Agile manufacturing: enhancing organizational performance

Agile manufacturing has emerged as a key strategy in dynamic market environments, characterized by intense competition and rapid technological advancements. It enables firms to adapt quickly and effectively to changing marketplace demands. Historically, agile manufacturing has been linked to improved operational and financial performance, but its impact on broader sustainable business performance, including economic, environmental, and social aspects, has remained less explored.

Methodology: empirical examination using PLS-SEM

The study employed Partial Least Square Structural Equation Modeling (PLS-SEM), a suitable method for its relatively small sample size and the data's deviation from normal distribution. Data was collected via a survey distributed to manufacturing firms in Northern Italy, using previously developed and validated scales.

Key research findings

• Internal learning as a mediator: Internal learning fully mediates the relationship between agile manufacturing and economic performance, and partially mediates its impact on social performance.
• Reconfiguration capability as a mediator: Reconfiguration capability fully mediates the relationship between agile manufacturing and economic/environmental performance, and partially mediates its impact on social performance.
• Transformative impact: Both internal learning and reconfiguration capabilities are necessary for maximizing the sustainable performance effects of agile manufacturing.

The future of agile manufacturing research

This research underscores the importance of transformational capabilities in realizing the full benefits of agile manufacturing in terms of sustainable business performance across the triple bottom line (TBL; economic, environmental, and social gains). The findings suggest that for companies to fully leverage the advantages of agility, they need to focus on developing internal learning and reconfiguration capabilities. These capabilities enable the effective modification of resources and processes to meet economic, environmental, and social performance goals.

Meet the researchers

• Matin Mohaghegh: Department of Entrepreneurship Innovation and Technology, House of Innovation, Stockholm School of Economics, Stockholm, Sweden.
• Pär Åhlström: Department of Entrepreneurship Innovation and Technology, House of Innovation, Stockholm School of Economics, Stockholm, Sweden.
• Silvia Blasi: Department of Business Administration, University of Verona, Verona, Italy.