Environmental compliance in manufacturing: interpreting industry perceptions that we do but they don’t
| Published date | 01 December 1998 |
| Pages | 352-355 |
| DOI | https://doi.org/10.1108/02635579810243861 |
| Date | 01 December 1998 |
| Author | Michael M. McKinney,Phillip E. Miller |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
[ 352 ]
Industrial Management &
Data Systems
98/8 [1998] 352–355
© MCB University Press
[ISSN 0263-5577]
Environmental compliance in manufacturing:
interpreting industry perceptions that we do but they
don’t
Michael M. McKinney
East Tennessee State University, Johnson City, Tennessee, USA
Phillip E. Miller
East Tennessee State University, Johnson City, Tennessee, USA
The environmental laws have
placed manufacturing con-
cerns in a quandary regarding
compliance with the complex
and far-reaching web of
regulations which affect
practically every aspect of
production operations.
Although variations from the
mandates imposed may result
in rather substantial conse-
quences for offenders, many
companies do not achieve full
compliance for various rea-
sons. If full compliance is
possible, reasons for noncom-
pliance must be examined.
The relationship between
compliance and quality of the
manufacturing process or
finished product must be
explored to determine
whether companies might
sacrifice compliance for a
more efficient process or
higher quality product. More-
over, intentional noncompli-
ance for economic benefit
may provide companies with
an advantage over competi-
tors that spend vast
resources to satisfy environ-
mental obligations. This
paper addresses the results
of a survey completed by over
200 manufacturing firms
located primarily in
Tennessee to determine
effects of compliance with
environmental regulations on
manufacturing operations.
Introduction
In today’s competitive business environment,
would a company be willing to short-cut man-
dated regulations in order to gain a competi-
tive advantage over other companies in its
market? Would the answer be different if the
company believed that competitors were by-
passing regulations and it was losing market
share? These questions flag some interesting
and important issues regarding compliance
with regulatory mandates in today’s competi-
tive manufacturing environment.
The complex realm of environmental law
has placed many companies in a quandary
regarding compliance. The environmental
laws are voluminous, complex and difficult to
implement. They are far-reaching in scope as
they are directed at everything from the manu-
facture of new products, to the generation and
disposal of waste, to the reporting of routine
releases of hazardous substances as a result of
manufacturing operations. This often leaves
companies in a predicament when full compli-
ance may seem difficult to measure and impos-
sible to achieve, especially if diverting pre-
cious resources in that direction seems to offer
diminishing marginal benefits.
Manufacturing industry has perhaps been
hit the hardest in the area of environmental
regulation. In order to satisfy environmental
mandates, manufacturing firms have been
forced to take a long hard look at product and
process life cycles to integrate environmental
concerns. Many manufacturing companies
have effectively institutionalized environmen-
tal concerns and are reaping the benefits of a
successful fit with their production operations.
Pollution prevention for these companies has
steadily been creeping up the pipe thanks to
initiatives such as source reduction through
input manipulation, more efficient processes
producing fewer impurities and by-products,
and the incorporation of environmentally
friendly design into products and packaging.
In the face of success stories enjoyed by
many companies on some production fronts,
an overriding issue looms. Is full compliance
possible or is it an elusive shadowy goal
which evades capture regardless of increased
efforts to satisfy environmental mandates?
This paper will address the impact the
environmental regulations have on manufac-
turing industry in terms of production
processes and will explore the “perception”
within the industry that “our company” is
expending valuable resources on compliance
while “others” are not in compliance.
Literature review
There is no doubt that the environmental
regulations present significant challenges to
manufacturing companies. In manufacturing,
environmental regulations may impact on the
entire value chain, from inbound logistics
(i.e., receiving, storing, material handling,
warehousing and inventory control) through
the transformation process to outbound logis-
tics (collecting, storing and physical distribu-
tion of product). Tracking the various regula-
tions which may apply to a particular process
or facility can be a nightmare and implemen-
tation may be even worse. The important task
of staying abreast of the many and various
changes in the environmental regulations
represents a significant venture (McKinney
and Miller, 1996). The costs of full compliance
are very high and continue to dramatically
increase. In the United States, pollution abate-
ment and control expenditures for the air and
water media and solid waste management
have risen from almost $7 billion in 1972 to
over $121 billion in 1994 (Council on Environ-
mental Quality, 1995).
Although a scattered array of environmen-
tal regulations existed prior to the enactment
of the National Environmental Policy Act
(NEPA) on 1 January 1970, the federal govern-
ment declared its commitment to preserva-
tion of the environment in the NEPA statute
(National Environmental Policy Act, 1970).
Following the passage of NEPA, which
required the federal government to consider
the environmental impacts of major federal
projects, the government established the
Environmental Protection Agency and
unleashed a flurry of legislation designed to
protect the environment. The legislation
prompted the introduction of thousands of
pages of administrative regulations which
now comprise 18 volumes of the Code of Fed-
eral Regulations.
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