Lean and dynamic capabilities for SMEs - a holistic framework with an empirical investigation using structural equation modelling

In a dynamic business environment amidst COVID-19 pandemic, adopting best practices like lean, supply chain and knowledge management are considered rational decisions to sustain the organisational performance. Small and medium enterprises (SMEs) manage their business process by focusing on short-term benefits rather than long-term. Moreover, SMEs need a real-time model for framing the roadmap to execute the best practices. Based on the theory of dynamic capability, value and socio-technical system (STS), this study constructed a holistic framework for SMEs to create a synergetic process with lean, supply chain management (SCM) and knowledge management (KM). Partial least square-structural equation modelling (PLS-SEM) was applied to assess the framework model. The model was analysed using the sample size of 132 valid responses from Indian manufacturing SMEs. The current study formulated and studied lean management practices (LMPs) as a holistic approach with lean training, learning culture, supply chain relationship and integration for SMEs performance. The study results also clarified how SMEs could enhance their internal and external capability to improve performance.