Impact of Waste Management Practices of Indian Small and Medium-Sized Manufacturing Enterprises on Their Financial Performance

  • Debashree DeEmail author
  • Prasanta Kumar Dey
  • Sadhan Kumar Ghosh
  • Raja P. Pappu
Conference paper


Purpose—The study tends to investigate correlations of forward logistics (operational and environmental management comprises of “reduce”) and reverse logistics (waste management comprises of “reuse and recycle”) with the productivity and financial performance of the Indian small and medium-sized manufacturing enterprises (SMMEs). Design/methodology/approach—This research adopts the inductive approach. First, it develops a conceptual model using a structured literature review. Second, this leads to develop a few hypotheses. Third, a survey questionnaire is formulated based on the hypotheses. Fourth, the survey is undertaken in 65 SMMEs in India. Fifth, the responses are processed using structural equation modeling approach through AMOS software. Sixth, the hypotheses are proved and disproved, and finally, a model has been proposed for managing reverse logistics of Indian SMMEs. Findings/Results—The data analysis reveals that lean practices, effectiveness of business processes and environmental system are strongly connected to productivity and in turn financial performance. However, reverse logistics (waste management, i.e., reuse and recycle) is loosely correlated to productivity and negatively related to the financial performance of SMEs. Therefore, the study reveals that process optimization and energy reduction (“reduce”) enhance productivity and financial performance of the SMEs, but waste reduction (“reuse” and “recycle”) negatively impacts the financial performance. This is due to higher capital and operating cost for waste management initiatives, and negative perceptions of SMMEs’ managers on benefits of waste reduction through reuse and recycle. Therefore, in order to promote waste management in SMMEs in India the overall benefits of waste management should be made clear to concerned stakeholders. Research limitations/implications—The study has been undertaken within a specific zone (i.e., eastern part of India) using a sample of limited number of SMMEs. Practical implications—The findings of the study facilitate both the policy makers and individual SMME in the region. The policy makers and SMME owners take away the knowledge of correlations of waste management practices (reduce, reuse, and recycle) with financial performance, which motivates them to prioritize their actions of managing waste across the supply chain. Individual SME would be able to develop a sustainability performance management model following the outcomes of this study. Originality/value—Although the correlation of environmental practices and financial performance is thoroughly researched across the industries and geographical locations, whether waste management (reduce, reuse, and recycle) positively contributes to SMMEs’ financial performance is under researched. Additionally, the studies on means for practicing reduce, reuse, and recycle within SMMEs efficiently are scant. This study bridges these gaps.


Financial performance Structural equation modeling Forward and reverse logistics Small and medium-sized manufacturing enterprises (SMMEs) 


  1. Adebanjo, D., Teh, P.-L., & Ahmed, P. K. (2016). The impact of external pressure and sustainable management practices on manufacturing performance and environmental outcomes. International Journal of Operations & Production Management, 36(9), 995–1013.
  2. Albertini, E. (2013). Does environmental management improve financial performance? A meta-analytical review. Organization & Environment, 26, 431e457. Scholar
  3. Barney, J. B., & Griffin, R. W. (1992). The management of organizations: Strategy, structure, behavior. Boston: Houghton Mifflin College Div.Google Scholar
  4. Cetinkaya, B., Cuthbertson, R., Ewer, G., Klaas-Wissing, T., Piotrowicz, W., & Tyssen, C. (2011). Sustainable supply chain management: Practical ideas for moving towards best practice. Berlin: Springer Science & Business Media.Google Scholar
  5. Denis, E. G. (2011). The big business of small companies. Retrieved September 25, 2017, from
  6. EEA. (2002). Case studies on waste minimisation practices in Europe. Topic Report 2. 2002/2 report. Copenhagen: European Environment Agency.Google Scholar
  7. Eltayeb, T. K., Zailani, S., & Ramayah, T. (2011). Green supply chain initiatives among certified companies in Malaysia and environmental sustainability: Investigating the outcomes. Resources, conservation and recycling, 55(5), 495–506. Google Scholar
  8. Grenchus, E., Johnson, S., & McDonnell, D. (2001). Improving environmental performance through reverse logistics at IBM(R). In Proceedings of the 2001 IEEE international symposium on electronics and the environment (pp. 236–240), 7–9, 2001.Google Scholar
  9. Hillary, R. (2000). Small and medium-sized enterprises and the environment. Sheffield: Greenleaf Publishing.Google Scholar
  10. Huang, C., Liang, W., Tseng, T., & Chen, P. (2016). The rough set based approach to generic routing problems: Case of reverse logistics supplier selection. Journal of Intelligent Manufacturing, 27(4), 781–795. Scholar
  11. Keeley, J., Jarvis, P., & Judd, S. J. (2012). An economic assessment of coagulant recovery from water treatment residuals. Desalination, 287, 132–137. Google Scholar
  12. Kuik, S. S., Sev, V. N., & Amer, Y. (2011). Sustainable supply chain for collaborative manufacturing. Journal of Manufacturing Technology Management, 22(8), 984–1001. Scholar
  13. Kwaku Gyan, A. (2017). Moderating role of productivity on diversified conglomerates and performance: The case of Malaysia. Asia-Pacific Journal of Business Administration, 9(2), 118–133.Google Scholar
  14. Lambert, S., & Riopel, D. (2003). Logistique inverse: revue de littérature. Les Cahiers du GERAD G, 61, 45.Google Scholar
  15. Lin, Y., & Pekkarinen, S. (2011). QFD-based modular logistics service design. Journal of Business & Industrial Marketing, 26(5), 344–356.Google Scholar
  16. Menguc, B., & Ozanne, L. K. (2005). Challenges of the “green imperative”: A natural resource-based approach to the environmental orientation–business performance relationship. Journal of Business Research, 58(4), 430–438.CrossRefGoogle Scholar
  17. Merritt, J. Q. (1998). EM into SME won’t go? Attitudes, awareness and practices in the London Borough of Croydon. Business Strategy and the Environment, 7(2), 90–100.Google Scholar
  18. NetRegs. (2009). “SME-environment 2009: UK summary”, NetRegs, available at: (accessed 4 May 2012).
  19. Nishitani, K., Kaneko, S., Fujii, H., & Komatsu, S. (2012). Are firms’ voluntary environmental management activities beneficial for the environment and business? An empirical study focusing on Japanese manufacturing firms. Journal of Environmental Management, 105(30), 121e130.
  20. OECD. (1996). Building the basis for a common understanding on waste minimisation. In Outcome of the International Workshop, 16–18 October 1996, Berlin. Paris: OECD.Google Scholar
  21. OECD. (2011). Development in Eastern Europe and the South Caucasus: Armenia, Azerbaijan, Georgia, Republic of Moldova and Ukraine. Paris: OECD Publishing.
  22. Redmond, J., Walker, E., & Wang, C. (2008). Issues for small businesses with waste management. Journal of Environmental Management, 88(2), 275–285.CrossRefGoogle Scholar
  23. Sajan, M. P., & Shalij, P. R. (2017). The relationship between lean operations and sustainability among the different production systems in small and medium enterprises (SMES).Google Scholar
  24. Sarkis, J., & Dijkshoorn, J. (2007). Relationships between solid waste management performance and environmental practice adoption in Welsh small and medium sized enterprises (SMEs). International Journal of Production Research, 45(21), 4989–5015. Scholar
  25. Sarkis, J., Helms, M. M., & Hervani, A. A. (2010). Reverse logistics and social sustainability. Corporate Social Responsibility and Environmental Management, 17, 337–354.
  26. Shang, K. C., Lu, C. S., & Li, S. (2010). A taxonomy of green supply chain management capability among electronics-related manufacturing firms in Taiwan. Journal of Environmental Management, 91(5), 1218–1226.CrossRefGoogle Scholar
  27. Sharp, V., Giorgi, S., & Wilson, D. C. (2010). Delivery and impact of household waste prevention intervention campaigns (at the local level). Waste Management & Research, 28(3), 256e268. Scholar
  28. Tajbakhsh, A., & Hassini, E. (2015). A data envelopment analysis approach to evaluate sustainability in supply chain networks. Journal of Cleaner Production, 105, 74–85.CrossRefGoogle Scholar
  29. Testa, F., Styles, D., & Iraldo, F. (2012). Case study evidence that direct regulation remains the main driver of industrial pollution avoidance and may benefit operational efficiency. Journal of Cleaner Production, 21(1), 1e10. Scholar
  30. Thakkar, J. J. (2012). Scm based performance measurement system: a preliminary conceptualization. Decision, 39(3), 5.Google Scholar
  31. Theyel, G. (2000). Management practices for environmental innovation and performance. International journal of operations & production management, 20(2), 249–266.Google Scholar
  32. Zhang, Z., Van Hui, Y., & Chen, H. (2013). A forward and reverse logistics shipment planning model. The Journal of the Operational Research Society, 64(10), 1485–1502. Scholar
  33. Zhu, Q., & Sarkis, J. (2004). Relationships between operational practices and performance among early adopters of green supply chain management practices in Chinese manufacturing enterprises. Journal of operations management, 22(3), 265–289. Google Scholar
  34. Zou, W., Kumaraswamy, M., Chung, J., & Wong, J. (2014). Identifying the critical success factors for relationship management in PPP projects. International Journal of Project Management, 32(2), 265–274.Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2020

Authors and Affiliations

  • Debashree De
    • 1
    Email author
  • Prasanta Kumar Dey
    • 1
  • Sadhan Kumar Ghosh
    • 2
  • Raja P. Pappu
    • 1
  1. 1.Aston Business SchoolAston UniversityBirminghamUK
  2. 2.Mechanical EngineeringJadavpur UniversityKolkataIndia

Personalised recommendations