THE ESSENCE OF GREEN PRODUCTION BUSINESS STRATEGY
Green production is a business strategy that focuses on profitability through environmentally friendly operating processes. Proponents of this management philosophy contend that green production is a sensible course to follow not only because of the benefits that it bestows on the natural environment, but also because of its fundamental strategic soundness. Green business strategies based on the principle of environmental sustainability may constitute a key basis for competitive advantage in the coming decades.
Many companies that take a proactive stance toward environmental improvements in production have a decided advantage over businesses that are indifferent to, or actively oppose, new standards. First, they gain a “greener” image in the public eye. Second, because adopting new standards takes time and money, they have more time to develop methods for reducing waste and can do so on their own schedule.
Companies that wait until they are forced to change often find themselves in an expensive, last minute scramble to meet the requirements. As a result, they end up throwing more money at the problem for a less effective solution than their more proactive counterparts.
Defining and Instituting Green Production Processes
Many people think that green production simply entails instituting pollution controls or recycling programs when manufacturing goods. The reality, however, is that green production processes seek to minimize the impact of the manufacturing process on the environment at every stage. An analyst defined green production thus: “Green production focuses on three fundamental goals: 1) minimize emissions, effluents, and accidents: 2) minimize the use of virgin materials and nonrenewable forms of energy; and 3) minimize the lifecycle cost (cradle to grave) of products or services.
Green Use of Raw Materials
Growing concern over depletion of forests and other natural resources, and environmental degradation created by mining and fossil fuel production suggest that corporations may need to rethink their raw material and procurement strategies. Significant sectors of the business community especially large corporations engaged in the lumber and energy industries continue to take issues with sentiments, arguing that resources remain plentiful. But many other businesses have begun to make changes in the ways that they gather raw materials for their products.
Reliance on recyclable or renewable materials, new energy and material conservation initiatives, and replenishments programs (such as forest replanting programs) have all been touted as effective tools in establishing processes that do not unduly harm the environment.
Green Manufacturing/Production Processes
Information from industry studies and consumer research is being used to develop new products and to redesign existing products and services in order to reduce their impact on the environment. In fact, supporters of green production assert that it makes financial sense for businesses of all sizes and shapes to undertake the process of green design. Wasteful and polluting throughput processes lead to inefficient use of material and human resources as well as occupational and public health risks.
Just as the ‘zero defects’ goals in quality control demands preventive action and continuous improvement at every production step, a ‘zero waste” goal can focus efforts toward the virtual elimination of pollution. This preventive approach has proven far more efficient than efforts aimed at controlling discharges at the ‘end of the pipe’.
Corporations are realizing that pollution prevention can be a cost saving activity (e.g. by lowering compliance, waste treatment, disposal, and raw material costs).” Subsequently, some businesses have increasingly steered their products and packaging designs to use less materials or to be easily disassembled so that high value components can be recycled or refurbished more readily.
Analysts generally agree that product packaging is one of the most visible and important elements of an environmentally sensitive production operation. Examples of green packaging include the use of recycled content in packaging materials, source reduction, and refill alternatives. Whatever form the packaging takes, it should clearly state whether green claims pertain to the product or to its package.
If the particular environmental quality that is lauded applies to only a portion or component of the product or packaging, this fact must also be clearly indicated. For example, a manufacturer of aluminum foil displays a ‘recycled’ claim on a box of aluminum foil with no qualifications. But if only the box and not the foil is recycled, the claim is deceptive. The manufacturer must instead distinguish between the product and the packaging in claiming such recyclability. The exception to this rule is when only a minor, incidental component of the product or packaging is not recyclable.
The “Environmentally Sustainable” Company
Companies that wish to embrace green production philosophies and processes after years of indifference usually have to redesign significant aspects of the business, including its mission and vision, competitive strategies, core technological systems, performance measurement and reward systems, and organizational processes and culture (of course, this task is more formidable for larger companies than it is for small and medium sized firms).
Of the above elements of a business, perhaps none is more important than “mission and vision,” for all the other aspects of the organization are fundamentally shaped by those values. But while the process of establishing a green production company can be quite daunting, proponents argue cost savings associated with pollution prevention efforts, coupled with marketplace benefits in the realms of reputation and consumer loyalty, can make the shift a beneficial one not only for the environment, but also for the company itself.
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