Use the supply relationship to develop lean and green suppliers

TLDR

Supplier environmental performance can be costly if not managed correctly. The study investigates the relationship between a supplier’s environmental management activity and the firm’s level and structure of the customer‑supplier manufacturing relationship. The authors construct a conceptual framework linking supply relationship, lean manufacturing, and environmental management practices, drawing on literature and proposing hypotheses for future research. The review finds that efforts to improve supplier environmental practices raise transaction‑cost and efficacy concerns for buyers, and proposes a lean‑supply model to address these issues, which may be useful.

Abstract

Purpose To investigate the relationship between a supplier and firm's level of environmental management activity and the structure of the customer‐supplier manufacturing relationship. Design/methodology/approach This paper presents a conceptual framework and looks at the literature in order to investigate this relationship. Three main concepts (supply relationship, lean manufacturing, and environmental management practices) and their relationship to one another are described and the discussion concludes with major hypotheses for further research in this area. Findings A major literature review reveals that efforts to improve or influence a supplier's environmental management practice raises critical issues of transaction costs and efficacy of approach for the buyer. The review allowed development of a model for approaching issues of supplier environmental performance through lean supply. Originality/value The environmental performance of suppliers to the supply function can prove to be a costly endeavour if not managed correctly. The framework presented in this paper may be of use in this respect.