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J. Cleaner Prod., Vol. 2, No. 3-4, 201-205, 1994 pp. Copyright 0 1995 Elsevier Science Ltd

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Implementation of cleaner production in small and medium-sized enterprises

Tomas Giirdstriim and Petter Norrthon

Linkljping University, /FM-Environmental Science and Technology, S-581 83 Linktiping, Sweden

The aim of this article is to analyse whether it is possible for an external group to act as a catalyst when trying to make small and medium-sized enterprises (SMEs) adopt a cleaner production concept. At Linkiiping University, Sweden, nine SMEs cooperated in a cleaner production project that uses the University and the County Administration as catalysts. This article is based on a survey that evaluated the project. The survey shows that the SMEs did modify their products and processes after taking part in the project. They were especially successful in changing their products. Why products were changed to a larger extent than processes is not fully understood. Maybe this was done as a part of introducing a preventive environmental care system. Most SMEs did, as a part of introducing an environmental care system, introduce an environmental policy and an educational programme. The SMEs also experienced lower costs and better cooperation with the authorities. A reason for this is the good cooperation between the three participants of the project. In general, the SMEs did not think that they had gained marketing benefits. This attitude could have been different if more SMEs from the same value chain (supplier-producer-wholesalers-customer) had been involved.

Keywords: cleaner production; waste prevention; environmental methodology

Introduction

The philosophy of cleaner production implies that companies will both save the environment and receive economic benefits by pollution preventionl. Professor Huisingh, Rotterdam, who is one of the best known workers in this field, introduced the ideas to us in 1988. In the spring of 1993, the project ‘Cleaner production in small and medium-sized enterprises’ started. The hypothesis is that an external group can work as a catalyst that will initiate the cleaner production process. The goal is to evaluate whether the introduction of a cleaner production concept to the small and medium-sized enterprises (SMEs) is a successful way to implement a long-range, environmen- tal way of thinking. We assume that if the group is able to implement some ‘success factors’, it is probable that the SMEs will adopt a cleaner production attitude towards their products. The objective of this article is to evaluate the suggested method, with an external group working as a catalyst.

Cleaner production in enterprises

According to van Berkel and Kortman*, success in implementing cleaner production has both a technical

and educational dimension, and usually depends on the following ‘success factors’:

l achieving visible waste prevention benefits l organizing a capable and motivated project team l generating new insight l introducing a preventive environmental care system

Yakowitz and Hanmer3 stress the importance of an acceptance of cleaner production by SMEs, both for the environment and for the SMEs competitiveness. They add ‘The development and transfer of life-cycle costing analysis to SMEs is likely to be a crucial factor in motivating SMEs to select cleaner production technologies, since this method forces them to consider probable costs associated with environmental controls over the useful life of a technology, and thus minimises the chances of having to invest - in an unplanned way - in non-productive assets such as end-of-pipe devices.’ By life-cycle costing analysis, Yakowitz and Hanmer mean a total cost assessment, which includes a wide perspective of revenue and costs related to an investment. If the life-cycle costing analysis for introduction of clean technology proves to be more profitable than the old technology, we have defined it as a ‘good example’. There are several examples that prove the profitable sides of cleaner production,

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for example at 3M and ‘the Landskrona project’ in Sweden4.

Van Berkel and Kortman’ mention the introduction of a preventive environmental care system as being an important ‘success factor’ in the introduction of cleaner production. But still, most SMEs do not have any kind of preventive environmental care system or environmental management system. According to Arnfalk and Thidel15, only 3% of the manufacturing enterprises in Sweden had an environmental policy in 1992. Environmental policies are more common in the public sector in Sweden, but the degree of implementation is still low6.

The problem is how to initiate cleaner production projects in the SMEs. The SMEs are often, first of all, concerned that products are available for sale on a daily basis and that there is a sufficient cash flow3. They might not have the capacity (personnel, money or knowledge) to start cleaner production projects.

The project

The method of the project was to install an external group and let them meet with a number of SMEs (both private and public) and a number of large enterprises. The external group consisted of representa- tives from the County Administration Board of Osterg- &land and Linkdping University. The method of the project could be described in terms of three parti- cipants: the County Administration Board of ostergot- land, Linkoping University and a number of enterprises taking part in an interactive process to make the SMEs adopt cleaner production. All the enterprises had a certain interest in environmental issues, and it was totally optional to join the project. Participation for the enterprises was free of charge.

The external group also consisted of four post- graduates, who came from different disciplines. The external group did not have any practical experience of cleaner production, but worked with a theoretical framework based on Freeman7 and Jacksons. An aim was to find ‘good examples’ generated by the SMEs and the external group. The important part was not to introduce new cleaner production projects, but to generate new insights in the enterprises. The larger enterprises were far ahead in this field, and one idea was to transfer some of their knowledge to the external group and to the SMEs. During the project, it was of great importance to involve the enterprises as much as possible. This also made the external group place emphasis on projects that were initiated by the SMEs.

The project was introduced to enterprises in the region of Linkiiping in January 1993. The study included enterprises of different sizes, with different kinds of products/production, and enterprises that could be suppliers/customers to each other.

Altogether there were 11 enterprises taking part in the project. Of the 11 enterprises, nine were categorized as SMEs, and two as larger enterprises. The two larger enterprises had the role of transferring successful ideas

202 J. Cleaner Prod. Volume 2 Number 3-4

and concepts to the group of SMEs, i.e. a kind of benchmarking.

To educate the enterprises, they were offered attendance at cleaner production seminars which were part of a course in cleaner production at Linkoping University. The SMEs were also asked to suggest an assignment for the regular students taking part in the course. This would enhance the possibilities for SMEs to act in a more environmentally friendly way.

The last step in the project is to present a complete written report containing an evalulation and the ‘good examples’. This part is not ready yet, so the final result may differ somewhat from this paper.

Evaluation of the project

The evaluation of the project was done in August 1994, by sending a questionnaire to the participating SMEs. Out of nine SMEs, seven answered the questionnaire. To be able to check the significance of the results, the questionnaire was sent to seven other SMEs in a reference group that did not participate in the project.

The evaluation is based on the experiences from the external group and the questionnaire which was sent to the participating enterprises and the reference group. The aim was to analyse whether the enterprises had implemented a long-range, environmental way of thinking, and if they were using the cleaner production concept. The survey is based on the above-given ‘success factors’ and includes four main issues, namely, to find out:

(1)

(2)

(3)

(4)

if visible waste prevention benefits were achieved including documentation of ‘good examples’, and if processes and products wre actually changed to be more environmentally friendly; if the organizing of a capable and motivated project team was possible; if participating in the project generated new insights and incentives among the SMEs; if a preventive environmental care system was introduced as a result of participating in the project.

The questionnaire also asked the SMEs their opinion about the method used.

SMEs’ introduction of success factors Achieving visible waste prevention benefits

The first issue of the evaluation was whether the project achieved visible benefits of using the cleaner production concept, and whether it was able to find ‘good examples’. The conclusion is that the external group was able to put together a number of ‘good examples’ according to the plans. Mainly, the ‘good examples’ were based on changes in the processes.

The transfer of ideas to the SMEs proved to be more problematic. In some cases it was not possible to transfer concrete ideas, defined as ‘good examples’, to the SMEs.

Implementation of cleaner production: T. GBrdstrlim and P. Norrthon

One important issue of the evaluation is whether the SMEs actually did change their processes and products according to the cleaner production concept. The results show (see Figure I) that 3/7 (2/7) of the SMEs did modify their processes (3/7 means three out of seven SMEs and the results for the reference group are in brackets) and 5/7 (l/7) did modify their products after taking part in the project.

An interesting result is that the SMEs have modified products rather than processes.

Among the SMEs, 3/7 believed that taking part in the project had had a major influence in changing their processes and products according to the cleaner production concept, and 417 believed that taking part in the project had influenced their work in some aspects. None of the SMEs believed that the project was insignificant for their work in modifying their products and processes.

Organizing a capable and motivating project team

The second issue in the survey is to find out whether the organizing of a capable and motivating project team was successful or not. The first conclusion is that the project did not succeed in creating capable and motivating project teams inside the enterprises. This conclusion is based on the difficulties the external group had in receiving feedback from the SMEs.

Another observation is that the teamwork of the external group did not correspond to the organization of the SMEs. In general, all of the SMEs had only one representative in the project. This is confirmed by the fact that the majority of the SMEs (85%) experience increased insight and knowledge for only a few persons inside their enterprises.

The SMEs also showed little interest in participating in the cleaner production seminars given by the University; only 2/7 of the SMEs did partly participate.

Number of SMEs n SME in project q Reference WE

Processes Products

Figure 1 SMEs that have modified processes and/or products during the project time.

Generating new insight

An aim of the project was to give the SMEs new insights in the advantages of implementing cleaner production in their enterprises, i.e. reduced costs, marketing benefits and better cooperation with the authorities.

The results of the survey (see Figure 2) are that a majority of the SMEs did experience lower costs [4/7 (2/7)] and better cooperation with the authorities [4/7 (O/7)]. But in general, the SMEs did not think that they had gained marketing benefits. Only 217 (l/7) of the SMEs did experience a marketing benefit in adopting cleaner production.

Introducing a preventive environmental care system

The fourth issue is whether the SMEs had introduced a preventive environmental care system. More specifi- cally, that means the development and introduction of environmental audits, a corporate environmental policy and an educational programme in cleaner production concepts. Figure 3 shows the results of the survey.

The most common step in the work of introducing a preventive environmental care system was the introduction of an environmental policy and edu- cational programme. Of the SMEs, 5/7 (l/7) had introduced an environmental policy during the project time, and 417 (O/7) had introduced an educational programme. Environmental audits had been accomplished by 2/7 (117) of the SMEs.

About 45% of the SMEs thought that taking part in the project had been a major factor in introducing a preventive environmental care system, and 55%

Number of SMEs n SME in project ~ Reference SME

7

6

5

4

3

2

1

0 L ower Market Authorities COStS benefit

Figure 2 Benefits of cleaner production according to the SMEs.

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Number of SMEs n SME in project q Reference SME

Env. Education Env.Audit Policy

Figure 3 SMEs that have introduced a preventive environmental care system during the project time.

thought that it had influenced some aspects of their work.

An important result is also that a majority [5/7 (2/7)] of the SMEs participating in the project did improve their environmental control, without an explicit demand from environmental legislation or authorities.

Finally, the survey includes the SMEs’ opinions about the method used. The majority of the SMEs were positive to the organization of the project; 7/7 (3/7) of the SMEs emphasize the need for similar cleaner production projects. A majority of the SMEs, 5/7, are also willing to pay a small fee of 7000 SEK (c. $900) to take part in a project.

Discussion

The main issue is whether it is possible for an external group to function as a catalyst for the SMEs to adopt a cleaner production concept. To answer this, we will discuss some of the results.

Selection of SMEs in the project

The transfer of concrete ideas to the group of SMEs proved to be more problematic than planned. This is mostly because the possible solutions differ a lot between SMEs and large enterprises. The larger enterprises often have far more resources, which allows them to develop an organization for environmental control in quite a different way from the SMEs.

One example was the great possibility for a larger enterprise to influence its suppliers and, to some extent, its customers. This was generally not possible for the SMEs. An example was the large enterprise Saab-Military Aircraft, which succeeded in reducing

the need for trichlorethylene as a detergent. The enterprise found it possible to use plastic film instead of grease for protection of aluminium sheets. To make this possible, Saab-Military Aircraft had to convince its supplier in the UK to change its process of packaging. This was not easily done, because of the very high quality demands on metal sheets used in the aircraft industry. This solution and ‘good example’ could not be used in the SMEs, because the SMEs in general did not have the power to change the attitudes of their suppliers.

This indicates that it would be a good idea to select enterprises similar in size and organization to the SMEs, which have successfully introduced cleaner production. By selecting ‘good examples’ from similar SMEs, rather than big enterprises, the transfer of concrete ideas to the group of SMEs would be more successful.

Another way of generating new insights and incentives to the participating SMEs would be to select enterprises in a specific value chain (supplier-producer-wholesaler-customer). This would generate insights in the marketing benefits of the cleaner production concept.

The structure of the external group

The survey shows that a majority of the SMEs experienced better cooperation with authorities. The survey also asked about the SMEs’ opinion on the structure of the external group. All the SMEs were satisfied. This result shows that the structure with the University, SMEs and authorities working together is positive. The structure also emphasizes the authorities’ willingness to work and find solutions according to cleaner production practices. This is probably an important reason for some of the SMEs joining this kind of project.

Product or process changes

The conclusion that SMEs have changed their products rather than their processes (see Figure I) is of great interest, especially since authorities and legislators, to a greater extent, now focus on the role of products as sources of environmental problems in society. How- ever, this result seems to be a paradox, because the external group mostly generated ‘good examples’ by modifying processes.

One possible explanation of this paradox is related to the traditional aim and organization of environmental management in the enterprises. Traditionally, the SMEs have focused on modifying and improving processes rather than products. To involve the SMEs, it was important that they themselves select ‘environ- mental problems’ for the project. This approach, of course, has its limitations, because only the problems that the SMEs experience as problems will be selected. This resulted because the SMEs searched for and selected ‘environmental problems’ from a traditional point of view at the beginning of the project. After

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taking part in the project and adopting the cleaner production concept, the potential for changing products became obvious to the SMEs. That might be the reason why the project was successful, in terms of modifying products according to cleaner production concepts.

However, a change in products will also affect more interested parties in the value chain, for example customers and suppliers. That is the reason for the complexity in modifying products. In general, an SME probably finds it difficult to affect other companies in the value chain. Still, the project was successful in modifying products. This conclusion demonstrates the importance of involving customers and suppliers in cleaner production projects. To make this possible, it is also of great importance to involve other departments inside the SMEs, i.e. marketing, purchasing and design departments.

Motivating a project team in the SMEs

To achieve planned effects, the organization of a capable and motivated project team is important. The project did not succeed in creating capable and motivated project teams inside the enterprises. In general, the SMEs only had one specific representative in the project. That means that they did not have the opportunity for dialogue when evaluating new ideas. To create such teams inside the SMEs, the external group should probably have initiated the process. The survey also indicates that it is possible to charge the SMEs a participation fee. That could give the project a higher status inside the SMEs.

The SMEs showed little interest in participating in the cleaner production seminars given by the Univer- sity. The conclusion is that it must be better to arrange education sessions during visits to the SMEs.

To sum up, the project showed that it is possible for an external group to function as a catalyst for the SMEs, and to fulfil at least some of the success factors in adopting a cleaner production concept. The project was especially successful in the introduction of a continuous preventive environmental care system in the SMEs.

Future goals We have found that it is worthwhile to continue this kind of project, but more research should be done on the suggested method compared to other methods. A crucial factor in achieving visible benefits of cleaner production is marketing benefits. To make the market- ing benefits more visible, it would be very interesting to have an integrated group of SMEs, i.e. supplier-producer-customer, in a value chain. The next project might be based on a ‘cleaner production centre’, at which enterprises can meet and exchange experiences. That will hopefully increase the knowledge and be a start for research in the area of implementing cleaner production in small and medium-sized enterprises.

Acknowledgement We would like to thank all participating parties in the project who made this paper possible. Special thanks to Leif Thuresson and Florence Axelsson in the external group. We would also like to express our gratitude to RKFR who made this survey possible by financial support.

References Dorfman, M., White, A., Becker, M., and Jackson, T., ‘Clean Production Strategies Developing Preventive Environmental Management in the Industrial Economy,’ (Ed. T Jackson) Lewis Publishers, USA, 1993, pp 189-206 van Berkel, R. and Kortman, J., J Cleaner Prod. 1993, 1, 21 Yakowitz, H. and Hanmer, R. ‘Clean Production Strategies Developing Preventive Environmental Management in the Industrial Economy’, (Ed. T. Jackson) Lewis Publishers, USA, 1993, pp 306-308 Siljebratt, L., Pehrsson, E. and Backman, M. ‘Forebyggande miljoskyddsstrategi och miljiianpassad teknik i Landskrona’ (Low- and Non-waste technology in Landskrona), FoU nr 48, Reforsk, TEM, Sjobo, 1990 Arnfalk, P., and Thidell, A. ‘Miljiiarbete inom svensk tillverkningsindustri - Myt eller verklighet?’ (Environmental work in Swedish industry - myth or reality?), 2nd edn, Lunds University, Lund, 1992 Backman, M., Larsson, E., Malmquist, U., Nlslund, D. et al. ‘Upphandling och miljo - en helhetssyn En studie fokuserad pa offentlig sektor Fiirstudie’ (Purchase and environment in the public sector - a broad picture), 1993:05, Institutionen for Teknisk Logistik, Lund, 1993 Freeman, H., (Ed.) ‘Hazardous Waste Minimization’, McGraw-Hill, USA, 1990 Jackson, T. (Ed.) ‘Clean Production Strategies Developing Preventive Environmental Management in the Industrial Economy’, Lewis Publishers, USA, 1993

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