Presentation about the impact of sustainable manufacturing practice on sustainability performance

1. iDECON 2012
Sustainable Manufacturing Practices towards
Performance Improvement
By
Norsiah Hami
Prof Dr. Mohd. Razali Muhamad
Dr. Zuhriah Ebrahim

2.  Introduction
 SM concept & practices
 Sustainability performance
 Conceptual model
 Conclusion
Presentation Outline

3. Introduction
o In recent decades, manufacturing industries worldwide are
faced with a new pressing challenge on sustainability due to
scarcity of resources being increased, rapid global
environment deterioration, and human beings pursuing
higher life quality.
o The expansion of economic activity has been accompanied by
growing negative environmental impacts.
 Manufacturing is the main source of consuming natural
resources with toxic by-products and wastes (Feng & Joung, 2009;
Yuan, 2009).
 About 12 billion tons of industrial wastes are generated annually
in the US and over one third of these wastes are hazardous
wastes (Yuan, 2009).

4. Introduction (cont.)
 Some of the raw materials and energy resources used in
manufacturing industries are non-renewable and often, toxic
pollution is vented off into the atmosphere and waste is
disposed of indiscriminately (Kibira, Jain & McLean, 2009).
 The energy consumption of manufacturing industries worldwide
grew by 61% from 1971 to 2004 and accounts for nearly a third of
global energy usage. Likewise, they are responsible for 36% of
global carbon dioxide (CO2) emissions (IEA, 2007).
 In Malaysia, the total final energy consumption in 2008 was 44,901
ktoe, while about 42.6% of them have been used by the industrial
sector (APEC 2011).

5. Introduction (cont.)
o In response, what is needed now is a new vision and policies
that will enable the creation of economic prosperity that go
hand in hand with a reduction in negative environmental
impacts.
⇨ Sustainable development – “to meet the needs of the present
without compromising the ability of future generations to meet
their own needs” (Brundtland Report, 1987)

6. Introduction (cont.)
Objective..
..to develop a conceptual model of achieving
sustainability performance through implementation of
Sustainable Manufacturing practices

7. SM Concepts & Practices
Sustainable Manufacturing…
o creation of manufactured products that use processes that
are non-polluting, conserve energy and natural resources,
and are economically sound and safe for employees,
communities, and consumers (U.S. Department of Commerce,
2007)
o an evolutionary concept that evolves as a consequence of
adaptation to changing circumstances

8. Figure 1: The evolution
of SM concepts &
practices

9. SM Concepts & Practices (cont.)
Pollution control…
o application of technological measures that act as non-essential parts of
existing manufacturing processes at the final stage of these processes
(OECD, 2009)
Cleaner production….
o focuses on pollution prevention at source (in the product and the
manufacturing processes) rather than remove it after it was created
o consists of reducing, changing or eliminating pollution output through
good housekeeping practices, substituting raw materials, optimizing
processes, shifting to green technologies and designing new products

10. SM Concepts & Practices (cont.)
Eco-efficiency…
o delivery of competitively priced goods and services that satisfy human
needs and bring quality of life while progressively reducing
environmental impacts of goods and resource intensity throughout the
entire life cycle to a level at least in line with the Earth’s estimated
carrying capacity (WBCSD, 1996)
Life cycle thinking….
o environmental considerations go beyond the manufacturing facility to the
entire value chain (OECD, 2009)
o Green Supply Chain Management (GSCM)
o Corporate Social Responsibility (CSR)

11. SM Concepts & Practices (cont.)
Closed-loop production…
o an upgraded system from the concept of Life Cycle Thinking in which a
modification of the final stage of the production system has been made
by closing material resource cycle
o focuses on recovering the components and extending its life through
remanufacturing, recycling or reuse
Industrial ecology….
o improvement and collaboration among the various types of industries
o Eco-industrial Park - businesses cooperate with each other and with
local communities in order to reduce waste and pollution, efficiently
share resources and assist in achieving sustainable development, which
aims to improve economic profit in line with the increase in
environmental quality

12. Sustainability performance
Economic
Performance
Environmental
Performance
Social
Performance
Sustainability
Performance
Figure 2: Three dimensional Indicators of sustainability performance

13. Sustainability performance (cont.)
o Sustainability through SM practices - some theoretical and
empirical evidence.
 Nameroffa et al. (2004) → At the early stages, concentration made
on end-of-pipe control dramatically reduced emissions of some of the
worst toxic substances.
 In order to avoid contamination in the first place, manufacturers can
reduce or eliminate the cost of regulation, the use of materials, and
waste disposal, and reduce the risk, particularly relating to the
manufacture and use of chemical products and processes.
→ In recent years, the disposal costs have increased significantly due to the
depletion of incineration and land filling capacities (Ahiska & King, 2010).

14. Sustainability performance (cont.)
 Høgevold & Svensson (2012) → pure dedication beyond the level of
compliance may pay off in the long run. Spin-off effects are better
corporate reputation in the market and society.
 Reports on environmental protection efforts in the Japanese
automobile industry by JAMA(2007) → greater reduction in CO2 and
VOC emissions and waste matter in plant operations, advances in
end-of-life vehicle recycling, expanded introduction of low-emission
cars, and greater achievement on fuel-efficiency performance of new
gasoline-powered passenger cars

15. Sustainability performance (cont.)
 Høgevold & Svensson (2012) → It appears that achieving the best
results of business sustainability occurs when the whole demand and
supply chain networks are taken into consideration, and not only
focus on carbon impact of their own company's business operations
 Su et al. (2010) → positive link between CSR and corporate
efficiency
 Moneva et al. (2007), Samy et al. (2010) & Oeyono et al. (2011) →
positive link between CSR and financial performance

16. Conceptual model
o Much of the effort of previous research has emphasized the
linkage between economy and environment with less attention
paid to the social or community dimension of sustainability .
o Since industry is a human creation and humans are social
components, we need an approach which brings industry and
environment together with a social or community perspective
Therefore, we suggest that SM practices need to be evaluated on
the basis of impact of these activities on social as well as
economic and environment.

17. Conceptual model (cont.)
o Pollution is a form of economic waste, which reflects that the use
of resources is incomplete, inefficient, and/or ineffective.
o Through the implementation of effective SM practices that
emphasize the reduction or prevention of pollution, manufacturers
will be able to improve operational efficiencies such as reduced
overall manufacturing costs, better product quality, reduced cycle
times, and better flexibility. In addition, manufacturers tend to
achieve competitive advantage from the establishment of the
reputation as a "green and responsible", create new markets and
increase or maintain market share.
Therefore, we suggest that SM practices will improved economic
performance.

18. Conceptual model (cont.)
o With the aim to improve environmental sustainability by reducing
consumption of natural resources and reduce harmful emissions
to the atmosphere, at the same time, the practice of SM also
contributes to the greater achievement of social sustainability.
 E.g. - taking into account environmental aspects in the production of
products such as removal of unsafe levels of toxic substances from
the manufacturing process, they not only protect the environment but
also health and work safety. The employees will tend to feel more
secure and more satisfied with their work.
Therefore, we suggest that SM practices will improved
environmental and social performance.

19. Conceptual model (cont.)
Figure 3: Conceptual model of achieving sustainability performance through
implementation of SM practices

20. Conclusion
o Based on the investigations of the related literatures, a
conceptual model of achieving sustainability performance through
implementation of SM practices is developed.
 SM practices → cleaner production, eco-efficiency, lifecycle thinking,
closed-loop production, & industrial ecology
 Sustainability performance → economic, environmental & social
o Further research suggestion
 test the arguments empirically using qualitative and quantitative
approaches.
 utilize longitudinal analysis in studying the SM practices towards
sustainability attainment

21. Thank you…