Sustainable Manufacturing Strategy; Identifying Gaps in Theory and Practice

Abstract: Since the introduction of sustainable development in 1972, an increasing number of companies have striven to create a competitive position by means of sustainability in their operations. Sustainability has become part of a firm's business strategy; therefore, strategic alignment of the manufacturing function to the business strategy's vision and goals regarding sustainability has become essential for manufacturing companies. Hence, the purpose of this thesis is to investigate the integration and operationalization of environmental and social sustainability into the manufacturing strategy to obtain a holistic view and to shape an agenda for future research. The research was conducted through four studies. One structured literature review and three exploratory empirical studies were used to collect the data. To investigate the integration of sustainability into the manufacturing strategy and how to close the gap in the operationalization of the sustainable manufacturing strategy, Vickery's (1991) proposed process model of manufacturing strategy based on the production competence theory has been used to analyze the findings. Based on the findings, some gaps in the literature and practice and the future research agenda were identified. The research results show that sustainability is not yet part of the formal manufacturing strategy, and neither social nor environmental sustainability is a top competitive priority for manufacturing firms. However, environmental sustainability supports achieving other competitive priorities, such as cost and quality. Moreover, sustainability is to some extent operationalized in manufacturing firms' day-to-day decisions and activities through improvement programs and initiatives, integrated management systems, and employee involvement. It is also shown that to ensure the operationalization of sustainability, it is necessary to align the sustainability measures with strategic goals and decisions. This study contributes to the literature on sustainable manufacturing strategy by bringing together the current developments concerning the topic in existing literature and practice and extending the perspective of sustainable manufacturing strategy and its operationalization. Moreover, the findings open up new questions and directions for future research in the field.