Beyond lean manufacturing and sustainable performance: are the circular economy practices worth pursuing?

Purpose: The need to improve sustainability in manufacturing firms, which would allow them to reduce the emission of pollutants and the generation of industrial waste, has stimulated the adoption of circular economy (CE) alongside lean manufacturing (LM) practices to significantly improve the sustainable performance of organizations. However, empirical evidence provided in previous studies and that has related the practices of LM, CE and sustainable performance do not allow establishing an interconnection between these three concepts. Therefore, this paper fills this gap in the literature by exploring the relationship between these three concepts. Design/methodology/approach: A quantitative study in which data were collected from 460 managers working in the automotive industry in Mexico was conducted. The data allowed the testing and validation of four hypotheses through the use of partial least squares structural equation modeling (PLS SEM). Findings: The results obtained suggest that LM practices have a significant positive influence both on sustainable performance and CE. In turn, the results also demonstrate the existence of a significant positive relationship between CE and the sustainable performance of manufacturing firms in the automotive industry as well as that CE has a positive role in mediating the interconnection between LM practices and sustainable performance. Practical implications: The results obtained from the present study will allow entrepreneurs in the automotive industry and industry professionals as well as government authorities to formulate more effective policies and strategies to support the improvement of environmental sustainability performance in the manufacturing sector. Originality/value: This is one of the first studies that have investigated the relationship between LM, CE and sustainable performance, particularly, in the automotive sector. [ABSTRACT FROM AUTHOR]