IDEAS home Printed from https://ideas.repec.org/a/rnd/arimbr/v14y2022i2p28-45.html
   My bibliography  Save this article

Key Factors to Increasing Free Cash Flow for Manufacturers Utilizing Lean Production: An AHP-DEMATEL Approach

Author

Listed:
  • Cathay Kuo-Tai Kang
  • Chieh-Yu Lin
  • Yi-Hui Ho

Abstract

This paper aims to apply AHP and DEMATEL to analyze the key factors and interrelationships of lean production to increase free cash flow for manufacturers. The AHP hierarchy was determined through literature and interviews with leading management experts. The assessment criteria were categorized into five major criteria and 15 sub-criteria, including production, sales, human resources, R&D, and finance. According to the AHP results, the first eight key factors were identified as the key factors to increasing cash flow for manufacturers who utilized lean production. DEMATEL was used to identify the interactions among the eight key factors and further identify the four more important ones. The four key factors are strategic planning, strategic deployment, leadership, and goal orientation. This paper proposes management implications and improvement suggestions for the four key factors and their interactions.

Suggested Citation

  • Cathay Kuo-Tai Kang & Chieh-Yu Lin & Yi-Hui Ho, 2022. "Key Factors to Increasing Free Cash Flow for Manufacturers Utilizing Lean Production: An AHP-DEMATEL Approach," Information Management and Business Review, AMH International, vol. 14(2), pages 28-45.
    • Handle: RePEc:rnd:arimbr:v:14:y:2022:i:2:p:28-45
    DOI: 10.22610/imbr.v14i2(I).3335
    as

    Download full text from publisher

    File URL: https://ojs.amhinternational.com/index.php/imbr/article/view/3335/2111
    Download Restriction: no
    File URL: https://ojs.amhinternational.com/index.php/imbr/article/view/3335
    Download Restriction: no
    File URL: https://libkey.io/10.22610/imbr.v14i2(I).3335?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adrian Payne & Pennie Frow & Andreas Eggert, 2017. "The customer value proposition: evolution, development, and application in marketing," Journal of the Academy of Marketing Science, Springer, vol. 45(4), pages 467-489, July.
    2. Ching-Ju Chiu & Jia-Chian Hu & Yi-Hsuan Lo & En-Yu Chang, 2020. "Health Promotion and Disease Prevention Interventions for the Elderly: A Scoping Review from 2015–2019," IJERPH, MDPI, vol. 17(15), pages 1-11, July.
    3. Vargas, Luis G., 1990. "An overview of the analytic hierarchy process and its applications," European Journal of Operational Research, Elsevier, vol. 48(1), pages 2-8, September.
    4. Lucia Azanedo & Guillermo Garcia-Garcia & Jamie Stone & Shahin Rahimifard, 2020. "An Overview of Current Challenges in New Food Product Development," Sustainability, MDPI, vol. 12(8), pages 1-4, April.
    5. Abbie Griffin & John R. Hauser, 1993. "The Voice of the Customer," Marketing Science, INFORMS, vol. 12(1), pages 1-27.
    6. Kim, Nayeon & Montreuil, Benoit & Klibi, Walid, 2022. "Inventory availability commitment under uncertainty in a dropshipping supply chain," European Journal of Operational Research, Elsevier, vol. 302(3), pages 1155-1174.
    7. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    8. R. Glenn Hubbard, 1998. "Capital-Market Imperfections and Investment," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 193-225, March.
    9. Yurong Chen & Yannick Perez, 2015. "Business Model Design: Lessons Learned from Tesla Motors," Post-Print hal-01424723, HAL.
    10. Yoram Wind & Thomas L. Saaty, 1980. "Marketing Applications of the Analytic Hierarchy Process," Management Science, INFORMS, vol. 26(7), pages 641-658, July.
    11. Anil Sachdev & Jitendra Agrawal, 2017. "Application of Policy Deployment and Daily Management in service sector," International Journal of Quality Innovation, Springer, vol. 3(1), pages 1-17, December.
    12. Babak Daneshvar Rouyendegh & Kazim Topuz & Ali Dag & Asil Oztekin, 2019. "An AHP-IFT Integrated Model for Performance Evaluation of E-Commerce Web Sites," Information Systems Frontiers, Springer, vol. 21(6), pages 1345-1355, December.
    13. Eva Benková & Peter Gallo & Beáta Balogová & Jozef Nemec, 2020. "Factors Affecting the Use of Balanced Scorecard in Measuring Company Performance," Sustainability, MDPI, vol. 12(3), pages 1-18, February.
    14. Ileana Gloria Pérez Vergara & Julián Andrés Arias Sánchez & Rocío Poveda-Bautista & Jose-Antonio Diego-Mas, 2020. "Improving Distributed Decision Making in Inventory Management: A Combined ABC-AHP Approach Supported by Teamwork," Complexity, Hindawi, vol. 2020, pages 1-13, February.
    15. Ivars LINDE & Dmitry PHILIPPOV, 2021. "What do your customers think about? To guess or to know?," Access Journal, Access Press Publishing House, vol. 2(1), pages 17-27, January.
    16. Yujin Park & Sang-Woo Lee & Junga Lee, 2020. "Comparison of Fuzzy AHP and AHP in Multicriteria Inventory Classification While Planning Green Infrastructure for Resilient Stream Ecosystems," Sustainability, MDPI, vol. 12(21), pages 1-25, October.
    17. Shuang Liu & Qi Yu & Liang Zhang & Jian Xu & Zhenji Jin, 2021. "Does Intellectual Capital Investment Improve Financial Competitiveness and Green Innovation Performance? Evidence from Renewable Energy Companies in China," Mathematical Problems in Engineering, Hindawi, vol. 2021, pages 1-13, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruinshoofd Allard & Kool Clemens, 2002. "The Determinants of Corporate Liquidity in the Netherlands," Research Memorandum 014, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    2. Xin Qu & Majella Percy & Fang Hu & Jenny Stewart, 2022. "Can CEO equity‐based compensation limit investment‐related agency problems?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2579-2614, June.
    3. Margherita Bottero & Stefano schiaffi, 2022. "Firm liquidity and the transmission of monetary policy," Temi di discussione (Economic working papers) 1378, Bank of Italy, Economic Research and International Relations Area.
    4. Liu, Siqi & Yin, Chao & Zeng, Yeqin, 2021. "Abnormal investment and firm performance," International Review of Financial Analysis, Elsevier, vol. 78(C).
    5. Caggese, Andrea, 2007. "Testing financing constraints on firm investment using variable capital," Journal of Financial Economics, Elsevier, vol. 86(3), pages 683-723, December.
    6. Fabio Bertoni & María Ferrer & José Martí, 2013. "The different roles played by venture capital and private equity investors on the investment activity of their portfolio firms," Small Business Economics, Springer, vol. 40(3), pages 607-633, April.
    7. Hanna Hottenrott & Bronwyn H. Hall & Dirk Czarnitzki, 2016. "Patents as quality signals? The implications for financing constraints on R&D," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(3), pages 197-217, April.
    8. Rong-Ruey Duh & Audrey Hsu & Sidney Leung, 2015. "Earnings management and government restrictions on outward foreign direct investment: evidence from Taiwanese firms," Review of Quantitative Finance and Accounting, Springer, vol. 44(1), pages 41-67, January.
    9. Jang, SooCheong (Shawn), 2011. "Growth-focused or profit-focused firms: Transitions toward profitable growth," Tourism Management, Elsevier, vol. 32(3), pages 667-674.
    10. Patrick M. McGuire, 2003. "Bank ties and bond market access : evidence on investment-cash flow sensitivity in Japan," Proceedings 859, Federal Reserve Bank of Chicago.
    11. He Xiao, 2023. "Institutional investors' corporate site visits and corporate investment efficiency," International Review of Finance, International Review of Finance Ltd., vol. 23(2), pages 359-392, June.
    12. Armen Hovakimian & Gayané Hovakimian, 2009. "Cash Flow Sensitivity of Investment," European Financial Management, European Financial Management Association, vol. 15(1), pages 47-65, January.
    13. Jean-Bernard Chatelain, 2002. "Structural modelling of investment and financial constraints: Where do we stand?," Working Paper Research 28, National Bank of Belgium.
    14. Titman, Sheridan & Wei, K. C. John & Xie, Feixue, 2004. "Capital Investments and Stock Returns," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 39(4), pages 677-700, December.
    15. Abubakr Saeed & Yacine Belghitar & Ephraim Clark, 2017. "Political connections and firm operational efficiencies: evidence from a developing country," Review of Managerial Science, Springer, vol. 11(1), pages 191-224, January.
    16. Xu, Chang & Jin, Long, 2024. "Effects of government digitalization on firm investment efficiency: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 819-834.
    17. Ovtchinnikov, Alexei V., 2013. "Merger waves following industry deregulation," Journal of Corporate Finance, Elsevier, vol. 21(C), pages 51-76.
    18. Shi, Min, 2019. "Overinvestment and corporate governance in energy listed companies: Evidence from China," Finance Research Letters, Elsevier, vol. 30(C), pages 436-445.
    19. Lee, Sanghoon, 2015. "Slack and innovation: Investigating the relationship in Korea," Journal of Business Research, Elsevier, vol. 68(9), pages 1895-1905.
    20. Korpela, Jukka & Tuominen, Markku, 1996. "A decision aid in warehouse site selection," International Journal of Production Economics, Elsevier, vol. 45(1-3), pages 169-180, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rnd:arimbr:v:14:y:2022:i:2:p:28-45. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Muhammad Tayyab (email available below). General contact details of provider: https://ojs.amhinternational.com/index.php/imbr .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.