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IJPPM
55,7
594
Received December 2005
Accepted February 2006
International Journal of Productivity
and Performance Management
Vol. 55 No. 7, 2006
pp. 594-606
q Emerald Group Publishing Limited
1741-0401
DOI 10.1108/17410400610702179
PROFESSIONAL PRACTICE
Green productivity indexing
A practical step towards integrating
environmental protection into corporate
performance
N. Mohan Das Gandhi
Kumaraguru College of Technology, Coimbatore, India
V. Selladurai
Coimbatore Institute of Technology, Coimbatore, India, and
P. Santhi
Avinashilingam, Deemed University, Coimbatore, India
Abstract
Purpose – The purpose of the paper is to illustrate an approach for developing a framework of
indicators for integrating environmental protection into corporate performance. This paper also
highlights Green Productivity Index (GPI) of the Continuous Improvement (CI) performed in a foundry
casting, which includes both economic and environmental performances.
Design/methodology/approach – In the paper data were collected from a foundry and used for
developing indicators and Green Productivity Index (GPI). Mass balance concept was used for
quantification of environmental indicators.
Findings – The paper finds the approach adopted will provide a clear guidance for developing
indicator and GPI to various types of industries. A casting case indicates that the GPI can be used as
an actionable feedback for leadership to make effective decisions.
Research limitations/implications – This research in this paper developed a framework of
indicators for measuring direct environmental impact from the foundry, while indirect environmental
impact due to electricity consumed has yet to be performed. Limited external validity of the indicator
framework, as the analysis was performed in a single foundry.
Practical implications – The paper relies on a unique foundry data. Environmental indicators may
vary, since the melting furnace used for melting metal and type of molding process used for making
molds may vary from one foundry to another.
Originality/value – This paper is a holistic approach of combining theory and practical ideas to
cover the scope of sustainable development. From a research perspective, it establishes a framework of
indicators for the integration of environment into foundry and creates new research and application
opportunities to other pollution-intensive industries. From a practical perspective, the framework of
indicators developed to this point provides a guideline of immediate applicability.
Keywords Continuous improvement, India, Pollution
Paper type Research paper
Introduction
Worldwide, industries are undergoing the fundamental transition process involving
LPG formula (Liberalization, Privatization and Globalization). These changes
introduced more competition among companies, as well as the environmental
impact. There is a concern that globalization may not incorporate the environmental
impacts of resource consumption and waste generation decisions, thus a number of Green
tools and concepts have been introduced to improve and protect the environment.
Green productivity (GP) is one among them, which is a concept of encompassing
productivity
environmental protection and economic development. In this paper, practical indexing
implementation of GP in the foundry is discussed with a sand casting case.
Managers are under tremendously increased pressure from stockholders for
increasing the profit by improving the productivity, while from other stakeholders, 595
such as society and government for reducing environmental impact of their products
and process. GPI is a comprehensive index that addresses the needs and issues of both
claimants.

Environment and productivity

The economy is linked to the environment through extraction, production and
consumption of natural resources and generation of wastes. The excessive economic
growth creates not only resource scarcity but also pollutants that might exceed the
assimilative capacity of natural environments, thereby degrading essential
life-supporting systems (Gan, 2004). Current economic policies highlighted only
productivity and economic growth, without addressing environment, have resulted in
adverse and irreversible environmental impacts (Saxena et al., 2003). The short-term
profitability motivates the companies to look the environmental protection as an
obstacle to profit making (Rojšek, 2001). Companies consider the pollution is an
inevitable by-product of an economic system, since economic growth ethic dictates the
path of research and focuses on productivity (Roarty, 1997).
The needs for efficient use of resources and environment friendly corporate policies
and behaviors have now been recognized all over. The performance of an enterprise
can no longer be evaluated on the basis of economic parameter alone and it needs to be
integrated with environmental performance also (Saxena et al., 2003). If environmental
protection is promoted separately from economic development, this effort will fail, as
companies put their energies into activities that would bring about immediate benefits
to them (Guan, 2001). The paradigm of productivity is undergoing an evolution and the
scope of productivity has expanded over the years. There was also a concern that
economic growth ignores the environment. As a result, the Asian productivity
organization (APO) introduced the concept of Green Productivity (GP) in the mid 1990s
(Parasnis, 2003).

Green Productivity (GP) concept

GP is a strategy for enhancing productivity and environmental performance for overall
socio-economic development. Productivity provides the framework for continues
improvement (CI), while environmental protection provides the foundation for
sustainable development (Saxena et al., 2003). GP concept is shown in the Figure 1.
Productivity is the quantitative relationship between what is produced and the
resources used to produce it. The productivity can be improved by doing more with the
same resources through effective and efficient transformation of resources into desired
outputs (Al-Darrab, 2000).
To enhance productivity:
.
Output may be increased by advanced production technology.
.
Input may be decreased by the waste minimization.
IJPPM
55,7

596

Figure 1.
Green productivity
concept

The central element of the GP is the examination and re-evaluation of production

processes to highlight ways to improve productivity, while reducing their
environmental impact. Implementation of these options leads to another cycle of
review and so promotes continuous improvement (CI) (Parasnis, 2003). CI is a win-win
perspective for simultaneously realizing improvements in productivity and
environmental protection. Continuous incremental improvements (kaizen) in
products and processes create substantial opportunities for pollution prevention and
waste minimization (Florida, 1996).

Continuous improvement
In 1980s, the quality was a competitive opportunity and a strategic weapon that could
be used against the competitors. It is inadequate to meet today’s rapidly changing
business environment, which is characterized by uncertainty and unpredictability. CI
has been identified as a suitable weapon to meet this changing atmosphere (Kaye and
Anderson, 1999). Frequent changes in circumstance or condition are the impetus for
improvements. As changes occur faster and with more force than ever before, the
opportunities for improvement will not terminate but only intensify (Tersine, 2004). CI
teaches about problem before they become big one and about opportunities before
competitors did.

Performance assessment
Formalized monitoring and measurement are key enabler and important driver for CI
(Bessant and Francis, 1999). Performance assessment is a quantification of
performance and pro-active way of searching for CI. It can be used as a guide for:
.
Identification of processes for improvement.
.
Prioritizing processes for improvement.
.
Locating the dimensions of operations in the process, which are needed to
improve.
Performance assessment will have most positive impact on competitive dimensions of
an organization (Carpinetti et al., 2000). The progress of the improvement process can
be measured and demonstrated in terms of key operational performance indicators.
Designing and performing an assessment is a tailor made to specific situations, as Green
performance indicators vary from one industry to another, even within the industry. A
simple framework of indicators is developed to the foundry for integrating
productivity
environmental responsibility into the business efficiency. indexing

Green Productivity Index (GPI)

In many realms, decision-making has become increasingly data-driven, but the 597
environmental domain has curiously lagged in this regard, as it is a fundamentally
multi-dimensional concept such as natural resource depletion, pollution, and ecosystem
destruction. A quantitative and systematic approach of environmental protection is
needed to track problems as well as highlighting superior environmental programs,
technologies, strategies, and approaches. Green Productivity Index (GPI) helps to fill a
long-existing gap in environmental performance evaluation and also offers a small step
towards a more vigorous and quantitative approach to environmental decision making.
Green Productivity Index (GPI) is defined as the ratio of productivity of the system to its
environmental impact, as shown in the following equation (Hur et al., 2004):
GPI ¼ Productivity=Environmental Impact
Productivity is the ratio of selling price to production cost:
SP=PC
GPI ¼
EI
Where, “SP” is the selling price of a product, “PC” is the production cost of a product and
“EI” is environmental impact during manufacturing a product:
EI ¼ w1 SWG þ w2 GWG þ wC
Where, SWG is Solid wastes generation, GWG is Gaseous wastes generation and WC is
Water consumption and w1 ; w2 and w3 are corresponding weights.
Indexing is a systematic measurement framework to define what to measure and
how to measure. GPI is intended for estimating and comparing GP performance of a
product or process before and after CI. The GPI is a composite profile of two indicators
that derive from five underlying variables (SP, PC, SWG, GWG and WC). The
methodology of GPI development is shown in the Figure 2, it consists of three
interrelated steps:

Figure 2.
GPI development
methodology
IJPPM (1) Conceptualization.
55,7 (2) Value driver development.
(3) Relating value drivers by providing weights.
In the conceptualization phase, key dimensions believed to improve the GP were
identified. GPI is a measure of two different dimensions, such as environmental
598 protection and productivity enhancement. The GPI index combines value drivers to
form a single measure for representing company’s performance.
In composite indices, the specification of the weights for variables is an integral part of
index development and the choice of weights reflect the importance given to the variables
comprising the index. The weights for three environmental variables are derived from
2005 Environmental Sustainability Index (ESI) weights. ESI benchmarks the ability of
nations to protect the environment over the next several decades. Benchmarking is done
by providing scores and rankings for 146 Countries through ESI (Yale Center for
Environmental Law and Policy Report, 2005). ESI is based on five components, for the
analytic purposes, these five components encompass 21 indicators of environmental
sustainability and those 21 indicators are derived from 76 underlying variables. The equal
weighted sums aggregation method was used to derive ESI. Weights of six importance
indicators of ESI are listed in the Table I. The deriving of weights for three environmental
variables of GPI from ESI weights is shown in the Table II.
From Table II, weights for SWG, GWG and WC are found as w1 ¼ 0:17; w2 ¼ 0:5
and w3 ¼ 0:33 respectively. Environmental impact during production of a product:

EI ¼ 0:17SWG þ 0:5GWG þ 0:33WC

Name of the indicator Weights in the ESI

Air quality 0.05

Water quality 0.05
Water quantity 0.05
Table I. Reducing air pollution 0.05
The weights of indicators Reducing waste and consumption 0.05
in ESI Greenhouse gas emissions 0.05

Combined Weight
Weight weights (w) in the GPI
GPI indicators Equivalent ESI indicators in ESI (x) (x/0.3)

Gaseous wastes Air quality 0.05 0.15 0.5

generation Greenhouse gas emissions 0.05
Reducing air pollution 0.05
Solid wastes Reducing solid waste and consumption
Table II. generation 0.05 0.05 0.17
Deriving of Water consumption Water quantity 0.05 0.10 0.33
environmental variables Water quality 0.05
weights Total 0.3 1.0
In order to measure and improve GPI, it is necessary to develop appropriate and Green
measurable indicators, which analyze both environmental and economic factors. productivity
indexing
Environmental indicators
All business activities have some impact on the environment but the impacts of
manufacturing industries such as foundry often attract the most attention from the 599
general public. The foundry sector is included in the list of highly polluting industries
and kept in a red category norm by the Indian Government (Editorial, 2004). The
foundry unit generates solid waste from the following four main streams:
(1) Slag and discarded refractory lining from the melting furnace.
(2) Dust from shot blasting, grinding and chipping sections.
(3) Returned sand from core making and molding.
(4) Wet sludge’s from the scrubber.
During sand mixing, dust emissions also occur. These solid wastes are dumped in
low-lying areas as landfills (Umapathy, 2003). Generally, foundries generate 10 kg of
dust per ton of molten metal and cooling water usage is up to 20m3 per ton of molten
metal (Fatta and Marneri, 2004).
A leading medium scale cast iron foundry in the industrial city of Coimbatore was
selected for the study. Coimbatore, which is located in the South India consists of 600
foundries and providing jobs to about 0.15 million people. In the selected foundry, the
material consumption for a month has been observed. The consolidated material
consumption from all sections are tabulated and presented in the Table III. The waste
generated from the selected foundry is presented in the Table IV, where, the column
“A” shows solid wastes generated, while the column “B” shows gaseous waste
generated.
Total castings sold from the foundry to the customer during the month were 508.1
tonnes and corresponding total material consumption in the foundry were 1,365.58
tonnes.
5.1.1 Mass balance. The conservation theory states that neither mass can be created
nor destroyed (Nag, 1991). Mass balance, such as material consumed and wastes
generated for 508.1 tonnes of salable castings production are shown in the Figure 3.
Mass balance for 1 tonne of salable castings production is shown in the Figure 4.

Department Material consumption

Sand mixing 303.66

Machine molding 3.76
Hand molding 310.9
Core making 200.23
Melting 539.29 Table III.
Pouring 4.76 Material consumption in
Fettling 2.98 the foundry (units:
Total 1365.58 tonnes)
IJPPM In the selected foundry, total electricity and water consumption for the month were
55,7 8,30,420kWh and 13,30,000 l respectively. Total liquid metal produced during the
month was 860 tonnes. Environmental impacts for the production of 1 ton of liquid
metal are:
.
Water consumption is 1,546.5 l or 1.5465 tonnes.
.
Solid wastes generation is 0.904 tonnes.
600 .
Gaseous wastes generation is 0.087 tonnes.
Environmental impact for 1 ton of liquid metal production is less than 1 tonne of
saleable casting, since the liquid metal includes both saleable casting and gating
system of the saleable casting. Gating systems are recycled within the foundry.
Environmental impact during production of 1 tonne of liquid metal:

EI ¼ 0:17SWG þ 0:5GWG þ 0:33WC

EI ¼ 0:17 £ 0:904 þ 0:5 £ 0:087 þ 0:33 £ 1:5465 ¼ 0:7075tonne

Environmental impact during production of 1 kg of liquid metal is 0.7075 kg.

Department Solid waste generation Gaseous waste generation

Sand mixing 270.1 33.56

Machine molding 2.51 1.25
Hand molding 302.54 8.36
Core making 194.45 5.78
Table IV. Melting 7.03 24.26
Wastes generation for Pouring 3.5 1.26
one tonne saleable Fettling 2.98 –
castings (units: tonnes) Total 783.01 74.47

Figure 3.
Mass balance

Figure 4.
Mass balance for 1 tonne
casting
Economic indicators Green
The resource cost or input cost is also a performance measure of a production activity. productivity
The material cost incurred in each department of the foundry for three months is
presented in the Table V, and the total material cost is also shown. The total cost for indexing
production of 1kg casting is worked out to be Rs. 21.53 and shown in the Table VI.

601
CI implementation in a foundry casting
For an organization to achieve the ability to adapt changes quickly within its
environment, a sound strategy for implementation of continuous improvement is
essential (Kaye and Anderson, 1999). Waste Minimization Strategy guides and drives
continuous improvement efforts. The basic motivation for continuous improvement is
desire to eliminate waste (Tersine, 2004). In the environmental sense, the waste is
unnecessary consumption of resources and the generation of useless by-products from
mankind’s activities. In the business sense, waste includes rejects, residues, trimmings,
spillage, cleaning loss, contamination, damage, evaporation and other irrecoverable
losses. Waste Minimization is a systematic method of reducing or eliminating the

Material cost in Rs.

Department December 2004 November 2004 October 2004

Melting 1,29,79,013 1,03,37992 1,07,80561

Machine molding 5,42,962 4,80,944 4,93,797
Hand molding 4,34,984 4,59,369 5,80,010
Sand plant 7,35,584 7,12,507 7,55,200
Core room 4,35,288 3,55,067 4,41,902
Shank 47,417 46,505 42,247
Felting 2,83,121 2,23,823 2,42,109
Laboratory 9,657 8,919 20,659
Generator 9,204 33,642 17,718
Pattern shop 7,047 6,810 7,885
Electrical maintenance 12,081 13,557 11,352
Mechanical maintenance 84,396 58,413 84,307
General maintenance 4,818 4,562 8,385 Table V.
Transport 4,468 3,685 4,207 Estimation of total
Machine shop 5,297 1,516 14,095 material cost in a selected
Total material cost 1,56,00,989 1,27,47,474 1,35,06,016 foundry

Type of cost December 2004 November 2004 October 2004

Total material cost 1,56,00,989 1,27,47,474 1,35,06,016

Labor wages/month 30,84,214 23,85,571 28,66,591
Labor bonus/month 1,65802 1,65,802 1,65,802
Electricity bill Rs. 39,20,750 40,74,602 36,66,591
Water cost Rs. 22,800 20,560 21,360
Total cost Rs. 2,27,94,555 1,93,94,009 2,01,68,538 Table VI.
Total liquid metal melted 10,66,844 8,93,615 9,37,033 Estimation of total cost
Total cost Rs./kg metal melted(TC) 21.37 21.70 21.52 for production of 1 kg
Average for three months (TC) 21.53 casting
IJPPM waste at source. From an economic point of view, foundries wanted a casting that
55,7 requires no feeders (Warrick et al., 1999). Non-value added items like Feeder, runner
etc. are treated as waste in the foundry, since these are removed from the casting and
sent for recycling. In the illustrated casting case, the waste is minimized by optimizing
the size and location of feeder.
End Collar casting from the foundry was taken for CI. End Collar casting is shown
602 in the Figure 5. A feeder is provided to the End Collar for feeding a heavy mass of the
casting, which is indicated with an arrowhead in the Figure 5. Two individual feeders
are used to feed two End Collar castings as indicated “A1” and “A2” in the Figure 6.
The diameter and height of the individual feeder are 65 and 80 mm respectively. The
gross weight, including casting weight, runner and riser weight was 27.3 kg. The
following modifications were tried for feeder weight reduction:
.
One common feeder was provided instead of two individual feeders. Two End
Collar castings with one common feeder is marked as “A” in the Figure 7. The
common feeder diameter and length were 75 and 100 mm respectively.
.
The drag pattern was tilted at an angle of 450 to facilitate the placement of
common feeder. An arrowhead indicates the direction of the tilt in the Figure 6.
.
Runner extension was provided on only one side as “B” in the Figure 7 instead of
two sides as “B1”and “B2” in the Figure 6. The extension bar trap the slag during
flowing of molten metal into the mould.

Figure 5.
End collar casting

Figure 6.
End collar casting with
individual feeders
 .
A small step was provided in the runner to trap the slag from the molten metal Green
and it is marked as “C” in the Figure 7. productivity
Sample castings were produced after these four modifications were carried out and all indexing
sample castings were approved. The cross weight after modifications was 24.8 kg.
Shows Continuous Improvement report of gear cover is shown in the Table VII. It
shows gross weight change and net weight change.
603
GPI (Green Productivity Index) for the end collar casting
The production cost “PC” of two End Collar Castings is:

PC ¼ ðWG £ TCÞ 2 ½ðWG 2 2 £ WNÞXSC

where:

.
“WG ” is Gross weight of the two End Collar Castings with gating system.
.
“TC” Total Cost for 1 kg metal melted (Rs. 21.53).
.
“WN” is net weight of Casting.
.
“SC” is the Scrap or Pig iron cost (Rs. 15).
(WG – 2 £ WN ) is a gating system weight, which is re-melted.
Total Environmental Impact “EI” ¼ (Environmental Impact during production of
1 kg of liquid metal) X (Total metal melted required for manufacturing casting or gross
weight “WG”).

Figure 7.
End collar casting with
common

Constituents Before CI After CI Weight reduction

Table VII.
Gross weight (WG) 27.3 kg 24.8 kg 2.5 kg Continuous improvement
Casting weight (WN) 7.5 kg 7.5 kg – performance report
IJPPM Production cost “PC” of two End Collar castings before CI is:
55,7 PC ¼ ð27:3 £ 21:53Þ 2 ½ð27:3 2 2 £ 7:5Þ £ 15
¼ Rs:403:27
Selling price “SP” of two End Collar castings is Rs. 500.
Productivity of one End Collar casting before CI ¼ SP/2/PC/2 ¼ SP/PC ¼ 500/
403.27 ¼ 1.24.
604 Environmental Impact before CI is:

EI ¼ 0:7075 £ 27:3 ¼ 19:32kg

Environmental Impact of one End Collar casting is EI/2 ¼ 19.32/2 ¼ 9.66 kg.
Production cost “PC” of two End Collar castings after CI is:

PC ¼ ð24:8 £ 21:53Þ 2 ½ð24:8 2 2 £ 7:5Þ £ 15
¼ Rs:386:944

Productivity of one End Collar casting After CI ¼ SP/PC ¼ 500/386.944 ¼ 1.29
Environmental Impact after CI is:

EI ¼ 0:7075 £ 24:8 ¼ 17:546kg

Environmental Impact of one End Collar casting is EI/2 ¼ 17.546/2 ¼ 8.773 kg.
Green Productivity report is shown in the Table VIII, which shows the improvement
in the Economical Performance and Environmental Protection of the End Collar
Casting after Performing Continuous Improvement.
GPI of End Collar castings before CI:

SP=PC 500=403:27
GPI ¼ ¼ ¼ 0:128
EI 9:66
GPI of End Collar castings after CI:
SP=PC 500=386:944
GPI ¼ ¼ ¼ 0:147
EI 8:773
Green Productivity Index change is presented in the Table IX, as well as in the bar
chart as in the Figure 8.

Economical performance (rupees)

Productivity before CI
1.24
Table VIII.
Green productivity report Environmental impact before CI
for the end collar casting 9.66
Productivity after CI
1.29
Environmental performance (kg)
Environmental impact after CI
8.773

Table IX.
GPI (Green Productivity Before continuous improvement After continuous improvement
Index) for the end collar
casting 0.128 0.147
 Green
productivity
indexing

605

Figure 8.
GPI (Green Productivity
Index) for the end collar
casting

Application of the GPI

Continuous improvement in a process is a goal of all companies and the GPI can be
used to measure the relative performance during continuous improvement. In the End
Collar Casting GPI was increased from 0.128 to 0.147 during CI:
.
Companies can use the GPI as a comparative measure of performance. In the
foundry, GPI can measure and compare the performance of several castings.
Differences in the index can be used to identify castings, which have better
opportunities for further improvement.
.
The index can be used for benchmarking. Benchmarking is a powerful tool to
understand the performance relative to other, particularly “best-in-class”. GPIr is the
real value of the index and GPIo is the optimum value of an index. A ratio is created
GPI
such as GPI ro X100. A positive trend is the ratio is increasing towards 100 percent.

Conclusion
Present study developed a framework of indicators, focusing the point of
Environmental Protection and Economic Growth can be mutually inclusive rather
than conflicting objectives. To date, most research and managerial attention has
focused on individual metrics, to measure the performance of a corporate, while this
research integrates the environmental performance into the corporate performance.
This study shows that GPI is a powerful tool for putting environmental
decision-making on firmer analytical footing and an alternative to productivity for
gauging corporate progress. GPI also promotes systematic assessment, reporting and
planning for environmental protection.
CI is a mechanism of creating dynamic capability and embedding tacit knowledge
in the organization. The casting case shows that CI implementation processes is a
specific tailor made for a selected organization and cyclic nature of never ending
gradual improvement process. The case study also reveals that waste minimization is
an unaddressed and a promising opportunity to reap significant benefits.

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Corresponding author
V. Selladurai can be contacted at: profvsdcit@yahoo.com

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