Sustainable performance in manufacturing operations: The cumulative approach vs. trade-offs approach

Abstract

Sustainability improvement has become a priority for manufacturing companies due to increasing pressures from stakeholders. However, companies often struggle to find sustainability frameworks for their day-to-day decision-making processes, which leads to failed adoptions of sustainability practices, or sub-performance in certain sustainability dimensions. The triple bottom-line approach has been adopted by companies to measure and manage sustainable performance, but many have concerns on how to address each sustainability pillar and strike a balance among them. This paper proposes two different models: the cumulative model which follows a “sand-cone” approach, with operational performance at the base, and environmental and social on top, and the “trade-offs” model which suggests that improvements in one dimension come at the expense of another. The two models were tested using structural equations modelling, with data collected from Colombian manufacturing companies. Results suggest that sustainable performance follows the cumulative approach, in which operational performance has a positive impact on both environmental and social performance. Environmental performance also has a positive effect on social performance, and there is an indirect effect of operational performance on social performance. Regarding the trade-offs model, the results do not provide sufficient evidence to support this approach. This paper presents a significant contribution as it extends two common operations management approaches (the sand-cone and trade-offs) to sustainable manufacturing, giving light on the complex interactions between sustainability dimensions, and providing empirical evidence for the proposed models. The results are helpful for managers and practitioners to implement and pursue sustainable manufacturing models in their organizations.