Environmental sustainability from a decoupling point perspective

Abstract

Combatting climate change is of global importance. The fact that all UN member nations have agreed on the sustainable development goals (SDGs) is testament to this. The manufacturing industry plays a crucial part in meeting these goals. However, if manufacturing firms are to improve in terms of sustainability, such efforts must be reconcilable with their ability to make profit. Hence, sustainability efforts must be adapted to firms’ individual context and competitive priorities.

Focusing on environmental sustainability, this paper is the first to empirically investigate and compare the commitment to environmental sustainability practices (ESPs), and the outcomes of such practices, across make-to-order (MTO) and make-to-stock (MTS) manufacturing plants. Furthermore, the paper investigates whether the customer order decoupling point moderates the relationship between characteristics of lean and agile manufacturing and ESPs. Hypotheses are developed based on extant literature and tested. The results indicate that MTO plants experience more benefits related to manufacturing and financial performance from their ESPs than MTS plants. The data also show that the association between ESPs and the outcomes of such practices are more robust for MTO plants than they are for MTS plants. Plausible explanations for these results are discussed and the findings of the paper are connected to the contemporary topic of smart manufacturing, as well as potential policy implications. Suggestions for future research are also provided.