Environmental performance variation at manufacturing sites

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Why can the environmental performance of different sites vary? This is the question researchers at the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability are exploring. Guest blogger Dr Nancy Bocken explains that goal setting might help.Environmental performance variation is the gap in environmental performance (e.g. energy use, carbon emissions, waste) between best and worst performing factories. The size of environmental performance variation between factories within the same company, which manufacture similar products under similar circumstances using similar technology, can be significant. Why can factories within the same company, which make the same products, using similar technology, differ so much in environmental performance?

This is one the main research challenges the EPSRC Centre for Innovative Manufacturing in Industrial Sustainability is looking into. In our research we found that across three major sectors – fast moving consumer goods, automotive and electronics – environmental performance variation can be up to 500% across sites within the same company. Often these companies are known as industry leaders.

More than 10 years ago, Pfeffer and Sutton noticed that smart people in smart organisations do not always transfer their knowledge into action. They found that 42 food plants using similar technology in one company varied up to 300% in performance. This is not dissimilar from the environmental performance variations we identified by talking to large multinational companies (Bocken et al., 2013).

The reason why knowledge is not necessarily shared does not seem to be “complexity”. For instance, when Honda set a goal to improve the performance of its suppliers, it saw productivity increases averaging 50% across the 53 suppliers involved in the programme (Honda's BP; Best Practice, Process, & Performance). The scientific knowledge Honda used for changing production lines was concrete and simple, rather than abstract and complex (Honda's example is taken from MacDuffie & Helper, 1997). As is also found in social psychology literature, setting a goal may really help to make things happen. Then, knowledge, which sits with individual workers, may be shared.

Pfeffer and Sutton give many good insights into the causes of the knowledge-action gap, which may help us understand how to overcome this, for instance:

  • Knowing “what” is not sufficient. Often “tacit knowledge” – the knowledge people sharing by talking to each other, knowledge you obtain by trial-and-error, and demonstrating what they do to others – is not captured in databases and management systems.
  • Don't confuse memory (e.g. historical thinking) with thinking. The business rationale “this is how we always do this” may not be a very strong one but is often used.
  • Be aware of instances when talk substitutes action or fear prevents action.
  • Avoid complicated measurement systems and “over-measurement” which obstructs good judgment (common sense is important!)
  • Avoid unhealthy competition in organisations

Each of these insights can lead to very specific analysis and follow-up research. But, one of the “pitfalls” – ‘when talk substitutes for action' - made me think about the role of academics in particular. Industrial sustainability is an area, which lends itself to jargon and discussion around terminology. Being aware of instances when talk takes the upperhand over action is important. Can this awareness in itself lead to more action than just talking? Certainly, the best action to overcome the gap between knowledge and action is action – an unsurprising recommendation by Pfeffer and Sutton! Action based research and research close to practice may be the way forward to tackle this research area and make a real difference.

In our Centre, we are developing research in close cooperation with companies. For example,Simon Roberts has developed a framework of sustainable manufacturing best practices. A case study with an automotive company ran last year based on these practices has already identified £50k in cost savings for the company involved. Aanand Davé's work on factory modelling seeks to support the progress towards sustainable factories by developing methods for data analysis of factory building and manufacturing systems, and is being tested with companies in the furniture, automotive and aviation industry. Lampros Litos is approaching eco-efficiency in production facilities by researching the systemic capabilities that promote sustainable manufacturing. His work includes participative case studies with manufacturers

If you are interested in knowing more about our work, or want to serve as a case study of one of our researchers who can give you new insights from their research, do not hesitate to contact us.Sources

  • Bocken, N., Morgan, D., Evans, S. 2013. Understanding environmental performance variation in manufacturing companies. Journal of Productivity and Performance Management, Special issue on performance measurement of sustainable supply chains, 62 (8). (Open access version: https://www.repository.cam.ac.uk/handle/1810/245026 )
  • EPSRC Centre for Innovative Manufacturing in Industrial Sustainability: www.industrialsustainability.org
  • MacDuffie, P. Helper, S. 1997. Creating Lean Suppliers: Diffusing Lean Production through the Supply Chain. California Management Review, 39 (summer), 118-150
  • Peffer, J., Sutton, R. 2000. The Knowing-Doing Gap. How smart companies turn knowledge into action. Harvard Business School Press, Boston MA.

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