THE ROLE OF SUPPLY MANAGEMENT CAPABILITIES IN GREEN SUPPLY

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.     

A COMPARISON OF RULES FOR ALLOCATING SETUP-REDUCTION INVESTMENTS IN A CAPACITATED ENVIRONMENT

This paper builds on a recent empirical study of the setup-reduction process that suggests setup-reduction proceeds through three major stages and that each stage is dominated by a particular type of investment function. Specifically, it examines the question of how to best prioritize investments during the stage that emphasizes standardizing setups across a work center. We compare different investment-allocation rules in a multi-item, capacity-constrained, dynamic demand environment under a variety of cost, demand, and investment assumptions. This analysis shows that significant differences in benefits can be achieved depending on the way setup-reduction investments are prioritized.     

LEAN,GREEN, AND THE QUEST FOR SUPERIOR ENVIRONMENTAL PERFORMANCE

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.     

OPTIMAL PROJECT SEQUENCING WITH RECOURSE AT A SCARCE RESOURCE

We develop a dynamic prioritization policy to optimally allocate a scarce resource among K projects, only one of which can be worked on at a time. When the projects' delay costs differ, the problem (a “restless bandit”) has not been solved in general. We consider the policy of working on the project with the highest expected delay loss as if the other project was completely finished first (although recourse is allowed). This policy is optimal if: (1) the delay cost increases with the delay regardless of the performance state, (2) costs are not discounted (or, discounting is dominated by delay costs), (3) projects are not abandoned based on their performance state during processing at the scarce resource, and (4) there are no stochastic delays. These assumptions are often fulfilled for processing at specialized resources, such as tests or one‐off analyses.     

OPTIMAL AND HEURISTIC SOLUTIONS FOR THE MULTI‐ITEM NEWSVENDOR PROBLEM WITH A SINGLE CAPACITY CONSTRAINT

This research considers a multi‐item newsvendor problem with a single capacity constraint. While this problem has been addressed in the literature, the focus here is on developing simple, closed‐form expressions for the order quantities. The benefit of such an approach is that the solutions are straightforward to calculate and have managerial appeal. Additionally, we show these expressions to be optimal under a variety of conditions. For more general cases when these optimality conditions do not hold, we use these expressions as heuristic solutions. Via computational studies, we demonstrate that these heuristics are extremely effective when the optimality conditions are not satisfied.     

STAKEHOLDERS AND COMPETITIVE ADVANTAGE: THE CASE OF ISO 14001

This paper integrates a stakeholder perspective into the resource‐based view of the firm, to analyze the mechanisms that link the adoption of the international Environmental Management Standard ISO 14001 to firms' competitive advantage. This paper shows that the perceived competitiveness impact of the standard depends mostly on the involvement of firms' external stakeholders (distributors, customers, community members, and regulatory agencies) in its design. ISO 14001 is a process standard, and it is difficult for stakeholders to get credible information on the effectiveness of the standard if they are not involved in its design. Stakeholders' involvement in a firm's ISO 14001 standard becomes a valuable organizational capability, which is difficult to imitate by competitors. The analysis is supported by primary data collected from a questionnaire mailed to 152 firms, resulting in 55 observations representing 30% of the total number of firms certified in the U.S. in August 1998.