Testing the Effect of Lean Practices and Risk Management on Performance using Cluster Analysis

Lean practices were a common approach to managing supply chain networks. However, recent research suggests that the lean approach tends to weaken supply chain links as the scope and scale of the business environment grows globally. There are not many articles exploring how the lean approach can lead to supply chain vulnerability. This paper aims to test the interrelationship among supply chain risk management, lean practices, and firm performance, using the International Manufacturing Strategy Survey (IMSS) data set and cluster analysis. Four clusters are proposed depending on the level of lean practices and risk management. This paper suggests that increasing reliance on thin methods can make supply chains more vulnerable. It also suggests that firms with lean practices and risk management expect the best performance among the four clusters.