Investigation of Factors Impacting Lean Implementation in the Indonesian Fast-Moving Consumer Goods Industry

The fast-moving consumer goods (FMCG) industry is promising in Indonesia, with recorded sales of more than USD 10 billion, which represents more than 18% of Indonesia’s gross domestic product in 2016. Despite the lucrative market, FMCG companies face challenges due to intense competition and increasing operational costs. Consequently, Indonesian companies have begun to explore lean implementation to decrease their costs and improve efficiency, but with minimal success. This study investigates the critical success factors of lean implementation in the Indonesian FMCG industry, as such implementation cannot optimally occur if the implementing company does not successfully manage the important factors that affect lean implementation. This study tested various factors—namely, organizational culture, personnel capability, communication, and leadership and management involvement—that impact lean implementation and organizational performance in Indonesia’s FMCG industry. It was also found that leadership and management involvement are the most important factors. Based on the obtained results, this research proposes recommendations regarding the best lean implementation practices in Indonesian FMCG companies.