A recent study into collaborations in supply chains revealed that better environmental management practices can improve manufacturing quality and reduce costs.
A recent study on sustainable supply chains showed that efforts to improve environmental management through upstream and downstream collaboration could have the added benefit of improving performance on the part of the manufacturer. The North American study highlights how such collaborations could be mutually beneficial to producers and their partners.
Research in the study showed that, as manufacturers extend their efforts to improve environmental sustainability by collaborating with suppliers, distributors and consumers, their output benefits in terms of quality, delivery, and flexibility. Manufacturers and their supply chain partners collaborated in a variety of environmental management programmes, such as: joint environmental goal setting; sharing technical information; and shared environmental planning; as well as combined efforts to reduce pollution and other environmental impacts.
Citing the example of environmental management collaboration in the Northern American printing industry, the study highlights how working together with upstream associates resulted in improvements in the process-based performance. These improvements manifested themselves in the form of superior delivery and greater flexibility on the part of the suppliers. Equally, joint goal setting further increased the speed and reliability of delivery. This type of improvement could lead to the enhanced financial performance of the manufacturers.
Downstream collaboration led to improvements in the production quality of the manufacturers, namely increased durability and a greater conformance to specifications of products. A competitive advantage can be gained by involving downstream stakeholders through developing the capacities of the organisation. In addition, collaboration with customers on environmental issues may stimulate organisations to: evaluate product quality; improve the performance of their products; and reduce scrap rates.
Environmental management and manufacturing performance: The role of collaboration in the supply chain; Stephan Vachon (email@example.com) and Robert D. Klassen; International Journal of Production Economics, Volume 111, Issue 2, February 2008: http://www.sciencedirect.com/science/article/pii/S0925527307001892