Development of Key Performance Measures for Sustainable Manufacturing in Global SMEs

2.1 Sustainable Manufacturing and SMEs

In recent decades, sustainable manufacturing concepts and practices have been adopted in larger companies. However, SMEs often lack the awareness, expertise, skills, finance, and human resources to incorporate the required changes for sustainability within the organization (Lee, 2009). In an empirical study, Hillary (2004) identified barriers and drivers for environmental management system for SMEs. Major barriers are lack of knowledge, training, implementation cost and transient cost. In addition, firm size and characteristics of SMEs are also recognized as barriers for sustainable practices. For SMEs, the drivers for sustainability are customers, government, local community, employees, insurers, banks and larger companies (Hillary, 2004). At present, SMEs are adopting sustainability initiatives to enhance their competitiveness due to the pressure from customers, consumers and regulatory bodies (Lee, 2009). For example, larger organizations are adopting sustainable manufacturing practices in their operations as a result of the pressure of directives such as European Union (EU) directives on Waste Electrical and Electronic Equipment (WEEE), Restriction of Hazardous Substances (RoHS), and Eco-design for Energy using products (EuP) (Lee, 2009). The ripple effect of these directives are extended to suppliers to enhance the sustainability performance of these larger manufacturing organizations (Moore & Manring, 2009).