Are all lean principles equally eco-friendly? A panel data study

Abstract

We address the individual environmental impact of three pillars of Lean Manufacturing, Just-in-Time, Jidoka and Respect for People (RfP), from a shop-floor perspective. Moving away from the cross-industry and cross-country approach which has dominated the economic literature on emissions and climate change, we test our hypotheses at plant level with 9-year panel data (5672 observations) from two official sources. In this way, we aim to highlight the role of manufacturing plants, which are one of the main causes of greenhouse gas (GHG) emissions. This new approach also makes it possible to evaluate the different lean principles separately and to propose specific initiatives that may be really useful, going beyond the usual “one-size-fits-all” recommendations that characterize previous research. Our results show that the final environmental impact depends not only on the leanness level achieved by each plant, but also on each lean pillar in question: while Jidoka and RfP positively affect environmental performance, we find a major trade-off between JIT initiatives and the green goals.