A systematic literature review regarding the influence of lean manufacturing on firms' financial performance

Purpose - The lean philosophy has demonstrated its effectiveness to improve firms' operational performance. However, the impact of lean practices on financial performance is still unclear due to the poor understanding of the link between operational and financial measures and the conflictive results obtained by previous research. The purpose of this paper is to conduct a systematic literature review to understand whether lean companies have improved their financial performance. Moreover, this article aims to uncover research gaps in the literature and examine which time spans of research have been considered to analyse both the degree of lean implementation and the measurement of financial outcomes. Design/methodology/approach - A systematic literature review has been conducted to identify peer-reviewed articles that analyse the effect of the lean production paradigm on the financial performance measures of manufacturing companies. Then, the identified articles were processed using a combination of descriptive and content analyses methods to draw new conclusions, uncover gaps and find novel paths for research. Findings - Various authors indicate that lean initiatives lead to an enhancement of financial performance measures. JIT and TQM lean practice bundles are suggested as the best enablers of financial performance in terms of sales and profit. In contrast, according to some scholars, lean does not necessarily improve companies' financial results if it is not properly implemented. Originality/value - Several studies have focused on analysing the effects of lean on performance. However, only a small part of the literature has addressed the study of the effects of lean practices on financial performance metrics. The originality of this study lies in the investigation of the connections between lean practices and financial performance measures found in the literature. The outcome is the identification of various possible positive impacts of some lean practices on financial metrics.