Drivers and efficiency outcomes of lean manufacturing adoption: evidence from enterprise survey in India

PurposeThis paper aims to examine whether firms adopting lean manufacturing practices experience higher total factor productivity (TFP) across formal, private Indian manufacturing firms. Moreover, this paper examines a broad set of determinants influencing lean adoption, considering both internal firm attributes such as size, export orientation, research and development(R&D) activity and management quality, as well as external constraints like electricity reliability and exposure to competition from the informal sector.Design/methodology/approachThis paper uses nationally representative data from the 2022 World Bank Enterprise Survey for India. Firm-level TFP is estimated using a Cobb–Douglas production function based on a gross output specification. To examine the predictors of lean adoption, this paper uses a logistic regression model.FindingsThe findings indicate that lean practices remain limited in the broader landscape of Indian manufacturing, with only 3.60% of firms reporting lean adoption. However, adopting firms exhibit higher TFP, underscoring the potential productivity benefits. Firm-level characteristics such as size, ownership, foreign-licensed technology use, training provision and management quality are vital enablers. Notably, firms with foreign ownership or those operating in environments marked by frequent power outages and intense informal competition are less likely to implement lean systems.Originality/valueThis paper makes an original contribution by exploring how lean manufacturing influences firm-level productivity in India while identifying structural barriers to its adoption. Unlike previous research, it emphasises underexplored factors such as infrastructure deficits and institutional constraints, which are particularly relevant in the Indian context. The paper provides new empirical insights into how both internal firm characteristics and external environmental factors jointly shape lean adoption.