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A Sustainability and Eco-Innovation Framework for Manufacturing Smes

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A Sustainability and Eco-Innovation Framework for Manufacturing Smes A Sustainability and Eco-Innovation Framework for Manufacturing SMEs In one volume Sinéad Mitchell Submitted for the Degree of Doctor of Philosophy Research carried out at: GMIT, Dublin Road Campus, Galway, Ireland Research Supervisors: Dr. Paul O’Dowd Dr. Thomas Roche Submitted to Galway-Mayo Institute of Technology, Ireland Department of Mechanical and Industrial Engineering November 2014 Declaration I hereby declare that the work presented in this thesis is my own, except where duly acknowledged and that it has not been used to obtain a degree in this institute or elsewhere. ___________________________________ Sinéad Mitchell i ABSTRACT- A Sustainability and Eco-Innovation (SEco) Framework for Manufacturing Small and Medium Enterprises (SMEs) Since the industrial revolution, manufacturing has been a major contributor to environmental damage, through pollution, the depletion of resources and the consumption of energy and the related burning of fossil fuels (IPCC, 2007). There is strong evidence that the situation will worsen, and there is a global call for urgent action to mitigate the accelerating damage (Füssel, et al., 2012; IPCC, 2014). Sustainable economic development needs to consider the impact of Small and Medium Enterprises (SMEs), which make up 99% of businesses in Europe (European Commission, 2008; Audretsch, et al., 2009). SMEs cumulatively cause 64% of total industrial pollution in Europe, and contribute approximately 60-70% of the total industrial waste (Constantinos, et al., 2010). While large companies are showing improvements in environmental performance, the same is not true of SMEs. Only 24% of SMEs in Europe are currently acting to reduce their environmental impact (Constantinos, et al., 2010). SME owner-mangers do not have the time or resources to learn and apply sustainability principles, and are often not aware that their business operations have a negative impact. There are supports available, but many are not adequately designed for the majority of SMEs. There is limited research in the area of SMEs and sustainability, and previous studies have not sufficiently considered the role of owner-managers. This research was carried out as part of a European FP7 project called FutureSME; involving a 26 partner consortium, 13 of which were manufacturing SMEs. This allowed access to SME owner-managers over four years. They contributed to the development, piloting and testing of SME-suitable tools and methodologies to improve sustainability maturity levels in manufacturing SMEs. In this study, ‘Sustainability Maturity’ is defined as ‘the capability of an SME owner-manager to manage the environmental sustainability of a business, including sustainability practices, knowledge of how the business impacts the environment, and awareness of how sustainability can be of business benefit’. A Sustainability and Eco-Innovation Framework (SEco Framework) to support manufacturing SMEs was developed. It integrated existing methods, together with new ones, and aligned with an overall goal to guide and support SME owner-managers to incrementally improve the sustainability of their businesses. The Framework is a four-step process of (1) diagnosis, (2) identification of sustainability or eco-innovation opportunity projects, (3) selection and implementation of projects identified and (4) a review with the SME owner-manager. The process is supported by a comprehensive toolkit that can be easily applied in any small business. The study showed that the SEco Framework improved the sustainability maturity in SMEs, when it was tested in two small, Irish manufacturing companies. The findings of the research identified that an initial SEco Pilot Framework, which was an online self- led methodology, did not engage SMEs, despite being designed for and approved by end-users. It led to the conclusion that the majority of SMEs need the assistance of an external advisor to help them get started, and guide them through a step-by-step process. One particular tool, the Sustainability Report, played a key role in the company’s acceptance of the SEco Framework. The two key research contributions include new insights into SMEs and a novel Sustainability and Eco-Innovation Framework for SMEs to enable change and advancement in sustainability maturity in manufacturing SMEs. ii Publications associated with this research Mitchell, S., Lalui, A., & Kearney, D. (2012). The FutureSME Framework for Transformation . InterTradeIreland, All-Island Innovation Programme, 2012 Annual Conference. Galway Mitchell, S., Dimache, A., & O'Dowd, P. Roche, T. (2011). The Issue of waste in European Manufacturing SMEs. 13th International Waste Management and Landfill Symposium. Cagliari. (Awarded the Luigi Mendi award for “Best Paper in the theme of waste policy and legislation”). Dimache, A., Mitchell, S., & O'Dowd, P. (2011). Business Sustainability Methodology for European Manufacturing SMEs. 1st International Conference on Sustainable Intelligent Manufacturing. Leiria, Portugal. Mitchell, S., (2011). European SMEs, eLearning and the Knowledge Economy, a Literature Review. Galway: Instiutes of Technology Institute (submitted as part of a post-gradute certificate in Research Practice). Mitchell, S., O'Dowd, P., & Dimache, A. (2010). Environmental challenges and opportunities for European manufacturing SMEs. International Manufacturing Conference 27. Galway: GMIT. Dimache, A., Mitchell, S., & O'Dowd, P. (2010). TRAPSS (Transition along the product-service system route) - a smart solution for manufacturing SMEs. International Manufacturing Conference 27. Galway: GMIT. Dimache, A., Mitchell, S., O’Dowd, P., & Harvey, N. (2009) ‘Future Industrial Models for SMEs’. Posterfest, Athlone Institute of Technology. iii Foreword This research was carried out as part of FutureSME project (www.futuresme.eu) funded by the European Commission under the Seventh Framework Programme (FP7). The primary aim of the project was to develop a set of tools and methodologies for manufacturing SMEs in Europe, which can enable them to adapt to the changing economic environment and lead them towards a sustainable business model. The research in this thesis evolved through interdependent experiences on the FutureSME project and beyond the work carried out on the futureSME project. The researcher would like to acknowledge the research work carried out the futureSME consortium during the pilot toolkit development. Dr. Aurora Dimache worked in collaboration on the design and development of the individual tools of SEco Pilot Framework on the FutureSME research project team; she contributed to the design and build of many of the excel tools and eLearning modules, in particular the LCA, LCC and DfE tools. The PSS module was heavily based on her colleagues PhD thesis, “A Decision Methodology to Support the Transition along the Product-Service System Continuum” (Dimache, 2009). iv Quotation Business is the force of change. Business is essential to solving the climate crisis, because this is what business is best at: innovating, changing, addressing risks, searching for opportunities. There is no more vital task.” Richard Branson, entrepreneur. (Reynolds, 2012) v Acknowledgements My biggest thank you goes to Fearghal, who was there for the good times and the bad times and supported me through it all. I could not have done this without you. You are amazing. Thanks to Mary and Svetlana for being such great friends, for all the lunches and always making me laugh even when you both had your own struggles. Thanks to Jackie for always listening, and giving me a new perspective and encouraging me to keep going. Thanks to Jean for all the support, inspiration, collegiality, talks and thoughts about designing a more sustainable world. Thanks to Simrn for sharing PhD moments together, and keeping me sane. Thanks to Cathy for always saying the right thing at the right time, and understanding me. Thanks to Nially and Jason for listening to me and housing me on many many occasions. Thanks to Ruaidhrí for the coffees, the crepes, the chats, and the beers. Thanks to Attracta for sharing your amazing depth of knowledge, and perspective, helping me understand that I “need to give birth to each sentence” and for bringing colour to the world. Thanks to Siobhán for your amazing philosophical mind, having a laugh and joining me in trying to solve the world’s problems while we were supposed to be working on our PhD. Thanks to Angela and all the Caffreys of Breaghmore who have also been so great. Thanks to Sheila for inviting me to share my research findings in the Kemmy Business School in UL, and chats and guidance on Corporate Social Responsibility. Thanks to all my proofreaders, in particular at the last stages from Gerry and Maebh. Thanks to all my family for putting up with my PhD ‘excuses’ for not being at gatherings on many occasions. Thanks to mam and dad for the nights in Loughrea and that the bacon and cabbage was always magically there for me. Thanks to Verona and Ciara for being the best sisters ever. Believe it or not it’s done and you will never have to hear about it again! I promise I will never take on anything like this again! Thanks to all on the FutureSME project. The team in Stratchclyde University, and Chalmers in particular at the early stages. A special thanks to Aylin, Catherine, Ian and Marcus for PhD advice, and all the SMEs that participated at various stages of the way. Thanks to all the SME owner- managers who participated in the development and testing throughout the project. Your frankness was much appreciated and this project could not have happened without it! Thanks to all my amazing new colleagues in Business in the Community for all your support and encouragement in the final year. Thanks to my colleagues in GMIT. Thanks to Aurora for sharing the room with no windows for so long, being a superwhizz on excel and an expert on LCAs and PSSs. Thanks to my supervisors Paul and Tom for expert guidance throughout the years. Your input kept me on my toes. A special dedication to my baby in my belly – you gave me the inspiration to keep going and most importantly to finish a few months before your arrival.
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