The construction industry faces challenges, such as schedule overruns, cost overruns, poor quality, and safety issues. Lean construction is a valuable concept for waste reduction and improving project performance. This study explored the impact of lean construction principles on contractors' project performance in Ethiopia. Using a quantitative method and simple random sampling technique, 159 respondents from construction companies were selected. This study introduced partial least squares structural equation modeling (PLS-SEM) in the study area. The results showed that process/technology lean principles, people/culture lean principles, and integrated project delivery variables had a direct positive impact on contractor performance. There was also a significant indirect relationship between process/technology-lean construction principles and project performance with a complementary partial mediation effect. However, no significant indirect associations were found between people/culture-lean construction principles and project performance through mediation of onsite construction waste management. The study used FIMIX-PLS to test robustness and detect hidden heterogeneity at non-critical levels. The findings provide researchers and practitioners to identify the influences that are critical for contractors’ projects performance improvement, and that results in the best possible outcome.

Existing literature on lean principles reveals the impact of lean principles on the organizational performance. During the past few years, the Indian manufacturing context has been competing with the global competitors directly to sustain their presence. One of the big motivations behind this is the steps taken in favor of replacing the policies and regulations for the manufacturing context by the government of India. In present, the manufacturing context is still far away to get the sustainable market because of customer perception variation i.e. cost, delivery and quality re-lated issues. To overcome the uncertainties based on the attributes i.e. quality, productivity, de-livery etc., almost all the manufacturing units use the basic of lean principle i.e. apply the 5’S. Whereas the heavy industries used the VSM approach especially the automotive product manu-facturers. The work presented in this paper gives an insight on the application of lean principles in the manufacturing context and analyzes the impacts using ISM approach.