Int. J Sup. Chain. Mgt Vol. 9, No. 2, April 2020 961 Less for More: The Structural Effects of Lean Manufacturing Practices on Sustainability of Manufacturing SMEs in Malaysia Gusman Nawanir #1 , Kong Teong Lim *2 , Khai Loon Lee #3 , Okfalisa 4 , Taofeeq Durojaye Moshood #5 , Ahmad Nur Aizat Ahmad 6 #1,3,5 Faculty of Industrial Management, Universiti Malaysia Pahang, 26300 Kuantan, Pahang, Malaysia *2 School of Technology Management and Logistics, Universiti Utara Malaysia; 06010 Sintok, Kedah, Malaysia 4 Informatics Engineering Department in Universitas Islam Negeri Sultan Syarif Kasim, 28293 Pekanbaru, Riau, Indonesia 6 Department of Production and Operation, Faculty of Technology Management, Universiti Tun Hussein Onn, Johor, Malaysia # 1 gusman@ump.edu.my 2 ktlim@uum.edu.my 3 leekhailoon@ump.edu.my 4 okfalisa@gmail.com 5 taofeeqmoshood@gmail.com 6 aizat@uthm.edu.my Abstract - As one of the important determinants of the health of the global economy, small and medium enterprises (SMEs) are responsible for several environmental degradations. The increase in resource consumption, climate change, biodiversity, water scarcity, and demographic changes and instability triggered society to consider sustainability issues. One of the operational initiatives related to sustainability is lean manufacturing (LM), which has become an imperative factor of organizational excellence in today’s volatile competitive market. However, it remains a critical question, does it positively affect corporate sustainability? This quantitative cross-sectional study examined the impact of LM on the triple bottom line (3BL) dimensions. A total of 159 manufacturing SMEs in Malaysia participated in this study. The analysis using the structural equation modeling (SEM) approach evidenced that the holistic implementation of LM practices contributes positively to all dimensions of 3BL. It implied that in order to enhance sustainability performance, SMEs should adopt the LM concepts holistically. This paper extends the boundary of knowledge by lessening the existing gaps in the literature to support the notion of potential implications LM on sustainability. Practitioners could grab benefits by understanding the critical initiatives and strategies towards the future sustainability of their businesses. Keywords-Lean manufacturing; sustainability; triple bottom line; economic performance; environmental performance; social performance; manufacturing SMEs 1. Introduction Sustainable development should be considered as an ultimate goal for all organizations. In the current industrial volatile situation with serious resource crises, business players are inspired to apply approaches to sustain their businesses while targeting competitive advantage. As the world population increases significantly and with the expectation up to 9 billion people by 2050, and non- renewable natural resources are becoming exhaustible, scarce, challenging, and difficult to acquire; organizations should embrace sustainability issues as a top priority [1]. Even though some corporations have documented that no business can be established on a dead planet, some of them still perceived that protecting the environment and considering the social effects of their operations may sacrifice profitability and operational performance [2]. Specifically, the mechanism of how a business achieves its profitability and operational performance while considering environmental and social aspects appears unclear. Recently, the increase in resource consumption, climate change, biodiversity, water scarcity, and demographic changes and instability triggered the society to consider sustainability issues by taking the triple bottom line dimensions (or otherwise noted as 3BL) [3] into organizational activities. The 3BL framework encompasses an inter-related combination of environmental, economic, and social aspects. This framework suggested that organizations must obligate to focus on social and environmental dimensions of their undertakings just as they do on economic aspects. The economic performance focuses on maximization of financial benefits through gaining various kind of wealth, such as profit, sales, revenue, return on investment, etc. [4], whereas the social aspect focuses on maximizing the human well-being that covers social value, social identifies, social relationship and social institution, and the environmental sustainability concerns on avoiding negative effects of organizational activities on environment as the consequences of the consumption of energy and natural resources [5]. In other words, besides focusing on profit, the companies must also consider the effects of their operations on the people and planet. Therefore, multidimensional aspects must be integrated beyond the traditional indices, such as profit, market share, and sales. Organizations should also embrace environmental and social characteristics. In order to leverage its operational achievement, a company should consider to apply an integrated operational enhancement initiative along with the sustainability practices. ______________________________________________________________ International Journal of Supply Chain Management IJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print) Copyright © ExcelingTech Pub, UK (http://excelingtech.co.uk/)