The impact of leanness on supply chain sustainability: Examining the role of sustainability control systems

Purpose: An alignment between financial and operational measures is an essential element to capture the lean productivity improvements enabling supply chain sustainability. With the aim of supporting small and medium enterprises (SMEs) in addressing corporate sustainability challenges, this study examines (i) the impact of leanness on supply chain sustainability, and (ii) the moderating role of sustainability control systems (SCS) on the relationship between leanness and supply chain sustainability. Design/Methodology: Drawing on lean manufacturing and the levers of control framework, survey data was collected from 106 manufacturing SMEs in Sri Lanka. Moderated multiple regression analysis was employed to test the proposed hypotheses. Findings: The study finds that lean manufacturing practices, such as just-in-time deliveries, quality management, environmental management, and employee involvement show a significant positive impact on supply chain sustainability. As proposed, the interactive use of SCS shows a significant, positive moderating impact on the relationship between employee involvement and social supply chain sustainability. The diagnostic use of SCS negatively moderates the relationships between (i) just-in-time deliveries and economic supply chain sustainability, and (ii) environmental management and economic supply chain sustainability. However, both interactive and diagnostic uses of SCS do not show any significant moderating impact between lean manufacturing and environmental supply chain sustainability. Originality: SMEs are more likely to focus on diagnostic control systems with the aim of promoting economic supply chain sustainability. However, the findings reveal that manufacturing SMEs in the developing country context lack strong SCS to enable supply chain sustainability.