Contributions of lean production to the development of sustainable business practices in the food industry : the case of Arla Foods

Sammanfattning: Corporations in the food industry are under pressure from stakeholders to take responsibility for their social and environmental impact (Garnett, 2013). In the struggle, several initiatives have been implemented where the aim is to find a balance between financial, social as well as environmental aspects (Amani et al., 2015). Lean production is an initiative where the aim is to increase productivity and efficiency by the elimination of waste (Kovach & Cho, 2011). One of the cornerstones of lean production is to focus on a long term philosophy where value should be created for society as well as for the corporation (Liker, 2004). This means that if lean production is used as intended, it could lead to the creation of shared value. Shared value implicates that corporations take into account social, environmental and financial aspects when building strategies, and that focus should be on creating value in these three aspects (Porter & Kramer, 2011). Therefore, the aim in this study is to explain the role of lean production in developing sustainable business practices in the food industry. The study is based on a qualitative approach where Arla Foods, a global dairy cooperative, poses as case company. Managers at Arla Foods have been interviewed and their perceptions from working with lean production makes the foundation for the analysis. The material is analyzed using a theoretical framework that builds on lean production as described by Liker (2004) and shared value by Porter and Kramer (2011). The theoretical framework suggests that lean production could lead to the creation of shared value. This is also supported by the empirical evidence that shows that shared value is created because a long term philosophy is implemented where values in social, environmental and financial aspects are created. The empirical evidence also shows that the main incentive with lean production is to lower corporate costs and increase productivity and efficiency, why the values created for society seems to be spin-offs from the financial benefits. However, when striving to minimize corporate costs, benefits for society are created as well. More specifically, lean production leads to lowered use of energy and water as well as lowered levels of food waste and emission. Lean production also increases the well-being, motivation, health and work safety among employees. This study contributes to a growing number of research focusing on the relation between lean production and sustainable development in the food industry. It makes a theoretical contribution by showing that a corporation can generate benefits for society when applying lean production. Empirically it contributes by showing how managers in the food industry perceive the work on lean in relation to sustainable development. The results of the study could be used to create strategies for managing sustainability issues in the food industry.