Operations Management and Sustainability

Sustainable operations management (SOM) and strategy concerns the procedures, processes, practices and systems through which firms—individually or organized in wider inter-organizational structures—initiate, create and deliver outputs that are both profitable from a business perspective, using the resources at their disposal while at the same time taking preservation or even improvement of the natural and/or social environment into account. This builds on the recognition, that companies must also take sustainability issues into account in order to ensure long-term success and survival (Hart, 2005; Starik, Kanashiro, & Collins, 2017). Thus, in a sustainable business context, strategy and management research builds on more general insights from these disciplines but seeks to apply it in the context of sustainability. Sustainable operations provide an interesting context for exploring further the nature of strategizing. However, concepts and insights emanating from a sustainability focus may also provide important insights to the strategy and management disciplines. Research on the triple bottom line is an influential point of reference for strategizers as well as for strategic research linking to the SOM agenda (Lee, 2004). Another important conversation relates to the crucial link between research on strategic innovation and blueprinting sustainable operation systems with a strategic impact on company identity and operations. Research on strategic innovation and disruption may find disruptive operations management designs not only useful as research areas but they also have the potential to provide insights that fundamentally challenge existing conceptualizations. Understanding the meaning of market disruption as opposed to market discovery, discussed among entrepreneurs and new business venturists, are anchor points.

The field of sustainable operations management will benefit by linking with the strategy literature to understand complex issues facing firms. This chapter focuses on the role of environmental regulations. The literature on Porter’s hypothesis suggests that firms that face more flexible environmental regulations are able to perform better than those that face more inflexible regulations. Using data from a questionnaire survey in the UK and the resource-based view (RBV) theory, this hypothesis is empirically analyzed in this chapter. Data envelopment analysis and one-way ANOVA are used as analytic tools. Results confirm our hypothesis that operations innovation is significantly higher in firms that face more flexible environmental regulations than in those that face relatively more inflexible environmental regulations.

The chapter explores the set of norms governing the relational exchange between suppliers and buying companies and the changes to these norms brought about by the introduction of sustainability requirements. Norms play a significant role in determining the behavior characteristics in contractual and relational exchanges. The author interviewed 30 suppliers, to shed light on how the introduction of sustainability requirements has affected the applied exchange norms. She found that suppliers have experienced that the behavior of buying companies has become more transactional. The norm set of buying companies has changed and may be separated into two: a previous set of norms and a sustainability-related set of norms.

This part of the book concerns theoretical developments in the sustainable operations management (SOM) research field. Sustainable operations management is a growing research field with clear and distinctive roots in organizational and managerial practice, linking to mainstream research on operations management (Angell & Klassen, 1999; Pagell & Shevchenko, 2014). It has also a strong emphasis on pragmatism, predominantly touting technical papers and best-case examples (Min & Kim, 2012; Seuring & Müller, 2008). For this reason, it has been heralded by managers and other practitioners (Joas, Theobald, McGuinness, Garzillo, & Kuhn, 2013). The route from research results to the practical implementation of concepts in business seen in examples such as the use of life-cycle assessments and cradle-to-cradle principles in public purchasing policies is relatively fast.

Despite the growing recognition of the benefits promoted by new business initiatives in the circular economy, little is currently understood about the eco-innovative features of the new business models in this context and the enabling role of “circular” supply chains supporting such models. This chapter offers theoretical propositions that describe fundamental features of a circular supply chain archetype in terms of scope, focus and impact. Novel insights lead to a formal definition of circular supply chain and a more coherent foundation for future inquiry and practice. A discussion of key “circularity” aspects of business models provides a practical illustration of both the theoretical concepts addressed in the chapter and real-life business examples of circular economy praxis.

We develop an empirically grounded understanding of Environment-Specific Sustainability-Oriented Innovation (ES-SOI) in the technology-intensive aviation sector. Focusing on the Boeing-Airbus duopoly, we use secondary and archival data from several sources (e.g., sustainability reports and databases). Methodologically, manual coding and centering resonance analysis (CRA) based clustering techniques are used to arrive at distinct types of ES-SOI. Specifically, resource consumption and resource efficiency are salient in the ES-SOI. We conclude with how these distinct ES-SOIs could extend theoretical deliberations on the SOI.

Through the analysis of 15 negative social and environmental events, the effect of sustainability-related issues on the market value of supply chain partners is investigated. Event studies were conducted on 82 companies, valuing the market reaction to the stock price of a firm due to triggering events occurring in another. The results show that while some events have caused hard reactions on the market value of the studied companies, the assessment of the general effects of each event, as well as the analysis of the whole sample, did not allow for such a conclusion. By adopting an incidental stakeholder perspective, this inquiry offers new insights into the substance of sustainability and sustainable operations management within supply chain frames.

The maximization of retained value is one of the determinants in the circular economy (CE) that can prolong a product’s economic and functional values. This chapter aims to maximize the retained value of recovered products based on CE principles. The approach has mainly been conducted through desk-based research. The steps to maximize retained value are developed by adhering to the rules of product cannibalization (one of the product recovery options). This research contributes to describing the embedding process of CE principles, specifically maximizing retained value into product recovery (cannibalization activity), providing some parameters, and formulating the mathematical formulation for product recovery in maximizing retained value. The personal computer (PC) is selected as a product example case to describe the clear process of maximizing the retained value of product recovery.

Increasing the share of intermodal transport is a promising way to reduce CO₂ emissions. This chapter examines the key drivers increasing the share of rail-based intermodal freight transport in Europe. The institutional theory is used to identify the drivers, and the literature is reviewed to categorize the main external and internal drivers that could support a shift from road to rail. The framework is then used as the basis for a qualitative case study developing initial insights concerning the importance of drivers in the logistics sector. The findings indicate that there are several drivers that may increase the market share of rail transport, and they can be grouped into three categories. We propose a number of ways to increase the purchase of intermodal transport.

To face the challenges of a sustainable development, advanced capabilities are needed to fertilize sustainable corporate development on the level of operations management. Thus, this chapter describes the approach of participatory systems mapping (PSM) to fill knowledge gaps for required dynamic capabilities (DCs) in the field of sustainable supply chain management (SSCM). Accordingly, the approach’s ability to solve issues in complex systems is applied to the question of how logistics service providers (LSPs) can contribute to creating more sustainable production and consumption systems. The results derived from several workshops were mapped into a causal loop diagram (CLD) describing relevant variables and their causal relations. Finally, these relations are discussed in a broader SSCM context to promote further theory building.

Previous environmental studies indicate several barriers to circular economy and material efficiency including a lack of detailed methodologies for manufacturing improvement in terms of environmental and operational performances to measure, monitor and evaluate material consumption and waste generation. A lean and green tool, the green performance map (GPM), is an appropriate tool for different environmental initiatives including training, improvement, reporting and development. Through literature review and multiple case study methodology, this chapter presents the current application of GPM in industry and its usage to regularly measure and monitor material efficiency measurements on different levels and to remove barriers to improved material efficiency.

This chapter investigates the link between green supply chain management skills and performance outcomes in the logistics sector. Relationships between green supply chain management skills and two performance outcomes, environmental performance and innovation performance, are examined. Survey data were collected from the Finnish, Russian, Puerto Rican and Panamanian logistics sectors and the theoretical framework was subjected to analysis using structural equation modeling. The results show a positive link between green supply chain management skills and environmental performance in all four countries, whereas the link between green supply chain management skills and innovation performance was found only in Caribbean countries.

Green public procurement involves environment-related information exchange and knowledge transfer between buyers and suppliers. Existing research has paid little attention to information exchange and processing in buyers and suppliers, and very little to the public procurement setting. This chapter therefore aims to provide a novel investigation of how environment-related information is processed and used in buyers and suppliers from the view of absorptive capacity (AC). This study employs case studies and data were collected in interviews with public buyers and their suppliers in the private sector in 2015. The findings suggest that public procurement outcomes can depend on the interaction of buyers’ and suppliers’ AC. The greenness of outcome in public procurement can be dependent on how two actors interact regarding AC.