Lean Management Practices and Organizational Competitiveness: The Mediating Role of Operational Performance in SMEs in Bandung, Indonesia
Jiehan Ibrahim
*
Universitas Widyatama, Bandung, Indonesia.
Arnold Johan Jorgen
Universitas Widyatama, Bandung, Indonesia.
*Author to whom correspondence should be addressed.
Abstract
Aims: This study aims to examine the impact of lean management practices on organizational competitiveness, with operational performance positioned as a mediating mechanism. Specifically, the study seeks to analyse how lean management practices influence operational performance and how these operational improvements subsequently contribute to enhancing the competitive position of small and medium-sized enterprises (SMEs).
Study Design: This study employs a quantitative explanatory research design using a cross-sectional survey approach. The relationships among lean management practices, operational performance, and organizational competitiveness are examined through Partial Least Squares Structural Equation Modeling (PLS-SEM).
Place and Duration of Study: The study was conducted among small and medium-sized enterprises located in the Greater Bandung area, Indonesia. Data collection took place between 15 November to 5 December 2025.
Methodology: Data were collected from 186 SME owner–managers in Bandung, Indonesia, and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The measurement items were adapted from established literature on lean management, operational performance, and competitiveness. The data were analysed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to assess the reliability and validity of the measurement model and to test the proposed structural relationships, including the mediating role of operational performance.
Results: The results indicate that lean management practices have a significant positive effect on operational performance. Operational performance, in turn, significantly enhances organizational competitiveness. In addition, lean management practices also exert a direct positive effect on organizational competitiveness. Mediation analysis reveals that operational performance partially mediates the relationship between lean management practices and organizational competitiveness, indicating that the competitive benefits of lean management are achieved primarily through improvements in operational performance.
Conclusion: The study concludes that lean management serves as an effective strategic approach for enhancing the competitiveness of SMEs when it is implemented in a manner that strengthens operational performance. The findings underscore the importance of focusing on operational improvements as a key mechanism through which lean management translates into sustainable competitive advantages.
Keywords: Lean management, operational performance, organizational competitiveness, SMEs, PLS-SEM