AUTOMOTIVE INDUSTRY IN MALAYSIA: THE RELATIONSHIP BETWEEN SLI AND SP

BETWEEN SLI AND SP

To ensure the relationship between SLI implementation and environmental sustainability performance, research by Jayaram et al. (2008) which are studied in the automotive supplier industry find positive relationships between: (i) relationship building and lean design; (ii) relationship building and lean manufacturing; and (iii) lean design and firm performance. This suggests that relationship building is more valuable for enhancing the product aspects of lean strategy as opposed to the process aspects of lean strategy. Process aspects of lean strategy appear to be largely a function of internal efforts. This finding is also supported by Schoenherr (2011). The test of hypothesis revealed ISO 14000 certification, pollution prevention and waste reduction as having a significant and positive effect on quality, delivery, flexibility, and cost performance measures; the initiative of recycling of materials failed to exhibit a significant influence in all four instances. These results, while partially supporting hypothesis, provide intriguing insight, especially also compared to findings in prior research. As such, their study overall supports the notion that environmental initiatives are beneficial, not only in terms of doing the right thing, but also in terms of operational performance Schoenherr (2011) cite in Montabon et al., (2007).

From the aspect of economic sustainability, Hofer et al. (2012) explored the relationship between lean production implementation and financial performance. Based on an analysis, the effect of lean production on financial performance is found to be partially mediated by inventory leanness. In addition, there is strong evidence that the concurrent implementation of internally-focused and externally-focused lean practices yields greater performance benefits than selective lean production implementation. The studies’ findings are largely consistent with Yang et al. (2011). This study explores relationships between lean manufacturing practices, environmental management and business performance. The findings suggest that prior lean manufacturing experiences are positively related to environmental management practice. Therefore, the paper provides empirical evidences with large sample size that environmental management practices become an important mediating variable to resolve the conflicts between lean manufacturing and environmental performance. Additional contextual analyses suggest that differences exist in terms of the strengths and statistical significance of some of the proposed relationships. Meanwhile, Demeter and Matyusz (2011) who have concentrate on how companies can improve their inventory turnover performance through the use of lean practices. According to their main proposition, firms that widely apply lean practices have higher inventory turnover than those that do not rely on lean manufacturing.

Evidence of positive effects of lean improvements on CSR sustainability performance is presented by Groen et al. (2012) have showed the performance can improve via: (i) attitude, in consequence of feedback in improvement initiatives; (ii) social pressure, because it provided the maintenance technicians with shared priorities and targets; and (iii) capability, because the performance measures uncovered various improvement opportunities. These variables in turn positively influenced employee initiative. Questionnaire results show that attitude, social pressure, and capability are significantly correlated with employee initiative. Another study by Brammer et al. (2005) found that the importance of gender variation and suggest both that external CSR is positively related to organizational commitment and that the contribution of CSR to organizational commitment is at least as great as job satisfaction.

However, the relationship between SLI and SP in Malaysian automotive industry will be investigated deeply via this paper propose. A hypothesis regarding the relationship between SLI and SP is formulated as follow: H1- There is a positive and direct significant relationship between SLI implementation and SP in Malaysian automotive industry.

CONCLUSIONS

The aim of this paper was to carry out the theoretical study on the determinants of critical success factors (CSF) of SLI namely (i) standard work, (ii), and SP in the Malaysian automotive industry. The main contribution of this paper was to persuade practitioner from the listing of automotive industry to take an attention on the relationship among CSFs of SLI and SP in Malaysian automotive industry.

Due to lack of studies on above addressed problem in the country, attempts were made to investigate the CSFs of SLI in Malaysian automotive industry. This study theoretically reviewed prior literatures on same problem in our country. The aim was to shed some light on the research problem. In future agenda, a survey is designed in order to conduct an empirical research for examining survey’s hypotheses. It is hoped that the important facts addressed in this paper will be a means whereby managers and researchers will be able to investigate the SLI problem in Malaysian automotive industry with better awareness.