of automakers are passed on to them (Aláez-Aller and Longás-Garcı́a, 2010).

Cooperation
with customers

H3 Intensity of
LP adoption Figure 2.
Hypothesized relationship
Information of cooperation with
integration customers and
with customers information integration
with LP adoption
IJOPM For these reasons, the cooperation of these suppliers with their customers and suppliers
32,9 is crucial; without it, production sequence and programming bottlenecks could paralyze
the delivery programme.
This is why the hypotheses have been tested using data from a sample of
manufacturing plants which are first tier suppliers to original equipment manufacturers
(OEMs) in the Spanish automotive industry. The initial sample frame is from the database
1082 of the Spanish Automotive Equipment and Components Manufacturers Association
(SERNAUTO). SERNAUTO is the only Spanish association in the automotive sector
which includes all the equipment and component manufacturers in Spain. The
association’s staff draws up periodic reports and statistics about the situation regarding
the equipment and component manufacturing industry. To do this, SERNAUTO has built
up a database with information about the structural and organizational features of each of
the manufacturing plants in the industry. This database can be used for research purposes
with SERNAUTO’s authorization, and has frequently been used in prior literature
(Martı́nez-Sánchez and Pérez-Pérez, 2003; Lapiedra et al., 2004). SERNAUTO’s database is
made up (as of 31 December 2007) of a total of 216 manufacturing plants belonging to
74 different companies (first tier suppliers).
Before sending out the questionnaire, a draft version was tested with a panel of five
renowned researchers, along with three directors working for one of the most important
automotive components and equipment suppliers in the world with a presence in
22 countries. The questionnaires were sent to the aforementioned researchers and directors
by e-mail. A form was attached to the e-mail so that the directors and researchers could
include any relevant comments about item wording, content and order within the
questionnaire. All the forms were returned using the same means (e-mail) by the researchers
and directors after a phone follow-up and within the expected deadline. A pilot study was
then carried out in three different manufacturing plants to ensure that the definitions of
items were meaningful and comprehensive for the sample. This ensured content validity.
Since, according to Phillips (1981), high-ranking informants tend to be more reliable
sources of information than their lower-ranking counterparts, we targeted Chief
Executive Officers (CEOs) in order to ensure that the respondents were knowledgeable
of the intensity of LP adoption. In addition, in the letter that accompanied the
questionnaire, suggestions were made for the collaboration of other managers, where
necessary, for certain parts of the questionnaire. Finally, the director of operations took
part in ten cases and the director of human resources in 27 cases. This, and the fact that
anonymous answers from respondents were acceptable, were the procedures used to
reduce common method bias (CMB), as suggested by Podsakoff et al. (2003).
However, the use of self-reported data could constitute an important limitation.
Should this occur, CMB could augment relationships between the variables. In such a
case, conducting a Harman’s test would obtain a single general factor to account for
most of the covariance for the dependent and independent variables (Podsakoff and
Organ, 1986). Consequently, a Harman’s single factor test was performed to detect
possible CMB. The results of the unrotated factor analysis of 20 items indicated the
presence of four factors – the same number of factors included in our regression
models. Consequently, the results of the Harman’s single factor test indicate that the
sample lacked a significant presence of CMB.
The questionnaire was sent to the CEOs in January and February 2008 via a
combination of regular mail, e-mail and internet-based survey methods. Attached to the
questionnaire was an explanatory letter highlighting the purpose and aims of the study Cooperation
and asking the CEO to take part. The letter also mentioned that other directors were in the supply
participating in the survey.
After a telephone follow-up process, 84 fully completed questionnaires were chain
obtained, producing a response rate of 38.89 percent, almost doubling the 20 percent
established by some authors as an acceptable answer rate in OM research (Malhotra
and Grover, 1998; O’Leary-Kelly and Vokurka, 1998), and equal to that of similar 1083
studies on the subject in the automotive sector ( Jayaram et al., 2008).
The regional distribution of the plants in the sample is similar to the distribution of
the population as a whole. Most plants are located in the north of Spain (60.7 percent of
the sample compared to 64.9 percent of the population). The two regions with the
greatest presence of manufacturing plants, both in terms of population and in the
sample, are Catalonia (38 percent) and Castile and Leon (13 percent). The sample covers
different manufacturing activities related to the manufacturing and assembly of
components supplied to OEMs in the automotive industry. Table I shows the sample
and population distributions in terms of the most representative industrial activities.
The sample distribution corresponds broadly with that existing in the population.
With regard to distribution by sample size, small plants (up to 249 employees) account
for 41.7 percent of the sample, medium-sized plants (from 250 to 499 employees) account
for 34.5 percent, while large plants (from 500 employees up) account for 23.8 percent.
Finally, random telephone calls were made to plants that did not return the
questionnaire, with no evidence of any specific pattern explaining why companies failed
to respond or reasons for not doing so. In general, there does not seem to be a particular
kind of plant that was more likely to respond, thus reducing the non-response bias that
can occur in mailed surveys. Also, early versus late respondents were compared
(Armstrong and Overton, 1977), and no statistically significant differences were found in
any study variables (a ¼ 0.05).

3.2 Measures
A number of variables were used to measure the intensity of LP adoption, the degree of
cooperation with suppliers, the degree of cooperation with customers, and production
information integration with customers. A number of control variables were also
included.
To identify the level of cooperation with trading partners, the survey respondents were
asked about the degree of cooperation with suppliers and customers compared to the

Sample Population
ISIC Industry n % n %

343 Manufacture of parts and accessories for motor

vehicles and their engines 49 58.3 107 49.5
252 Manufacture of plastics products 11 13.1 26 12
319 Manufacture of other electrical equipment 6 7.1 13 6.1
289 Manufacture of other fabricated metal products,
metalworking service activities 6 7.1 10 4.6 Table I.
Other industries (22 industries) 12 14.4 60 27.8 Industry distribution of
Total 84 100 216 100 sample and population
IJOPM average for the industry using a seven-point Likert scale (1 – much less, 4 – about the
32,9 same, 7 – to a much greater extent). In addition, Heide and Miner’s (1992) idea of
measuring cooperation through cooperative behaviours was used. The answers were
subsequently grouped through exploratory factor analysis with varimax rotation in
order to identify the main underlying constructs. Two factors resulted; initial eigenvalues
were all higher than one, and the total variance explained was 67.9 percent. The results of
1084 this factor analysis are shown in Table II.
The first and second factors measure the level of cooperation with customers and
suppliers, respectively, based on the degree to which they are involved in new product
development, the extent to which long-term relationships with them have been
established, and their commitment to reducing costs on a yearly basis. Both constructs
comprise the elements that are normally used in the literature to define cooperation
with trading partners (Bensaou, 1997; Li et al., 2005; Kim et al., 2010).
For information integration, the respondents were asked about the degree to which
they agreed with a series of statements relating to production information integration
between their plants and customers using a seven-point Likert scale (where 1 – totally
disagree, 4 – neither agree nor disagree, 7 – totally agree). The factor analysis of these
items confirmed that only one factor existed (Table III). The percentage of variance
explained was 43.6 percent. This construct was measured on the basis of the
information that the customer gives the plant on production-related aspects
(Devaraj et al., 2007).
These three factors have been used as independent variables in regression models in
order to examine their influence on the intensity of LP adoption.
To this end, the respondents were asked about the degree to which a given LP practice
was implemented in the plant compared to the average for the industry using
a seven-point Likert scale (where 1 – much less than the competition, 4 – the same as the
competition, 7 – much more than the competition). The factor analysis of these items
confirmed that only one factor existed (Table IV). The percentage of variance explained
was 68.5 percent. This factor measures the adoption of LP practices through the
introduction of JIT, TPM and TQM, and some HRM practices, such as the development
of employees’ skills and work team incentives. This construct consists of the elements

Variable Factor Factor Cronbach’s

Factor Variable average loading average a

Cooperation We establish long-term relationships 4.7 0.87

with customers with our customers
The customers are directly involved in 4.5 0.58 4.7 0.7
the development of new products
Customers are committed by contract to 5.0 0.90
annual reductions of costs
Cooperation We establish long-term relationships 4.8 0.63
with suppliers with our suppliers
Table II. The suppliers are directly involved in 4.7 0.88 4.7 0.8
Factor analysis the development of new products
of cooperation with The suppliers are committed by contract 4.7 0.84
customers and suppliers to annual reductions of costs
 Cooperation
Variable Factor Factor Cronbach’s
Factor Variable average loading average a in the supply
Information Our plant receives sales forecast 5.4 0.51
chain
integration with information from its customers
customers
Our plant receives information from its 5.3 0.72 4.8 0.7 1085
customers about their Master Production
Programmes
Our plant receives sales forecast 4.0 0.59
information from its customers about the
state of their inventories
The customer collaborates with us to 5.0 0.69 Table III.
jointly develop the net component needs Factor analysis of
that we should deliver production information
Customers authorise our plant to 4.1 0.74 integration between
replenish components automatically company and customers

Variable Factor Factor Cronbach’s

Factor Variable average loading average a

LP Close location of machines and processes in 5.7 0.90

plant
Manufacturing cells 5.4 0.85
Layout permits low stocks and quick 5.2 0.73
manufacturing
TQM 5.1 0.57
Some time devoted to planned equipment 5.1 0.89 4.9 0.7
maintenance related activities everyday
Regular maintenance of all equipment 5.2 0.89
We use JIT 4.6 0.62
We are actively responsible for developing our 4.7 0.74
employees’ skills Table IV.
Not just individual incentives are established 3.3 0.88 Factor analysis of
but for the work team as a whole intensity of LP adoption

commonly used to define the concept of LP (Womack and Jones, 1996; Hines et al., 1997;
Shah and Ward, 2003; Cagliano et al., 2006; Narasimhan et al., 2006; Shah et al., 2008).
The validity of each of the constructs was tested. Convergent validity was
demonstrated by each factor having loadings in excess of 0.5 (Bagozzi and Yi, 1988), and
discriminant validity was also supported, since none of the variables had loadings of
higher than 0.4 on more than one factor (Fullerton and McWatters, 2001).
Construct validity was also supported by the existence of similar measures in the
literature (Spina and Zotteri, 2001). Internal consistency was tested using Cronbach’s a.
All the constructs had satisfactory alphas (a $ 0.7).
Control variables were also included in the regression models in order to control for
competitive, cost and structural factors used in the literature, with similar goals to those
of this research (Shah and Ward, 2003; Johnston and Wright, 2004; Cagliano et al., 2006).
The following specific control variables were used: number of employees (as a measure
IJOPM of plant size), purchasing costs as a percentage of total costs (as an approximate
32,9 measure of the degree of vertical integration in the plant), number of different products
(as a measure of plant diversification), number of suppliers (as a measure of the degree
of complexity of the company’s supply) and number of customers (as a measure of
customers’ bargaining power). In addition, we considered the suitability of including
the age of the plant (as a measure of years in operation) given the influence it could
1086 have on the intensity of LP adoption, as the older a plant is, the greater the opportunity
for close long-term supplier/customer relationships and, as a result, for greater
cooperation, which is one of the independent variables in our research. The influence of
plant age on LP adoption was analyzed in the study by Shah and Ward (2003), which
was subsequently referred to by Sousa and Voss (2008).
Table V presents the descriptive statistics and correlations between the variables
used in the analysis. The table shows that there are some significant correlations
between the dependent variables and the independent and control variables; as a result,
the latter will be taken into account in the subsequent analysis.

3.3 Model evaluation

Hierarchical regression analysis was used to test the hypotheses. This analysis allows
the variance percentage explained by each of the independent variables to be identified
separately (Pedhazur and Schmelkin, 1991, Chapter 18; Cagliano et al., 2006). Dividing
the variance through hierarchical regression analysis is the most appropriate
methodology when there are correlations between the independent variables, as seen
previously in Table V. To test H1 and H2, the independent variables were included
separately, one by one (Table VI), beginning with the control variables (Model 1). Next,
the variable relating to cooperation with suppliers was included on its own (Model 2),
followed by the variable regarding cooperation with customers (Model 3). Finally, the
two independent variables were included together (Model 4). The same method of
including the independent variables individually was used to test the H3 (Table VII).
The first variable included was information integration with customers (Model 5),
followed by the two independent variables – information integration and cooperation
with customers (Model 6). Tables VI and VII score the contributions made by each set
of variables by determining the change in R 2 after each set was included.

4. Results
Tables VI and VII show the results of the hierarchical regression analysis. Table VI,
Model 1, which only includes control variables, does not show any significant
relationship between these variables and the intensity of LP adoption. Model 2 shows
that the level of cooperation with suppliers does not have any significant influence on the
intensity of LP adoption. However, cooperation with customers does have a significant
influence on the intensity of LP adoption (Model 3). This model explains 47 percent of the
total variance, with cooperation with customers representing only 27 percent of the total
variance. When all the independent variables are taken into consideration in a single
model (Model 4), it can be seen that the only independent variable that continues to have
a significant positive influence on the degree of LP adoption is cooperation with
customers (b ¼ 0.68, p , 0.01). This variable is shown to have a robust impact.
It is with this last model that the highest R 2 level is achieved. It can also be seen
in Models 3 and 4 that the “number of customers” control variable also has a significant
Variable Mean SD 1 2 3 4 5 6 7 8 9

1. LP 4.9 0.508
2. Age of plant 23.9 16.1 20.20
3. Number of suppliers 159.7 243.2 20.20 0.25
4. Number of customers 37 98.8 20.23 0.033 * 0.59 * *
5. Number of employees 377.6 276.2 0.20 0.32 * * 0.47 * * 0.17
6. Number of different products 470.7 847.1 20.00 0.12 2 0.11 2 0.16 0.00
7. Percentage of purchase costs 58.4 13.3 0.06 20.09 0.07 2 0.05 0.05 20.37 *
8. Cooperation with customers 4.9 1.3 0.20 20.06 2 0.02 0.26 20.02 0.16 0.15
9. Cooperation with suppliers 5.9 1.5 0.21 20.13 2 0.08 0.07 0.02 20.13 0.04 0.37 * *
10. Info. integration with customers 4.8 1.0 0.36 * * 20.27 * 2 0.24 2 0.00 0.01 0.15 0.17 0.35 * * 0.36 * *
Notes: Correlations are significant at: *p , 0.05 and * *p , 0.01; N ¼ 84
Cooperation

correlation coefficients
in the supply

Means, standard
chain

deviations and Pearson

Table V.
1087
IJOPM
Independent variables Model 1 Model 2 Model 3 Model 4
32,9
Age of plant 2 0.27 20.18 2 0.10 2 0.07
Number of employees 0.29 0.26 0.17 0.018
Percentage of purchase costs 2 0.02 20.00 2 0.15 2 0.15
Number of different products offered 2 0.06 20.05 2 0.21 2 0.26
1088 Number of suppliers 2 0.34 20.30 2 0.07 2 0.09
Number of customers 2 0.11 20.14 2 0.48 * 2 0.50 *
Cooperation with suppliers 0.14 2 0.12
Cooperation with customers 0.60 * * 0.68 * *
F 1.21 1.10 3.27 * 2.83 *
R2 0.20 0.22 0.47 0.48
Table VI. Adjusted R 2 0.03 0.02 0.32 0.31
Impact of cooperation DR 2 0.02 0.27 0.28
with customers and
suppliers on the intensity Notes: Significant at: *p , 0.05 and * *p , 0.01; the values are standardised regression
of LP adoption coefficients (bs)

Independent variables Model 5 Model 6

Age of plant 2 0.12 0.14

Number of employees 0.18 0.23
Percentage of purchase costs 2 0.08 0.03
Number of different products offered 2 0.18 20.10
Number of suppliers 2 0.04 20.24
Number of customers 2 0.48 * 20.33
Cooperation with customers 0.57 * * 20.75
Information integration with customers 0.03 21.38
Cooperation with customers £ Information
integration with customers 2.21 *
F 2.72 * 3.22 *
Table VII. R2 0.48 0.56
Impact of information Adjusted R 2 0.30 0.38
integration and DR 2 0.08
cooperation with
customers on the Notes: Siginificant at: *p , 0.05 and * *p , 0.01; the values are standardised regression
intensity of LP adoption coefficients (bs)

relationship with the intensity of LP adoption, which in this case is negative. This is not
surprising if we take into account that the fewer the number of customers, the more
critical it becomes to maintain quality and promised delivery time and, as a result, the
more necessary LP becomes.
Table VII analyzes the impact of cooperation and information integration with
customers on the intensity of LP adoption. Model 5 includes the control variables plus
these two independent variables. Once more, the significant positive influence of
cooperation with customers on the intensity of LP adoption is apparent. However,
information integration with customers does not have a significant impact on the
intensity of LP adoption. Model 6, which includes the joint effect of the two independent
variables, shows how the interaction between cooperation and information
integration with customers has a significant impact on the intensity of LP adoption.
Moreover, this interaction is the only significant variable in this model –, i.e. cooperation Cooperation
with customers no longer has a significant impact when the joint effect of cooperation in the supply
and information integration with customers is examined. Furthermore, this model
explains 56 percent of the total variance, with the joint effect representing only 8 percent chain
of the total variance. In Tables VI and VII it can also be seen that the only control variable
that has a significant influence on the intensity of LP adoption is, again, the number of
customers, and then only in Model 5 and not when the joint effect of two independent 1089
variables is considered in Model 6.

5. Discussion
The research hypotheses are discussed below on the basis of the results of the
regression analysis presented in the previous section.

5.1 Hypothesis H1
The results of the analysis do not support H1: greater levels of cooperation with suppliers
are not positively related to the intensity of LP adoption. This result is not consistent with
prior empirical evidence by Jayaram et al. (2008), which seems to assume a positive and
significant influence, at least with regard to earlier stages of LP adoption. These results
could be explained with reference to the position that first tier suppliers occupy in the
automobile industry supply chain and the power relationships that exist between
the different tiers and the focal company in the supply chain. Considering the fact that the
chains in our research are producer-driven, and assuming that OEMs act as chain
directors, these negotiate with the first tier suppliers; they, in turn, negotiate with second
tier partners, and so on. Cooperation with suppliers might be influenced by proximity to
the end customer. In other words, the further upstream we move, the more companies we
find, the smaller their size, and the lower the value of the products obtained, which also
makes cooperation less important and affects the establishment of trust relationships
(Stuart and McCutcheon, 1996). In the automotive industry, OEMs are usually the leaders
that can influence the management practices of the first tier suppliers (Martı́nez-Sánchez
and Pérez-Pérez, 2003) and, in this way, the intensity of LP adoption. This influence can be
observed below, in the analysis of the results obtained with regards to H2. However, when
cooperation between first and second tier suppliers is analyzed, that is, with regard to the
hypothesized relationship in H1, more intense adoption of LP is not perceived.
Second tier suppliers are small companies that work for a range of different
industries (apart from the automotive industry), which means that they have less
bargaining power compared to first tier suppliers. This has led to first tier suppliers
not feeling the need to link cooperation with suppliers with the adoption of strategic
management systems like LP.

5.2 Hypothesis H2
The results allow H2 to be accepted: there is a direct relationship between the level of
cooperation with customers and the intensity of LP adoption. These results are
consistent with the assumption that coercive pressures from customers to reach the
high efficiency level required in the automotive sector lead firms which collaborate
with their customers to adopt LP more intensely. In addition, given the major changes
related to adopting LP, firms that adopt it must receive support and consultancy
during the implementation process. Many OEMs have successfully adopted LP
IJOPM (Holweg, 2007) and have an adequate knowledge of it. As a consequence, they can
32,9 easily share their expertise with those first tier suppliers they cooperate with, helping
them to overcome problems arising during the implementation process. At the same
time, first tier suppliers are interested in advancing in terms of their adoption of LP
so that it might act as a safeguard to their cooperation with customers and, therefore,
allow them to continue to have cordial and long-term relationships with them.
1090
5.3 Hypothesis H3
The results also allow H3 to be accepted: the greater the interaction between cooperation
and information integration with customers, the greater the intensity of LP adoption.
These results broaden those obtained in the previous hypothesis by assuming that
cooperation with customers must therefore be complemented by manufacturers’
production information integration, in order for the company to opt for moving forward
in LP adoption and, thus, continue to have warm and long-term relationships with
manufacturers. The transfer of production-related information from the customer to the
supplier means that the latter’s operations can be better adapted to the customers’ needs.
Suppliers can put policies in place to contend with variability in demand and balance
production and demand, and so reduce inventories along the chain, thus allowing for
“pull” production and, in general, more intense adoption of LP practices (Devaraj et al.,
2007). The combined effect of cooperation and integration with customers would
similarly indicate a high degree of inter-organizational trust (Kim et al., 2010) and to
maintain this, companies may decide to reduce their internal variability once they have
made some advances in implementing LP.
Finally, it should be indicated that none of the competitive forces or the cost and
structural factors contemplated have a significant impact on LP adoption.

6. Conclusions
This study’s findings build upon prior results on explanatory factors for LP adoption in
the literature, especially those of Simpson and Power (2005) and Jayaram et al. (2008), while
simultaneously trying to add some empirical evidence to this as-yet insufficiently
supported issue. To do this, a level of operational analysis is used that shows the degree to
which a company has incorporated lean practices. The main novelty of this is that we go
one step further and analyze the relationship between the development of cooperative links
with suppliers and customers and the intensity of LP adoption; that is, we try to explain
how LP adoption can improve through the development of coordination with chain
partners. In addition, as far as we are aware this is the first time that an analysis has been
conducted into the effect that information integration between chain agents, specifically
between first tier suppliers and OEMs, has on the degree of intensity of LP adoption.
The results stress the importance of having a holistic vision of the supply chain when
explaining the degree of LP adoption. They highlight the findings of Panizzolo (1998) by
underscoring the importance of external relationships in LP adoption. They also build
upon the results found by Jayaram et al. (2008) by going further into relationships with
chain agents when explaining LP adoption. The study also complements the results of
research by Simpson and Power (2005), by finding that information integration with
customers on its own does not explain the intensity of LP adoption.
Our results also stress the importance of using institutional theory to assess motivation
for the intensity of LP adoption. The customer’s perception of the success of LP may
motivate that customer to pressure the suppliers with whom it cooperates to adopt similar Cooperation
improvement mechanisms. At the same time, the level of cooperation makes customers in the supply
predisposed to offer appropriate support to their suppliers in order to overcome any
problems that might arise during the LP implementation process. This is in line with chain
contributions made by Womack and Jones (1996), who state that a company’s efforts to
implement LP will only be rewarded if it extends throughout the whole product delivery
process, with changes being initiated at the customer end. That cooperation with customers 1091
combined with information integration with them is what triggers their proactive attitude
towards stepping up LP adoption is precisely what this study demonstrates.
In other respects, the degree of cooperation with suppliers has been seen not to
influence LP adoption. This might indicate that first tier suppliers do not consider their
suppliers to be strategic partners, and consequently that collaboration with them has
no influence on the intensity of LP adoption of the analyzed companies.
A number of managerial implications can be drawn from the research presented in
this paper. Managers should be aware that collaboration with customers creates an
environment that favours the adoption of LP. What is more, as far as relationships with
customers are concerned, cooperation efforts must be backed up by information
integration with customers, while simultaneously making advances in LP adoption
with a view to maintaining customer cooperation and integration.
This study is not free of limitations. The aim of the analysis is exploratory and the use
of a relatively small sample (84 plants) has prevented us from providing some measures
of internal consistency and composite reliability, such as AVE, CFI and SRMR.
Other limitations could be the basis for future research. To be specific, in this study
only information integration on production has been examined as a relevant factor in
downstream supply chain integration. Thus, we suggest that future studies
simultaneously examine the role of both information and physical flows along the
supply chain in LP adoption. In addition, the results have only been obtained from a
study of the Spanish automobile industry, and so the findings cannot be inferred to be
universally applicable to other countries and industries. Therefore, a logical extension of
this research would be its empirical replication in other contexts. Similarly, future
studies could expand the analysis to include all of the agents in the chain. Although from
theoretical reasoning we infer that cooperation and information integration lead to a
certain degree of LP adoption, it would also be beneficial in the future to use longitudinal
methodology to study causality in the relationships that were observed, as the
cross-sectional nature of the data handled and the hierarchical regression carried out do
not allow any indications of causality to be statistically inferred. Similarly,
further developments should focus on an investigation of the time lag that occurs
between a company increasing cooperation with suppliers and customers, and progress
being made with regards to the degree to which LP is implemented.

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About the authors

José Moyano-Fuentes is Professor of Management at the Department of Business Organization,
Marketing and Sociology at the University of Jaén (Spain). He currently conducts research on the
lean production, supply chain management and firm performance in the automotive and
aeronautical industries. Currently, he leads several research projects about these topics.
His research has appeared in the Administrative Science Quarterly, Journal of Management of
Information Systems, Journal of Management Studies, International Journal of Management
Reviews, International Journal of Operations & Production Management, Small Business
Economics, Technology Analysis & Strategic Management, International Journal of Technology
Management and Technovation. José Moyano-Fuentes is the corresponding author and can be
contacted at: jmoyano@ujaen.es
Macarena Sacristán-Dı́az is Associate Professor of Operations Management at the Department
of Financial Economics and Operations Management at the University of Seville. She has been
involved in various research projects in the areas of AMT, SCM and performance. Her current
research focuses on lean production and on SCM. Her articles have appeared in major international
journals such as the International Journal of Operations & Production Management,
IJOPM the Journal of Operations Management, the International Journal of Production Research and the
International Journal of Production Economics.
32,9 Pedro J. Martı́nez-Jurado is a PhD student and researcher on lean production adoption at the
Department of Business Organization, Marketing and Sociology at the University of Jaén (Spain).
He is currently conducting research on factors leading to lean production adoption in the
automotive and aeronautical industries. He develops his doctoral thesis with funds from
Andalussian Regional Government. His research has appeared in International Journal of
1096 Technology Management and Investigaciones Europeas de Dirección y Economı́a de la Empresa.

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