Lean, green, and the quest for superior environmental performance

Production and Operations Management, Fall 2001 by Rothenberg, Sandra, Pil, Frits K, Maxwell, James

LEAN, GREEN, AND THE QUEST FOR SUPERIOR ENVIRONMENTAL PERFORMANCE*

We examine the relationship between lean manufacturing practices and environmental performance as measured in terms of air emissions and resource use. We draw on two unique surveys of 31 automobile assembly plants in North America and Japan, which contain information on manufacturing practice and environmental performance, as well as in-depth interviews with 156 plant level employees at 17 assembly plants. Our survey results and interviews suggest that lean management and reduction of air emissions of volatile organic compounds (vocs) are associated negatively. Lean manufacturing practices contribute to more efficient use of paints and cleaning solvents, but these in-process changes are not sufficient to meet the most stringent air regulations. We found some evidence to support the link between lean practices and resource efficiency. While our survey results were in hypothesized direction, they were not statistically significant. In-depth semi-structured interviews, however, suggest a more robust relationship, and we use them to describe some mechanisms by which all three aspects of lean management (buffer minimization, work systems, and human resource management) may be related to environmental management practices and performance.

(LEAN MANUFACTURING; ENVIRONMENTAL PERFORMANCE; HIGH-INVOLVEMENT WORK; RESOURCE USE)

Introduction

Environmental issues affect corporate strategy and policy at all levels of the organization including business, functional, and operational (Shrivastava 1995a; Starik and Rands 1995; Aragon-Correa 1998). This is reflected in the range of operational issues that have been explored in the operations literature, including supply chain management (Handfield, Walton, Seegers, and Melnyk 1997), product design (Denchant and Altman 1994), remanufacturing (Lund 1994; Hart 1997), and total quality environmental management (Willig 1994; Shrivastava 1995a; Wellford 1992). However, there is recognition that environmental concerns have traditionally been modeled as constraints on manufacturing operations (Angell and Klassen 1999). Yet, researchers have argued that in many ways pollution and inefficiency are the same problems, and that there is a shortage of research linking manufacturing process with environmental management and performance (McInerney and White 1995; Angell and Klassen 1999).

The goal of this article is to help meet this need by examining whether manufacturing practices and policies associated with superior overall manufacturing performance in the automobile industry contribute to improvements in environmental performance. An advantage specific to studying the automobile industry is that there is a clearly defined set of advanced manufacturing practices known collectively as lean production or "just-in-time" (jrT) manufacturing, which enables us to specify and explore the link between manufacturing practice and environmental performance (Womack, Jones, and Roos 1990; Womack and Jones 1996). We utilize two unique factory-level data sets, along with in-depth interviews to examine the link between advanced manufacturing practices and environmental performance in the automobile industry. We examine the relationship between different characteristics of lean production and measures of environmental performance related to air emissions and resource efficiency.

Background

In this section we describe the relationship between lean production and both environmental efficiency and emissions of volatile organic compounds (vocs). We develop two hypotheses.

Lean Production and Environmental Efficiency

Environmental efficiency, i.e., the reduction of environmental impact through more efficient use of materials and natural resources in manufacturing, is driven in large part by process and operational decisions that would fall under the category of pollution prevention. While total quality management (TQM) is a useful lens with which to examine such operational decisions relating to the environment (Willig 1994; Shrivastava 1995a), some have argued for an encompassing approach to examining the role of operations in improving environmental performance (Shrivastava 1995b; Klassen and McLaughlin 1996). One such approach is to use the elements of lean production to undertake a broad examination of the role that management systems, practices, and policies play in enhancing environmental efficiency. There are multiple ways to operationalize the concept of lean production. In this paper, we will be using MacDuffie's (1995) methodology. As discussed by MacDuffie (1995), the success of lean manufacturing stems from a combination of practices, policies, and philosophies-a combination that can be divided into three primary areas: Buffer Minimization, Work Systems, and Human Resource Management. Research suggests that all three of these factors are important to the continuous improvement of performance at lean plants (Ichniowski and Shaw 1995; MacDuffie 1995; Pil and MacDuffie 1996).