ISO 14000 Assessing Its Impact on Corporate Effectiveness and Efficiency Steven A. Melnyk Roger Calantone Rob Handfield R.L. (Lal) Tummala Gyula Vastag Timothy Hinds Robert Sroufe Frank Montabon Michigan State University Sime Curkovic Western Michigan University Contents Tables, Exhibits, Charts, and Appendices .................................................................... 4 Acknowledgments.......................................................................................................... 5 Executive Summary....................................................................................................... 6 Implications of the Study .............................................................................................. 7 Design of the Study........................................................................................................ 8 Overview .................................................................................................................... 8 The Large-Scale Survey.............................................................................................. 8 The Sample ............................................................................................................ 9 The Case Studies........................................................................................................ 9 The Sample for the Case Studies Phase ............................................................... 9 The Interview Protocol Described........................................................................ 9 Concluding Comments .............................................................................................10 Chapter 1 ISO 14000, Environmentally Responsible Operations and the Purchasing Profession: An Introduction .........................................................11 Introduction ...............................................................................................................11 Objectives of the Study..............................................................................................12 Approach of the Study...............................................................................................12 Organization of the Report........................................................................................13 Chapter 2 Understanding ISO 14000 ..........................................................................14 Overview ....................................................................................................................14 What Is an Environmental Management System?...................................................14 The Development of Environmental Standards...................................................15 The Forces for a More “Environmentally Conscious” System ...........................15 EMS and the Environmentally Conscious Enterprise .............................................16 ISO 14000 — Positioning This New Certification Standard ..................................16 Understanding the ISO 14000 Certification Standards ...........................................17 Why Should Purchasing Managers Be Interested in ISO 14000?...........................19 Alternatives to ISO 14000 .........................................................................................20 Concluding Comments .............................................................................................21 Chapter 3 Analyzing the Survey Data: Understanding the Implications of ECM and ISO 14000 ...........................................22 Demographic Information.........................................................................................22 Industrial Descriptive Information .......................................................................22 Background of the Respondents ...........................................................................24 Plant Activities ...........................................................................................................28 Environmental Management Systems - Findings ....................................................31 Environmental Systems — Management Options Considered ..........................34 Environmental Management and Corporate Performance — The Aggregate Impact............................................................................................34 Assessing the Impact of ISO 14000 Certification on the Firm ...............................37 Factors Influencing ISO 14000 Adoption ................................................................38 Obstacles to ISO 14000 Certification .......................................................................40 Comparing ISO 14000 and Voluntary EMS Programs ............................................41 Concluding Comments .............................................................................................44 Chapter 4 Understanding the ISO 14000 Decision in Detail: Case Studies..............45 Introduction ...............................................................................................................45 ISO 14000 Status: Not Being Considered.................................................................46 2 ISO 14000 Assessing Its Impact on Corporate Effectiveness and Efficiency 2 Firm A ....................................................................................................................46 Summary............................................................................................................46 Firm B.....................................................................................................................47 Summary............................................................................................................48 ISO 14000 Status: Assessing Suitability....................................................................48 Firm C ....................................................................................................................48 Lessons Learned ................................................................................................49 Firm D ....................................................................................................................49 Summary............................................................................................................50 ISO 14000 Status: Planning to Implement...............................................................50 Firm E.....................................................................................................................50 Summary............................................................................................................52 ISO 14000 Status: Currently Implementing.............................................................52 Firm F.....................................................................................................................52 Summary............................................................................................................54 Firm G....................................................................................................................54 Summary............................................................................................................56 ISO 14000 Status: Successfully Implemented ..........................................................56 Firm H....................................................................................................................56 Summary............................................................................................................57 Concluding Comments .............................................................................................58 Chapter 5 ISO 14000 and the Purchasing Professional: Uncovering the Major Lessons......................................................................................59 Introduction ...............................................................................................................59 Answering the Research Questions ..........................................................................59 What Is the Status of Environmental Management Systems in Most American Plants, and How Are They Perceived by Management? ....................59 What Factors Influence the Predisposition toward ISO 14000 and Progress toward Achieving ISO 14000 Certification?..................................60 To What Extent Do the Respondents See a Relationship between ISO 14000 Registration and Success and Improved Market or Corporate Performance? ...60 How Effective Is ISO 14000 Relative to the Other Alternatives Available for Improving Environmental Performance?.......................................................60 What Options Are Available for Firms Interested in Improving Environmental Performance, and to What Extent Are These Options in Practice? ...................60 Identifying the Lessons of ISO 14000 for the Purchasing Professional..................61 Achieving ISO 14000 Certification Does Enhance Corporate Performance......61 ISO 14000 Certification Is Viewed as an Internal Factory Affair .......................62 View the ISO 14000 Certification Decision as a Business Decision...................62 Encouraging Acceptance of ISO 14000 Certification Requires Reducing Uncertainty ............................................................................64 View ISO 14000 As a Supply Chain Issue ...........................................................64