Russell and Millar ISISA2012

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					 The adoption of sustainable
manufacturing practices in the
           Harvey H. Millar, Ph.D., P. Eng.
      Sobey Business School, Saint Mary’s University

                Suzana Russell, Ph.D.
            University of Trinidad and Tobago

             Islands of the World XII Conference
                      May 29, 2012, BVI
   Overview of research
      Background
      Objectives of the study
   Participant overview (demographics)
   Results of survey
   Observations and limitations of study
   Recommendations
             Overview of research
   Now widely accepted that manufacturing entities have a
    vital role to play in the quest for sustainability - consume
    significant amounts of resources and generate waste
        On a global scale, worldwide energy consumption of
         manufacturing industries grew by 61% (from 1974 to 2004) and
         accounts for nearly a third of today’s global energy usage and is
         responsible for 36% of global carbon dioxide (CO2) emissions
         (IEA, 2007)
        In addition to the environmental importance sustainability has
         been emerging as a new means to achieve differentiation for
         many companies (Shahbazpour and Seidel, 2006)
   Even though there are clear economic and business
    incentives for the development of sustainable operations
    one questions whether manufacturing firms are actually
    adopting sustainable manufacturing practices
             Overview of research
   Several studies have             looked     at   the   uptake   of
    sustainability practices
        New Zealand (Collins et al., 2007); UK (Arup, 2007)
   Few studies on environmental practices of SMEs
   Little, if any, on the Caribbean
   Primary objective – to assess the current sustainable
    manufacturing practices of Caribbean manufacturers
            Research questions
   Are Caribbean manufacturers aware of the meaning and
    concept of sustainable manufacturing?
   To what extent are Caribbean manufacturers engaging in
    sustainable manufacturing practices?
    What sustainable manufacturing practices are they
    currently engaged in?
    What are the barriers preventing the adoption of
    sustainable manufacturing practices?
    What would drive or motivate companies to adopt
    sustainability practices?
           Research objectives
   To determine the extent to which Caribbean firms are
    aware of the concept of sustainable manufacturing
   To identify the current practices of sustainable
    manufacturing in the Caribbean
   To determine which factors influence the barriers and
    adoption of sustainable manufacturing practices
   1st approach – web-based targeting manufacturing firms
    in 5 Caribbean islands
        Barbados, St. Lucia, Guyana, Jamaica, Trinidad and Tobago
        Letter sent to manufacturers’ associations asking them to invite
         their members to complete online survey
        Very few responses
   2nd approach – visit the various countries to solicit
        Free seminar on ‘Sustainable Manufacturing’              where
         manufacturers were invited to complete the survey
        Total of 76 companies participated
                         Survey design
   Based on survey instrument used in pilot study on
    manufacturing and sustainability in Atlantic Canada
    (Millar, 2005)
   32 primarily multiple-choice questions, mainly closed-
   5 main sections
       demographics
       awareness of sustainable manufacturing
       sustainable manufacturing practices
            Practices used to represent life-cycle view or systems view of manufacturing
       adoption of new practices
       barriers to engagement
   Data analysed using SPSS
   81 % of companies have been in operation for >10 years
        Majority of the participating manufacturing firms can be regarded
         as mature organisations
   91% of respondents occupied senior positions such as
    CEO, director, production, operations or plant manager
        One can assume a certain level of credibility with the results
   Industry sectors
        Food, beverages and tobacco
        Metals, metal products
        Textiles, apparel and leather
        Wood, wooden products, furniture
        Rubber and plastic products
        Stone, clay, glass, and concrete products
Annual sales

       63% have sales under $5 million USD
       80% earn less than 40% of their sales
        from exports
       70% - privately-owned limited liability
        Caribbean companies
         Awareness of sustainable
   Manufacturers were asked to indicate their level of
    awareness of related manufacturing approaches such as
    green manufacturing, clean manufacturing and sustainable
        Fewer than 50% claimed strong awareness
        Clean manufacturing had largest number of respondents (43%)
         claiming strong awareness
        80% of the manufacturers are either strongly aware or somewhat
         aware of all approaches - an indication that many Caribbean
         manufacturers are in fact aware of sustainability issues
        Awareness of clean manufacturing and green manufacturing
         positively correlated with sustainable manufacturing (sig. at the 1%)
        Not surprising as terms are used interchangeably in literature
       What is the meaning of
     sustainable manufacturing?
   Some spoke of environmental aspects
        ‘Manufacturing that has the least possible impact on the
        ‘Ensuring continuity over generations’
        ‘Keeping non-renewable resources to a minimum and using them as
         efficiently as possible’
        ‘Using renewable and recycled inputs wherever practical’
   Many viewed sustainable manufacturing entirely from a
    business perspective
        ‘Business viability’
        ‘Survival’
        ‘Minimisation of imports’
   Wide‐ranging responses suggest that Caribbean manufacturers
    are still not entirely clear what sustainable manufacturing actually
         Triple-bottom line measures
   Manufacturers were also asked to indicate their level of
    familiarity with the concept of ‘triple bottom line’
     17% claim strong awareness
     33% are not aware of the concept at all
     Most of the companies (61%) emphasize economic measures
     Least emphasis on environmental measures

 Economic indicators used include increase in sales, profitability,
  return on investment (ROI), return on equity (ROE) and current ratio
 Social indicators include donations to the community, employee
  satisfaction surveys, human resource index and sponsorship or
  assistance to the public
 Environmental measures reported on include waste level and
  emissions, environmental footprint, air quality and noise pollution and
  CO2 emissions
               Current SM practices
   Practices with respect to manufacturing input materials, manufacturing
    processes, packaging, waste disposal, supply chain management and
    social responsibility actions
   Results indicate that low levels of adoption of sustainability practices is
    taking place in the Caribbean
        Examples are provided in the next slides for processes and supply
        chain management.
Practices in manufacturing
Sustainable supply chain
        Reasons for non-adoption

   Interestingly only 6% cite cost as a barrier
   Literature shows that SMEs tend to cite cost as one of the primary
    reasons for not adopting sustainability practices (Lawrence et al. 2006)
   Although Caribbean manufacturers are not legally obliged to adopt
    sustainability practices, only 4% cite this as a reason for not engaging
          Motivators for adopting
Drivers                   % of sample      Internal drivers/objectives
Improve quality                88          Most firms willing to adopt
Reduce waste                   88           specific practices if such
Improve efficiency             87           practices will positively impact
Increase market share          82           key performance criteria
Creation of new markets        82
                                           Interestingly, opportunity to
Differentiation (from
                                            reduce cost is not the principle
competitors)                  80
                                            business objective that will
Lower costs                   80
                                            motivate adoption
Delivery speed                76
Help to meet social
responsibility goals          75
Enable innovation             75
Improve flexibility           74
         Barriers to adopting new
   Cost identified as main potential barrier
   Lack of awareness, knowledge and education are also major barriers to
    the uptake of sustainability practices
       Some manufacturers         ‘lack the understanding as to what
        sustainable manufacturing entails’
       Others cite ‘not enough public information’, ‘training and exposure’
        and ‘lack of the required techniques and technology’ as other
        potential barriers
       Staff knowledge and capability
   Concern that input raw material that promote sustainability may not be
    readily available at competitive prices
       Material may not meet performance characteristics or meet quality
       Cost may be prohibitive
                Role of government
   Major funder
        Financially supporting manufacturers who are willing to adopt
         sustainability practices
        Monetary and fiscal initiatives – tax breaks, concessions, etc.
   Auditor
        Providing assessments of current practices and accrediting
         manufacturers as ‘sustainable manufacturers’
   Facilitator
        Providing free training and seminars on sustainable manufacturing
   Regulator/enforcer
        Pursuing and punishing major polluting companies
              Summary of research
   Study provided some insight into the level of awareness and uptake of
    sustainability practices among Caribbean manufacturers
   Study highlights the need to educate Caribbean manufacturers on the
    benefits of sustainable manufacturing, such as cost reductions in waste,
    material and energy
   Cost reduction is still a great motivator that can drive manufacturers to
   Sustainability is fast becoming an imperative, not an option, and local
    manufacturers need to capitalize on early adoption in the absence of
    legislation and regulatory pressure
       Legislation will add penalties and levies and further erode
        competitiveness of Caribbean manufacturers
       More costly in the long run to implement
   Study also reveals that Caribbean manufacturers are interested in
    learning more about sustainable manufacturing practices, which is
       Companies embracing sustainability will gain a competitive
        advantage and market share
     Key recommendations for
Caribbean manufacturing associations such as the JMA,
TTMA, GSMA, SLMA, MBA, etc. should collaborate on a
number of initiatives:
a)   Develop a shared definition of sustainable manufacturing
     contextualized by the reality of Caribbean manufacturing;
b)   Develop a framework for excellence in sustainable manufacturing
     (FESM) akin to the framework for excellence in quality.
     Manufacturers must see sustainability as a desired outcome and the
     need for a commitment to a deliberate model of practice to drive
    Key recommendations for
c) Develop a template for preparing a business case for
   sustainable manufacturing initiatives
d) Develop an SM awareness strategy that makes it very
   clear that sustainability is about resource productivity
   and that resource productivity can lead to lower costs
   and improved quality
e) Using the framework for excellence in sustainable
   manufacturing (FESM) develop training initiatives for
   Caribbean manufacturers
     Key recommendations for
f) Develop an information website on sustainable
   manufacturing in the Caribbean
g) Develop policy prescriptions for regional governments
   so as to create a climate for the growth of sustainable
h) Work collaboratively with the region’s community
   colleges to provide relevant technical education on
   sustainable manufacturing. These institutions can help
   to train manufacturing personnel in the field

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