Create sustainable competitive advantage and improve sustainable performance by implementing lean and green manufacturing practices: an empirical study on German manufacturing SMEs

Purpose The aim of this study is to examine the direct and indirect effect between lean manufacturing practices (LMPs), green manufacturing practices (GMPs), firms’ sustainable competitive advantage (SCA) and sustainable performance (SP). Design/methodology/approach A survey questionnaire was used to collect data from 197 manufacturing small and medium-sized enterprises (SMEs) in Germany, and PLS–SEM was used to analyse the collected data and test the research hypotheses. Findings The results of the study show that LMP and GMP positively affect both SCA and SP of manufacturing SMEs in Germany. In addition, SCA positively affects SP and partially mediates the relationship between LMP, GMP and firms’ SP. Practical implications This study provides useful insights to managers of German manufacturing SMEs by emphasizing the importance of implementing both LMP and GMP in order to enhance firms’ SCA and SP. Furthermore, it demonstrates SCA as a critical factor in assessing the sustainable performance of companies, particularly in the context of adopting lean and green manufacturing practices. Originality/value Building on the limited existing literature on LMP, GMP, SCA and SP, this study develops a new framework that connects these concepts. It explores both the direct and indirect effects (via SCA) of lean and green manufacturing practices on the sustainable performance of manufacturing firms in a developed country context.