Be lean to be resilient Setting capabilities for turbulent times

Abstract: Businesses globally are challenged to innovate their operations strategies and practices towards tighter delivery times, better quality and cheaper prices to remain profitable in addition to managing unpredictable circumstances well in today’s turbulent business environment. They often have to deal with the apparent paradox of advancing efficiency-fostering approaches such as lean production, and enhancing operational resilience against unanticipated disruptions. The purpose of this study is to investigate whether and how practices in seemingly contradicting paradigms in operations management can be utilised to attain a better competitive position in the face of uncertainties.This thesis is comprised of ‘modules’ of studies designed to systematically address the three research questions. This was necessary due to the different maturity level of the concepts brought together. Predominantly qualitative mixed-method approach was used for the overall research with some quantitative analysis included. The critical incident technique, case study and Bayesian inference were used in the different studies (papers).Operational resilience is characterised in terms of five core functions: sense, build, reconfigure, re-enhance, and sustain (RQ1). Resilience is also operationalised using routine practices that are bundled into internal/external, proactive/reactive dimensions of capabilities that positively influence performance upon recovery from disruption. An analysis showing that lean practice bundles lead to better operational performance under high uncertainty context is also done in this thesis (RQ2). Finally, operational resilience (based on routine practices that form the core functions) was found to have stronger synergies than trade-off with lean (based on practice bundles) in times of turbulence (RQ3).This thesis extends the resource-based view to high uncertainty contexts through empirical evidence and shows that resilience (dynamic) capabilities can be built from practices that firms normally employ; the capabilities are sources of better performance and competitive advantages in turbulent business environments. The thesis contributes to the discussion on the paradox of lean and operational resilience based approaches in the same context; lean practices bundles lend themselves to synergy with resilience capabilities, and leverage competitive gains in turbulent times.Practically, findings of this thesis suggest that companies need not abandon their lean implementation to become more resilient. In fact, it shows that lean implementation should be extended to address value chain processes beyond the shop floor for integrative removal of wastes, while being able to flexibly mitigate disruptions.