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Manufacturing facility location and sustainability: A literature review and research agenda
Linköping University, Department of Management and Engineering, Production Economics. Linköping University, The Institute of Technology.
Industrial Management and Logistics, Lund University.
Linköping University, Department of Management and Engineering, Production Economics. Linköping University, The Institute of Technology.
2014 (English)In: International Journal of Production Economics, ISSN 0925-5273, Vol. 149, 154-163 p.Article in journal (Refereed) Published
Abstract [en]

The perspectives on the manufacturing footprint of global firms are widening from the economic aspects to also include the environmental and social aspects. Thus, sustainability is becoming an important issue for the location of manufacturing facilities. It is therefore timely to review the relevant aspects and dimensions in the extant literature to investigate the relationship between sustainability and facility location. In this paper, we aim to understand how sustainability aspects are included in decision-making concerning manufacturing facility locations and the role of location in evaluating manufacturing sustainability. We examine the literature streams on sustainability and facility location. A comprehensive search includes peer-reviewed literature from 1990 to 2011. We propose a literature classification scheme with respect to focal area and research methodology. The content analysis identifies the environmental, social and economic perspectives and factors affecting location decisions. We synthesize the findings into a framework for taking sustainability aspects into account in manufacturing facility location decision-making. We also propose a research agenda for further research on sustainable locations.

Place, publisher, year, edition, pages
Elsevier, 2014. Vol. 149, 154-163 p.
Keyword [en]
Corporate social responsibility (CSR); Environment; Facility location; Manufacturing; Sustainability
National Category
Other Natural Sciences Other Engineering and Technologies not elsewhere specified
URN: urn:nbn:se:liu:diva-102696DOI: 10.1016/j.ijpe.2013.05.013ISI: 000332439600015OAI: diva2:681001
Available from: 2013-12-19 Created: 2013-12-19 Last updated: 2015-09-04Bibliographically approved
In thesis
1. Sustainability and company performance: Evidence from the manufacturing industry
Open this publication in new window or tab >>Sustainability and company performance: Evidence from the manufacturing industry
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation approaches the question of sustainability and its influence on company performance, with special focus on the manufacturing industry. In the contemporary production environment, manufacturing operations must take into account not only profit, but also environmental and social performance, in order to ensure the long-term development of the company. Companies have to decide whether they should allocate resources to environmental and social practices in order to improve their competitive advantage. Consequently, in decision-making processes concerning operations, it is important for companies to understand how to coordinate profit, people, and planet.

The objective of this dissertation was to investigate the current situation regarding manufacturers’ sustainable initiatives, and to explore the relationship between these sustainable practices and companies’ performance, including financial performance, operational performance, innovation performance, environmental performance, and social performance. First of all, a structured literature review was conducted to identify sustainable factors considered to be important in the decision making of manufacturing operations. The findings were synthesized into a conceptual model, which was then adopted as the basis for designing the survey instrument used in this dissertation. Drawing on Global Reporting Initiative (GRI) reports, empirical research was performed to explore the relationship between environmental management practices and company performance. Interestingly, the findings showed that many environmental management practices had a strong positive impact on innovation performance. Sustainability disclosures and financial performance were further analyzed using extended data from the GRI reports. The results also showed that several sustainability performance indicators, such as product responsibility, human rights, and society, displayed a significant and positive correlation with return on equity in the sample companies.

In order to further explore the research area and to verify these findings, a triangulation approach was adopted and new data were collected via a survey conducted among middle and large sample companies in the Swedish manufacturing industry. The results indicated that the sustainable improvement practices had a positive impact on company performance. Some environmental and social improvement practices had a direct and positive correlation with product and process innovation. Furthermore, findings suggested that better cooperation with suppliers on environmental work could help to strengthen the organizational green capabilities of the focal companies.

When considering the company’s general approach to implementing sustainable practices, some interesting findings emerged. There were limited significant differences in sustainable practices when comparing different manufacturing sectors, and different countries and regions. However, the results showed that Swedish manufacturing companies often place higher priority on implementing economic and environmental sustainability practices than on social ones.

This dissertation contributes to the literature on manufacturing sustainability. The study expands the understanding of how environmental, social, or economic perspectives as a triple bottom line can influence company performance and to a certain extent the supply chain. Identifying and understanding such relationships gives companies the opportunity to integrate sustainability into their manufacturing operations strategy in order to sustain their manufacturing operations over the long term.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2015. 67 p.
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1698
Empirical research, sustainable practices, company performance
National Category
Economics and Business Social Sciences Interdisciplinary
urn:nbn:se:liu:diva-121052 (URN)10.3384/diss.diva-121052 (DOI)978-91-7685-967-4 (print) (ISBN)
Public defence
2015-09-22, ACAS, Hus A, Campus Valla, Linköping, 10:15 (English)
Available from: 2015-09-03 Created: 2015-09-03 Last updated: 2015-09-03Bibliographically approved

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