Supply Chain Information: Manufacturing

Sector Name: Manufacturing

SIC code: 31-33


Major Players

  • BMW
  • Mercedes Benz
  • VW
  • Intel
  • Phillips Lighting
  • CEMEX (2011)
  • Nissan North America, Inc. (2011)
  • ConocoPhillips (2011)


Major Issues Affecting the Industry

A major concern for manufacturers is how to increase production and efficiency while reducing carbon emissions. One way in which businesses have addressed this issue is by implementing lean and green manufacturing protocols. Lean manufacturing systems stream line operations by reducing labor, use of raw materials, and production cost. Green manufacturing seeks is a manner of production that seeks eliminate greenhouse gas and the use of non-renewable and toxic materials. It also includes reducing the amount of post-production waste from the manufacturing chain.

In addition to implementing lean and green methods, businesses may purchase carbon offsets to counteract their carbon emissions. A second concern for manufacturers is how to minimize the immediate and long-term effects of their operations on ecosystems (i.e. land, air, water, people). Green manufacturing methods that reduce the use of toxic chemicals are one way to address this issue.


Major Benefits

Lean manufacturing, which is based on a production method developed by Toyota Motor Company in the 1950s, emphasizes changing and improving processes in order to maximize profits. It was the precursor for green manufacturing, which involves similar processes and adds practices that include toxic chemical and waste reduction, using renewable energy and materials, and environmental (i.e. people, land, air, & water) stewardship. One way green manufacturing is beneficial to small and large companies is that it introduces businesses to an ever-growing clientele that is interested in reducing the impact on the earth.

Though there is the conception that greening one’s business is costly, a number of federal and state mandates, grants, loans, and other subsidies are available to assist companies in transitioning to more sustainable production. The Department of Energy’s Office of Energy Efficiency and Renewable Energy, via its Better Buildings Neighborhood Program, is working with cities across the country to provide subsidies to business owners who desire to upgrade their buildings and reduce their carbon footprints. These upgrades result in long-term reduction in energy cost for proprietors and other benefits for the environment.


Key Requirements

Operational and disposal requirements for manufacturers are dependent upon the industry along with state and federal regulations. For instance, in 2003 California passed mandatory recycling criteria for manufacturers of electronics that contain cathode ray tubes and liquid crystal displays. However, this is not a nation-wide requirement.  Although, in 2008 the federal government passed the Consumer Product Safety Improvement Act (CPSIA), which placed more stringent regulations on all products manufactured for children.

Overall, there are a few procedural requirements that should be commonplace amongst all manufacturing entities. These include, but are not limited to:

  • Written standard operating procedures
  • Forms for recording keeping
  • Product identification numbers
  • Product labels

Each of these requirements are key to the safe and successful management of manufacturing companies.


Key Certifications


Getting Started

First, conduct research into sustainable industrial production for your particular sector. There is a wealth of independent, scholarly, and governmental resources available to introduce companies to and update them on sustainable manufacturing methods.


Going Further

Second, find a reputable certification organization to assist in transitioning your operations to lean and sustainable manufacturing practices. A certifier can help a business avoid the pitfalls of entering this new terrain as well as help locate markets for your sustainably produced and certified products.



Advanced Steps

Third, consider joining an sustainable manufacturing organization. These consortiums often host national events, help build camaraderie within the industry, and inform its members of policy developments and the latest innovations in the manufacturing sector.


Best Practices


For the seventh year in a row BMW has been named the Dow Jones Sustainability Index Leader.


Kingston Block & Masonry Supply LLC
As the 2012 winner of the Innovative Green Design Award, and a multi-level LEED certified business, Kingston Block & Masonry is the country’s leader in recycled concrete products.


Sustainable Lumber Company
The Montana-based, Sustainable Lumber Company crafts wood products from locally salvaged trees and Douglas Fir certified by the Sustainable Forest Initiative.


Mercedes Benz is the 2012 recipient of the Plus X Award, awarded to the most sustainable automobile companies for excellence in the categories of Innovation, Environment, High Quality, Design and Ease of Use.


Key Resources

Small Business Green House Gas Emission Calculator
This Environmental Protection Agency (EPA) resource provides tools to help businesses track their carbon footprint and develop company-wide greenhouse gas inventories.


Organization for Economic Co-operation and Development
The OECD has produced a free sustainable toolkit to assist international manufacturing companies seeking to stream line their operations.


National Council for Advanced Manufacturing
This membership-based, non-partisan, Washington-based think tank produces reports and host forums “to improve bottom line and sustainability” within the manufacturing sector.


The Story of Stuff
The Story of Stuff is an animated video that addresses today’s materials economy from the extraction of raw materials to the disposal of finished products.


Key Words:

  • Toyota Production System (TPS) – The impetus for lean manufacturing, the TPS was created by Toyota Motors to reduce waste and manufacturing cost following World War II.
  • Lean Manufacturing – A manner of production that seeks to maximize profits, usually through waste reduction, consolidating job tasks, and employee downsizing.
  • Green / Sustainable Manufacturing – A manner of lean production that seeks to maximize profits while minimizing a manufacturer’s impact on the environment.
  • Life Cycle Management (LCM) – A series of strategies used by businesses to manage a product as it goes through its life cycle (i.e. production, marketing, sells, disposal).
  • Good Manufacturing Practices (GMP) – A set of procedures which states the optimum ways to operate within manufacturing facilities.
  • Standard Operating Procedure (SOPs) – Standardized protocols that outline how employees are to perform within the workplace.
  • Environmental Management Systems (EMS) – Set of strategies that details ways to reduce a business’ impact on the environment, as well as, how business will react in the case of an environmental spill.
  • Quality Control – A number of procedures used to test a product’s durability and effectiveness. 
  • Material Consumption – Includes various aspect of production, including the extraction of raw materials and the purchase of completed products.
  • Greenhouse Gas Emission – Gases that absorb and trap infrared radiation in the atmosphere.
  • Carbon Offsets – A reduction in carbon emissions in one location (i.e. forest reserve) to counteract the production of emissions elsewhere (i.e. manufacturing plant). 
  • Renewable Energy – Energy that comes from natural resources, non-finite, resources (i.e. sunlight, wind, water, etc.)



  • Anderson, R., Egan, A., Chaloner-Larsson, G. “A WHO Guide to Good Manufacturing Practice (GMP) Requirements”. World Health Organization, Geneva. 1997. Retrieved June 11, 2012 from World Health Organization
  • BMW. “BMW Group Dow Jones Sustainability Index Leader for 7th Consecutive Year”. Retrieved from BMW
  • California State Board of Equalization. Caifornia Electronic Waste Recycling Act (2003). Retrieved June 11, 2012 from California Board of Equalization.
  • Daimler. “Mercedes-Benz Honored as the Most Sustainable as the World’s Most Sustainable Automobile Manufacturer”. Retrieved May 11, 2012 from Daimler website.
  • U.S. Congress. 110th Congress. Energy Independence and Security Act (2007). Retrieved June 12, 2012 from U.S. Government Printing Office.
  • Miller, G., Pawloski, J., Standridge, C. “A Case Study of Lean, Sustainable Manufacturing”. Journal of Industrial Engineering and Management. Vol. 3., Issue 1., May 2010. 11-32. Retrieved June 11, 2012 from Journal of Industrial Engineering and Management.
  • Motwani, J. “A Business Process Change Framework for Examining Lean Manufacturing: A Case Study”. Industrial Management + Data Systems. Vol. 103. Issue 5/6. 2003. 339-346. Retrieved June 11, 2012 from University of Ottawa website.
  • Nordin, N, et al. “A Framework for Managing Change in Lean Manufacturing Implementation”. 2nd International Conference on Industrial Engineering and Operations Management. 858-864. Retrieved June 11, 2012 from conference website
  • Public Law 110-314. Consumer Product Safety Improvement Act (2008). Retrieved June 11, 2012 from Consumer Product Safety report


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