Application of Cluster Analysis for Identifying Potential Automotive Organizations Towards the Conduct of Green Manufacturing Sustainability Studies

Application of Cluster Analysis for Identifying Potential Automotive Organizations Towards the Conduct of Green Manufacturing Sustainability Studies

Jayakrishna Kandasamy (VIT University, India), Aravind Raj Sakthivel (VIT University, India), Vimal K. E. K. (National Institute of Technology Patna, India), V. Sharath Kumar Reddy (VIT University, India) and Babulal K. S. (Dire Dawa University, Ethiopia)
DOI: 10.4018/978-1-5225-5445-5.ch017

Abstract

Increasing legislative concerns and rapidly transforming technologies pressurizes the global competitive landscape to deploy smart, safe, and sustainable green manufacturing. This chapter scrutinizes organizational sustainability of the automobile components manufacturing organizations located in the state of Tamil Nadu, India using hierarchy cluster analysis towards setting up a benchmark on sustainability of organizations. Along with the triple bottom line (TBL) of sustainable development, the organizational responsibility and government legislation in achieving sustainability were selected as the five major governing variables during the conduct of this case study. As a result, 25 automotive components manufacturing organizations chosen from for this study were classified into three clusters, confirming a particular organization as the most suitable one for the conduct of green manufacturing sustainability studies. According to the distinctiveness of the assorted clusters, suggestions were also proposed for improving the organizational sustainability further.
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1. Introduction

The World Commission on Environment and Development declaration defines sustainable development as a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are made consistent with the future as well as present needs (World Commission on Environment and Development, 1987). Sustainable development was articulated by Brundtland commission as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs” (UN, 19987). Sustainable approaches are comprehensive and holistic in nature for creating environmentally benign, socially equitable and economically viable products and systems. In practical terms, triple bottom line accounting means expanding the traditional economic reporting framework to take into account ecological and social performance in addition to financial performance, as shown in Figure 1.

Figure 1.

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Business sustainability requires the inclusion of the objectives of sustainable development, social equity, economic efficiency and environmental performance, into organization’s operational practices. Organizations that compete globally are progressively more obligatory to consign and report on the overall sustainability performance of operational proposals. The term industrial sustainability as coined by the Institute for Manufacturing at the University of Cambridge and it defines industrial sustainability as conceptualization, design and manufacture of goods and services that meet the needs of the present generation while not diminishing economic, social and environmental opportunity in the long term (Jansson, et al., 2000). Zeng et al. (2008) defined industrial sustainability as the development that meets the needs of economic growth, social development, environmental protection and results in industrial advantage for short and long term future of their region located. These definitions continue to evolve, but still the benchmark to call an organization as sustainable is found not to be available, realizing the need to formulate a measuring scale; sustainability studies are to be conducted but selecting a suitable organization for the conduct of sustainability studies is not an easy task. For an automotive organization that is characterized by very long engineering cycles and multiple iterations to align technology, quality, and customer demand, incorporating sustainability into its business model and its products will be posing a significant challenge to respond to the growing pressure to capture their product’s environmental footprint. This case study formulates the basis towards identifying most suitable automotive organizations for carrying out sustainability studies using cluster analysis, a multivariate data analytic technique. For this study, ISO 14000:2004 certified organizations have been selected and responsibility and involvement of the organization towards sustainability studies have been ensured for the selected organization. The results concluded that the ‘Organization 16’ as most suitable automotive organization for the conduct of sustainability studies. After selecting the best organization from the cluster, steps will be taken towards the conduct of sustainability studies. The uniqueness of the study is the application of clustering mechanism for grouping organizations in automotive sector towards the conduct of sustainability studies. The novelty of this study is proved by its substantial state of practical implications it could bring through the conduct of sustainability studies, in the process of making the organization more sustainable. The structure of the chapter includes the literature review on sustainability, Corporate Social Responsibility (CSR) and cluster analysis followed by the methodology adopted in this study. The consecutive section includes the background details of the case study, identification of suitable sector for the conduct of case study, selection of functionality variables for sustainable development and data analysis. After analysis, the results are interpreted and the conclusions were drawn.

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2. Literature Review

The literature was reviewed from three perspectives namely sustainability, CSR and application of cluster analysis.

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