Operations and environment: an expanded focus for TQM. (total quality management)

Introduction

Environmental issues have become critical concerns of business in recent years. For manufacturers especially, compliance with regulations, potential legal findings of financial liability for environmental damage and increasing customer scrutiny of environmental effects related to product manufacture have made the environmental factor a key strategic variable with implications for the design of products, the design of processes and process operating procedures. In the case of industrial customers, scrutiny of the impact of supplier operations on the environment has gained formal recognition in many of their supplier certification processes, and is common enough to warrant the development of national and international standards and laws for use in certification of supplier environmental impact (e.g. ISO TC-207, BS 7750 and the German Packaging Law of 1991).

The environmental movement, and much of today's environmental regulation, has traditionally been viewed as a costly deterrent to productivity. In progressive firms, however, environmental excellence is beginning to be viewed as a source of competitive advantage. In a recent survey of strategic decision makers in a cross-section of US and multinational corporations[1], Gordon Allardyce (manager of environmental, energy and regulatory planning) of the Chrysler Corporation presents this viewpoint:

Environmental concerns play a significant role in the formulation of corporate strategies. The company (has sought to) design "world class" manufacturing (facilities) that would exceed today's environmental requirements as well as provide the flexibility to adapt to and meet new requirements. This practical approach to investment in the future will ensure environmental excellence well into the 21st century. Chrysler recognizes this approach as key to remaining competitive in an increasingly global market...Additionally environmental issues fit very well with the Corporation's priorities to be a leaner, more efficient entity... Environmental process and manufacturing efficiency are inextricably linked. There are few processes that when operating at peak efficiency don't consume less energy and raw materials or emit less pollution.

Indeed, improvements in the management of operations resulting from such progressive viewpoints have lead to millions of dollars of documented annualized savings through proactive environmental excellence in several progressive companies.

At the same time, operations management (OM) research has yet to recognize the importance of environmental issues to manufacturing operations. In fact, our review of literature pertinent to management of environmental impact found only one article [2] - out of over 2,500 since 1988 - from the ten journals listed by Barman et al.[3] as most relevant to OM research. Consequently, the purpose of this article is to highlight practitioner-reported synergies between the proactive approach to improving operations which comes with TQM and environmental excellence. This should help practitioners and academics to gain a better appreciation of the importance of proactive inclusion of environmental issues in their current decision-making processes and aid in the development of improved decision-making processes. In the following pages we pursue our stated purpose through: developing an understanding of the parallels between US business perspectives on quality in the 1950s and US business perspectives on ecology in the 1990s; discussing anecdotal evidence suggesting the potential of a broadened definition of TQM for managing manufacturing's environmental impact; and providing a call for further exploration of TQM, or other approaches to dealing with critical issues related to manufacturing and the environment, in OM research.

Trends forcing environmental issues into the management of operations

In his 1956 Harvard Business Review article entitled "Total quality control", Feigenbaum[4] presented the seminal arguments that have grown into the TQM revolution of the late twentieth century. Feigenbaum, at that time, noted three trends.

(1) Customers - both industrial and consumer - have been increasing their quality requirements very sharply in recent years. This tendency is likely to be greatly amplified by the intense competition which seems inevitable in the near future.

(2) As a result of this increased customer demand for higher quality products, present in-plant quality practices and techniques are now, or soon will be, outmoded.

(3) Quality costs have become very high. For many companies they may be much too high if these companies are to maintain and improve their competitive position over the long run.

Feigenbaum comments:

Taken together, these three trends spell out the twin quality objective that 1956 competitive conditions present to American business management: (a) considerable improvement in the quality of many products and many quality practices, and, at the same time, (b) substantial reductions in the over-all costs of maintaining quality.

Aside from the obvious current relevance of Feigenbaum's assertions regarding quality management and the subsequent TQM revolution, we believe that a parallel phenomenon can be observed in 1994. This parallel phenomenon, specific to the ecological practices of manufacturers, is seen in three trends:

(1) It is apparent that pressures to improve the ecological efficiency of manufacturing operations are increasing with the growth in population and standards of living. Despite the occasional localized recession, the volume of products and services being consumed is clearly on the rise. So, too, the volume of post-consumer waste appears to be rising, and along with it the volume of solid, liquid and atmospheric by-products discarded by manufacturers. Along with the discarding of materials have come problems which society is grappling to deal with - some of these are ground water contamination, toxic waste, radioactive waste, ozone loss, global warming and shortages of land-fill space. In light of the perceived environmental deterioration, environmental issues have come to be central to many societal debates. In short, customers - both industrial and consumer - have been increasing their environmental requirements very sharply in recent years. This tendency is likely to be greatly amplified by the intense public pressures which seem inevitable in the near future.

(2) A trend among product consumers to demand products and services which are demonstrably "environmentally friendly" is on the rise. Not only are individuals involved in requiring this of manufacturers, but they are largely aided by watchdog organizations, the modern media and legal requirements for disclosure of the environmental impact of manufacturing activities. A clear indication of the trend towards disclosure is seen in a recent study of corporate environmental reporting by the International Institute for Sustainable Development[5]. This report states: "Certainly the voluntary environmental reporting initiatives undertaken by some of the companies discussed in Coming Clean are profoundly changing (and raising) society's …