Knowledge that Transforms

Firms are often encouraged to offer environmentally friendly products as a demonstration of corporate citizenship. However, this may prove to be an unrealistic expectation since a rational firm will only engage in profitable ventures; those that increase shareholder wealth. We develop a framework for analyzing the profitability of reuse activities and show how the management of product returns influences operational requirements. We show that the acquisition of used products may be used as the control lever for the management and profitability of reuse activities. These activities, termed product acquisition management, affect several important business decisions. First, if a firm is to pursue reuse activities, these reuse activities must be value‐creating. Second, if a firm is to compete by offering remanufactured products, then we show how product returns management influences the overall profitability of such activities via a trial and error EVA approach. Third, we show how operational issues are strongly affected by the approach used to manage product returns. There is a need for future research specifying the mathematical relationship between acquisition price and the nominal quality of the returned product.

Managers realize that they should avoid complex green supply initiatives when they do not have the capabilities to implement them. However, they have little guidance on how these capabilities can be developed. This paper provides an initial analysis of the role of supply management capabilities in green supply. We argue that the implementation of green supply is better explained by focusing on the development and deployment of an organization's specialized internal resources, rather than by the more usual focus on external environmental pressures on a firm. Further, we argue that capabilities appropriate for green supply are developed by a proactive corporate environmental stance and by a more strategic purchasing and supply management approach. We test our model using data from a two‐phase survey of 70 operating units within UK public limited companies. Our results indicate support for our conjecture that supply management capabilities are jointly developed by a proactive corporate environmental approach and a strategic purchasing and supply process. Our study results should be useful to business strategists, regulators, and researchers interested in the predictors of corporate green behavior. They should also assist future researchers in many branches of environmental management who are seeking to explore the role of the internal capabilities of firms in supporting environmental management.

Lean production may have a significant public good spillover—improved environmental performance. However, empirical evidence of the link between lean production practices and environmental performance has not resolved the nature of the relationship. To explore this issue, we conduct an empirical analysis of the environmental performance of 17,499 U.S. manufacturing establishments during the time period 1991–1996. We find that those establishments that adopt the quality management standard ISO 9000 are more likely to adopt the environmental management standard ISO 14000. We also find strong evidence that lean production, as measured by ISO 9000 adoption and low chemical inventories, is complementary to waste reduction and pollution reduction.

We examine the relationship between lean manufacturing practices and environmental performance as measured in terms of air emissions and resource use. We draw on two unique surveys of 31 automobile assembly plants in North America and Japan, which contain information on manufacturing practice and environmental performance, as well as in‐depth interviews with 156 plant level employees at 17 assembly plants. Our survey results and interviews suggest that lean management and reduction of air emissions of volatile organic compounds (vocs) are associated negatively. Lean manufacturing practices contribute to more efficient use of paints and cleaning solvents, but these in‐process changes are not sufficient to meet the most stringent air regulations. We found some evidence to support the link between lean practices and resource efficiency. While our survey results were in hypothesized direction, they were not statistically significant. In‐depth semi‐structured interviews, however, suggest a more robust relationship, and we use them to describe some mechanisms by which all three aspects of lean management (buffer minimization, work systems, and human resource management) may be related to environmental management practices and performance.

Efficient implementation of closed‐loop supply chains requires setting up appropriate logistics structures for the arising flows of used and recovered products. In this paper we consider logistics network design in a reverse logistics context. We present a generic facility location model and discuss differences with traditional logistics settings. Moreover, we use our model to analyze the impact of product return flows on logistics networks. We show that the influence of product recovery is very much context dependent. While product recovery may efficiently be integrated in existing logistics structures in many cases, other examples require a more comprehensive approach redesigning a company's logistics network in an integral way.