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Modelling sustainable manufacturing practices effects on sustainable performance: the contingent role of ownership

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Abstract

This study empirically investigates the effects of sustainable manufacturing practices on sustainable performance, focusing on the moderation effect of companies’ ownership (foreign or local) between sustainable manufacturing practices and sustainable performance. In this study, a survey was conducted among ISO 4001-certified manufacturers in Malaysia, and structural equation modelling was used to examine the moderating effect of a company’s ownership on the relationship between sustainable manufacturing practices and sustainable performance. The findings showed that there was a positive relationship between both sustainable product design and sustainable manufacturing processes and sustainable performance for Malaysian manufacturers. However, the positive relationship between both sustainable product design and sustainable end-of-life practices on sustainable performance was stronger for foreign companies compared with that for local companies. The results showed the strengths of foreign-owned companies were at the implementation of their sustainable product design and sustainable end-of-life management practices of the product manufacturing process. The findings identified in this paper extend previous research and provide empirical evidence that a company’s ownership impacts the relationship between sustainable manufacturing practices and sustainable performance.

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Funding

This work was supported by the Ministry of Higher Education Malaysia through the Fundamental Research Grant Scheme (FRGS) (grant no.: FRGS/2/2010/TK/UM/03/6).

Author information

Authors and Affiliations

  1. Centre for Sustainable and Smart Manufacturing, Department of Mechanical Engineering, Faculty of Engineering, Universiti Malaya, 50603, Kuala Lumpur, Malaysia

    Salwa Hanim Abdul-Rashid & Raja Ariffin Raja Ghazilla

  2. Department of Management, Faculty of Business and Economics, Universiti Malaya, 50603, Kuala Lumpur, Malaysia

    Marini Nurbanum Mohamad

  3. Department of Mechanical, Materials and Manufacturing Engineering, University of Nottingham Malaysia, 43500, Semenyih, Malaysia

    Novita Sakundarini

  4. School of Management, Universiti Sains Malaysia, 11800, Penang, Minden, Malaysia

    Ramayah Thurasamy

  5. Daffodil International University, Savar, Bangladesh

    Ramayah Thurasamy

  6. Department of Management, Sunway University Business School, 47500, Selangor, Bandar Sunway, Malaysia

    Ramayah Thurasamy

  7. Faculty of Economics and Business, Universiti Malaysia Sarawak, 94300, Kota Semarahan, Malaysia

    Ramayah Thurasamy

  8. Fakulti Ekonomi Dan Pengurusan, Universiti Kebangsaan Malaysia, 43600, Selangor, Malaysia

    Ramayah Thurasamy

Authors
  1. Salwa Hanim Abdul-Rashid
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  2. Marini Nurbanum Mohamad
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  3. Novita Sakundarini
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  4. Raja Ariffin Raja Ghazilla
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  5. Ramayah Thurasamy
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Contributions

All authors contributed to the study conception and design. Material preparation, data collection, and analysis were performed by Salwa Hanim Abdul-Rashid, Novita Sakundarini, Raja Ariffin Raja Ghazilla, Ramayah Thrusamay, and Marini Nurbanum. The first draft of the manuscript was written by Salwa Hanim Abdul-Rashid, Marini Nurbanum, and Ramayah Thurasamy, and the rest of the authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

Corresponding author

Correspondence to Salwa Hanim Abdul-Rashid.

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Appendices

Appendix 1 Constructs and measurement items for SM practices

Constructs

Codes

Measurement items

Sources

Sustainable product design (SPDesign)

SPDesign_1

Elimination of hazardous materials

Ahmad, Wong [41], Zsidisin and Siferd [125]

SPDesign_2

Design for disassembly

Duflou, Sutherland [31], Ghazilla, Sakundarini [32]

SPDesign_3

Design for repair, rework, and refurbishment

Worrell, Allwood [33], Sabbaghi, Esmaeilian [35]

SPDesign_4

Design to reduce material use

Worrell, Allwood [33], Pajunen, Watkins [34]

SPDesign_5

Design to reduce energy consumption

Vezzoli [40], Kara and Li [126]

SPDesign_6

Use environmental-friendly materials

Sakundarini, Taha [39], Zhu, Sarkis [127]

SPDesign_7

Design to recover obsolete products (e.g. product leasing/PSS)

Manzini and Vezzoli [37], Hirschl, Konrad [38]

SPDesign_8

Design for maintenance

Desai and Mital [36], Baines, Lightfoot [128]

SPDesign_9

Design to prolong life of materials

Worrell, Allwood [33, 129]

Sustainable manufacturing process (SMProcess)

SMProcess_1

Material recovery

Thiede, Bogdanski [45], Gupta, Dangayach [46], Singh, Ramakrishna [47]

SMProcess_2

Waste recovery

Duflou, Sutherland [31], Singh, Ramakrishna [47]

SMProcess_3

Energy savings

Bhanot, Rao [5], Gupta, Laubscher [44], Despeisse, Mbaye [130]

SMProcess_4

Reduce CO2 emissions

Ball, Evans [131]

SMProcess_5

Improve manufacturing processes and machine efficiency

Millar and Russell [10], Bi and Wang [48], Raman, Haapala [49]

SMProcess_6

Adopt lean production systems

Singh, Ramakrishna [47], Miller, Pawloski [50]

SMProcess_7

Implement and adhere to environmentally conscious programmes, standards, or regulations

Ramanathan, He [51], Rachuri, Sriram [132]

SMProcess_8

Set environmental objectives and targets

Hamner [52]

SMProcess_9

Measure and audit material flows/wastes

Bocken, Strupeit [53], Westkämper, Alting [59]

Sustainable supply chain management (SSCM)

SSCM_1

Select green/sustainable suppliers

[56], Çankaya and Sezen [60]

SSCM_2

Influence suppliers to practise green/sustainable initiatives

Walton, Handfield [64], Masnita, Triyowati [133]

SSCM_3

Collaborate with suppliers

Ahmed and Najmi [14], Sachs [62], Vachon and Klassen [63]

SSCM_4

Training suppliers on sustainability

Hossan Chowdhury and Quaddus [2], Rao [65]

SSCM_5

Influence customers to accept green practices, services, or products

Canning and Hanmer‐Lloyd [66]

SSCM_6

Use less, cleaner, or reusable packaging

Zailani, Jeyaraman [56], Sonneveld, James [57], James, Lewis [58], Westkämper, Alting [59]

SSCM_7

Adopt energy-efficient transportation

Kam, Christopherson [61]

SSCM_8

Adopt energy-efficient logistics

Kam, Christopherson [61]

Sustainable end-of-life management (SEOL)

SEOL_1

Prolong the service life of materials/parts/products by providing maintenance and support services to customers

Famiyeh, Kwarteng [71], Seliger [134], Fiksel [135]

SEOL_2

Provide hazardous waste treatment in the plant for after-market recovery products/parts

Choi and Hwang [72], Frios [136]

SEOL_3

Provide and manage product warranty returns

Kleyner and Sandborn [73]

SEOL_4

Provide and manage product recalls

*

SEOL_5

Provide recycling support by using components and material coding standards

Hamner [52], Lee and Na [74]

Appendix 2 Constructs and measurement items for SP

Constructs

Codes

Measurement items

Sources

Environmental performance (SPEnv)

SPEnv1

Reduced CO2 emissions

Garetti and Taisch [137]

SPEnv2

Reduced wastewater discharge

Sachs [62], Evans, Gregory [138]

SPEnv3

Reduced solid waste generation

Sachs [62]

SPEnv4

Reduced energy consumption

Zhu, Sarkis [82], Yang, Hong [139]

SPEnv5

Reduced toxic/harmful/hazardous/flammable substances discharges

Veleva, Hart [30], Zhu, Sarkis [82]

SPEnv6

Decrease in material usage

Jeswiet and Kara [140]

SPEnv7

Improved compliance with environmental standards

Luken and Van Rompaey [141], Jayaraman, Singh [142]

Economic performance (SPEco)

Economic outcomes

 

SPEco1

Improved market share

Eltayeb, Zailani [77], Rao and Holt [143]

SPEco2

Improved company image

Rao and Holt [143, 144]

SPEco3

Improved company’s position in the marketplace

Rao and Holt [143], Smith [144]

SPEpo4

Increased profitability

Wagner [79]

Operational outcomes

 

SPEco5

Decreased material purchasing cost

Eltayeb, Zailani [77]

SPEco6

Decreased utility bills

Zhu, Sarkis [82], Porter and Van der Linde [145]

SPEco7

Decreased waste treatment fees

Kishawy, Hegab [28], Zhu, Sarkis [82]

SPEcop8

Decreased waste discharge fees

Kishawy, Hegab [28], Zhu, Sarkis [82]

SPEco9

Reduced environmental accident cases

Zhu, Sarkis [82], Geyer and Jackson [85]

SPEco10

Reduced manufacturing costs

Yi-Chan and Tsai [146], Carter, Kale [147]

SPEcoc11

Improved product quality

Zhu, Sarkis [82], Rao and Holt [143]

Social performance (SPso)

SPSo1

Improved relationship with the community and stakeholders

Maxwell, Sheate [84]

SPSo2

Improved work safety

Geyer and Jackson [85]

SPSo3

Improved work environment

Kishawy, Hegab [28], Maxwell, Sheate [84], Geyer and Jackson [85]

SPSo4

Improved living quality of the surrounding community

Maxwell, Sheate [84]

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Abdul-Rashid, S.H., Mohamad, M.N., Sakundarini, N. et al. Modelling sustainable manufacturing practices effects on sustainable performance: the contingent role of ownership. Int J Adv Manuf Technol 122, 3997–4012 (2022). https://doi.org/10.1007/s00170-022-10140-3

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