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RESEARCH BRIEF: Manufacturers and suppliers work together to achieve results in manufacturing and environmental performance

Takeaway: Companies that proactively engage with their suppliers or customers on environmental issues may reap the rewards in performance. Engaging in a joint planning and decision-making process with suppliers or customers can decrease the environmental impact of supply chain activities and increase the quality, delivery, and flexibility of manufacturing.  

Suggested audience: Top leadership, corporate citizenship managers and professionals with responsibility for environmental performance, investors, plant managers

Increasingly, companies are being held accountable for their environmental performance by various stakeholders. By working closely with suppliers and customers, the researchers found that both environmental and manufacturing performance can be improved.

The researchers examined the relationship between supply chain management and environmental and manufacturing performance and defined the collaboration between manufacturers and suppliers or customers as a joint planning and decision-making process about environmental issues.   They looked at the impact of environmental collaboration on the four major manufacturing performance variables listed below. Survey respondents compared their performance to their competitors on these measures, in addition to environmental performance:

  • Cost
  • Quality
  • Delivery
  • Flexibility
  • Environmental performance (solid waste disposal, air emissions, water emissions)

The researchers also included manufacturer data regarding the scrap rate, on-time delivery, cycle time, and set-up time in their analyses. Control variables included plant size, age of presses, and parent company size.

Key findings:
Environmental collaboration between manufacturers and suppliers can have a positive and significant impact on manufacturing and environmental performance and found that companies who engaged in environmental collaboration performed better on a number of dimensions.

  • Supplier collaboration was mostly linked to superior delivery and flexibility performance: process-based performance in the form of fast deliveries, reliable deliveries, and a greater ability to cope with unforeseen events.
  • Customer collaboration was mostly linked to better quality performance in the form of conformance to specifications and durability. 

Keywords: environmental management, supply chain, environmental performance, US, Canada, firms, supplier relationships, manufacturing performance, manufacturers, package printing industry

If citing, please refer to the original article: “Environmental management and manufacturing performance: The role of collaboration in the supply chain”, 2008, International Journal of Production Economics, Volume 111, Pages 299–315, Stephan Vachon and Robert D. Klassen

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