A systematic approach for integrating environmental, engineering, and business factors into manufacturing decisions

Sam A. Robinson, Purdue University

Abstract

The objective of this research is to demonstrate an approach to integrating environmental considerations with engineering and business factors in a holistic manner when evaluating a manufacturing process over an extended period of time and under different scenarios. A mathematical language designed to enable modeling chemical processes was expanded to include environmental factors. Using this expanded language, a model was developed of environmental factors affecting a hypothetical agricultural chemical company and an actual consumer goods company. These factors include nitrogen oxides (NOx) and sulfur dioxide (SO2) emissions, equipment purchase decisions, and various business and regulatory scenarios. It also incorporates the basic operating cost structure and the potential market impact of alternative technologies. This model is a product in and of itself—a tool for handling very complex combinations of numerous variables for the purpose of environmental management decision-making. Furthermore, by including all of the aforementioned variables in the determination of recommended environmental potential activities, this model demonstrates an approach to integrating environmental management and business strategies. The model of the agricultural case demonstrates the ability of this modeling approach to aid decision-makers in responding smarter to regulations and determining the appropriate timing of different actions and the impact that regulations have on profits. The results of the model for the consumer goods case show that, when profit margin improvements and sales volume increases are considered along with direct cost of environmental technologies, the technology that was both more expensive and better for the environment was the better choice. Thus strategic integration of environmental outcomes, must include variables that include potential changes in product prices and mix, rather than just direct fixed and variable costs. This research establishes that integrating environmental considerations with other engineering and business factors may be beneficial to both the environment and a business's profit, it also demonstrates an approach for making these types of decisions through the development of a unique, enabling tool.

Degree

Ph.D.

Advisors

Lovejoy, Purdue University.

Subject Area

Environmental engineering|Management|Operations research|Sustainability

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