LEAN PRODUCTION SYSTEMS AND ENVIRONMENTAL SUSTAINABILITY AT

UGANDA BREWERIES LIMITED, PORTBELL

BY

DAMALY KISAKA

22/MSCM/KLA/WKD/0011

A PROPOSAL SUBMITTED TO THE SCHOOL OF MANAGEMENT SCIENCE IN

PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE

MASTER’S DEGREE IN BUSINESS ADMINISTRATION OF

UGANDA MANAGEMENT INSTITUTE

FEBRUARY, 2024
 TABLE OF CONTENTS

TABLE OF CONTENTS..........................................................................................................i

LIST OF ACROYMNS AND ABBREVIATIONS...............................................................ii

CHAPTER ONE.......................................................................................................................1

INTRODUCTION....................................................................................................................1

1.1 Introduction..........................................................................................................................1

1.2 Background to the study.......................................................................................................1

1.2.1 Historical Background......................................................................................................2

1.2.2 Theoretical Background....................................................................................................4

1.2.3 Conceptual Background....................................................................................................5

1.2.4 Contextual Background.....................................................................................................6

1.3 Statement of the Problem.....................................................................................................7

1.4 Objectives of the Study........................................................................................................8

1.4.1 General Objectives............................................................................................................8

1.4.2 Specific Objectives............................................................................................................8

1.5 Research Questions.........................................................................................................8

1.6 Research Hypotheses...........................................................................................................9

1.7 Conceptual Framework........................................................................................................9

1.8 Justification of the Study....................................................................................................10

1.9 Significance of the study....................................................................................................11

1.10 Operational definitions of key concepts...........................................................................11

REFERENCES.........................................................................................................................13

i
 LIST OF ACROYMNS AND ABBREVIATIONS

JIT: Just in Time

LTD: Limited

NEMA: National Environmental Authority

UBL: Uganda Breweries Limited

ii
 CHAPTER ONE

INTRODUCTION

1.1 Introduction

With an increasing social demand of environmental sustainability, firms embrace the strategic

importance of environmental management practices for competitive advantage (Yang et al.,

2010). Despite the ongoing debate about the relationship between environmental management

and financial performance, previous research is often controversial. The commercial press also

reflects this discussion among practitioners regarding the compatibility of environmental

objectives with economic viability (Afum, et al., 2021). In light of these differing views, while

organizations recognize that environmental sustainability affects their competitive position, firms

are unclear on the details of how environmental management practices are implemented.

Government entities, policy makers and academia as well as community members have exerted

pressure to manufacturing firms to consider environmentally friendly processes and procedures a

top agenda (Bakry, et al., 2023). One of the practices which has become a top notch for

manufacturing firms has been the adoption of lean production systems.

This study will examine the effect of lean production systems and environmental sustainability at

Uganda Breweries Limited (UBL). The variables are lean production systems (IV) and

environmental sustainability (DV). This chapter presents the background of the study, the

statement of the problem, the general and specific objectives, the research questions, the theories

of the study, the scope of the study, the justification of the study, the conceptual framework and

the operational definition of the key terms.

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1.2 Background to the study

1.2.1 Historical Background

Environmental sustainability programs were initiated in the 19 th and early 20th Century of the

German industrialization period to reduce emissions (Jones & Lubinski, 2013). In Switzerland, a

similar strategy was adopted, forcing businesses to plant forests and minimize greenhouse gas

emissions and treat industrial waste before dumping as a mechanism for reducing chemical

wastes in water and air (Marie, et al., 2022).

In the United States, industrial pollution worsened in the cities of Chicago and St. Louis during

the nineteenth century, causing theorists, scientists, and ecologists to petition the government for

the formulation of environmental policies (Jones & Lubinski, 2013).

Initiatives to ensure environmental protection in Asia can be traced back to the 1920s in China,

following environmental destruction by corporations that decreased forest cover from 70% to

5%. As a result, numerous environmental laws, declarations, and policies were created, which

both new and existing companies were expected to obey. In this regard, companies adopted

specific waste minimization strategies to increase compliance with the newly founded laws

(Antony et al., 2022).

In Africa, environmental sustainability has been a traditional practice going back to the pre-

independence period. Africa's commitment to environmental protection became a popular

practice during the colonial and post-colonial periods, where new policies and amendments were

made to ensure that the increasing manufacturing sector did not erode the environmental

structure (Kakuru & Ssekyana, 2009).

Environmental sustainability in East Africa can be traced back to the 1972 United Nations

Conference, which Kenya actively participated in. The creation of the United Nations

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Environmental Program within the country was an expansion of the idea. Since then, Kenya has

consistently founded policies and initiatives aimed at ensuring that manufacturers do not affect

environmental system in their production (Nasong’o, 2017).

Similarly, Uganda has expressed a willingness to protect the environment over time.

International conferences such as the United Nations Conferences of 1972 and 1992 are regarded

as major drivers of environmental laws in Uganda planned to deal with industrialization and

population growth (Kakuru & Ssekyana, 2009). Uganda Breweries Limited, for example, is

expected to comply with relevant environmental laws outlined in the National Environment Act

(NEMA) (1995) and National Environmental Bill (2017) as amended to ensure that businesses

comply with environmental standards.

Given the above arguments and the challenge of climate change, pollution and resource scarcity

induced by their activities (Cheng et al. 2022), manufacturing companies are looking for

innovative and competitive paradigms to streamline their operational processes, gain

productivity, reduce the damage to the environment and become sustainable. Industrial activities

are considered a major source of global environmental pollution and resource waste, which

should actively and significantly contribute to promoting sustainability (Sharma et al. 2023). To

this end, manufacturers are required to integrate environmental practices as part of their business

strategies in order to mitigate resource depletion and environmental damage and gain a

competitive advantage simultaneously (Cherrafi et al. 2021). Yet manufacturing companies

remain faced with the cost of doing business sustainably. While adopting sustainable practices

may entail short-term costs, the long-term benefits can offset these costs in terms of savings,

reputation and market competitiveness.

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1.2.2 Theoretical Background

This study will be guided by the Legitimacy Theory which was propounded by Dowling&

Pfeffer in 1975. Dowling & Pfeffer (1975) indicate that companies operate in a social contract,

which is either expressed or implied where they are supposed to act in congruence with the social

norms and values if they are to remain sustainable. Companies derive capital from the society in

which they work to manufacture goods and services, according to Legitimacy Theory. Despite

the fact that they have no intrinsic rights to these resources, they must aim to provide advantages

that outweigh the society's perceived costs in order to justify their continued life (Lanis &

Richardson, 2012). They must engage in activities which are socially and environmentally viable

to alleviate public concern and attain society’s approval.

This theory will be used as a basis for this study as through lean production systems companies

are able to ensure environmental sustainability thereby acting in congruence to the social norms

and values as stipulated by the theory. According to Mohamed et al., (2014) and Mousa &

Hassan, 2015), the Legitimacy Theory is appropriate for explaining the need for environmental

sustainability, and actions undertaken by companies in ensuring that they remain

environmentally responsible when producing goods and services .

This is linked to the current study as such actions that enable the company to remain

environmentally sustainable include lean production systems such as process streamlining,

supplier management as well as continuous production which all lead to environmental

sustainability such as effective resource use, reduction in water emission and carbon print . This

is attributed to that fact that companies are under immense pressure from society to consistently

ensure environmental friendliness of their actions. Additionally, governments have also erected

4
environmental laws and regulations which are an expression of concern towards environment

(Mousa & Hassan, 2015).

1.2.3 Conceptual Background

The various concepts used in the study have been defined by various scholars as discussed

below.

Lean production systems are defined by Leksic and Stefanic (2020) as a series of strategies

implemented by the organization with the intention of minimizing waste through socio-technical

philosophies. Furthermore, according to Alves, Dinis Carvalho and Sousa (2012), lean

production systems are primarily based on generating value for consumers, ensuring pull

production, achieving excellence, establishing flow, and mapping the value chain. This research

focused on the aspects of process streamlining, supplier management, and continuous

improvement, which have been highlighted because they are related to environmental

sustainability (Sordan, et al., 2020).

Process streamlining refers to initiatives taken by organizations to boost efficiency or overall

operations by simplifying or removing unnecessary steps or using advanced technology

(Lizarelli et al., 2023). Process streamlining helps businesses to enhance their production

processes, which are the main source of waste in the manufacturing sector. In this study, process

streamlining was looked at in terms of use of pull systems, Just in Time (JIT), Automation and

overall equipment effectiveness.

Supplier management refers to the steps companies take to improve their relationships with

supply chain partners and is important to ensure the efficiency and quality of their manufacturing

processes (Ajibike et al., 2021). For the purposes of this study, supplier management was

considered in terms of supplier participation and supplier relationship management.

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Continuous Improvement refers to processes that improve the flow of knowledge and goods

to control production costs and quality (Girón et al., 2021). Continuous progress in this research

will be discussed in terms of consumer attention, review planning, recycling reuse and

waste management

Maama, Doorasamy and Rajaram (2021) describe environmental sustainability as a company's

policies and activities aimed at ensuring that resource and service requirements are met without

jeopardizing the health of the ecosystems from which these services are extracted. In the same

vein, García & Reza (2021) argue that environmental protection is a strategy for eliminating

waste and avoiding natural resource depletion. Environmental sustainability was considered in

terms of resource utilization, landfill reduction, water pollution reduction, and carbon footprint

reduction for the purposes of this report.

1.2.4 Contextual Background

Uganda Breweries Limited (UBL) is one of the leading producers of premium alcoholic

beverages, located at Luzira, one of the suburbs in Kampala Uganda. Like any manufacturing

company, Uganda Breweries generates different forms of waste amounting to over 24,000 tons

annually (Uganda Breweries Ltd Annual Report, 2023). According to the UBL Environmental

Report (2018), most of the waste generated is carbon dioxide waste which is generated during in

its process constituting about 60% of the total waste, 39% of such waste is liquid waste while

other forms of waste constitute 1%. As a mechanism for expressing concern for the

environment, Uganda Breweries Limited increased engagement in corporate social

responsibility, specifically environmental sustainability, which has manifested in both internal

and external indicators. From within, Uganda Breweries Limited constructed an Effluent

Treatment Plant that filters and purifies waste before it is connected to the national channel.

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Moreover, in 2022, the company spent over USD 4million to expand the treatment plant to

match the increased production (Uganda Breweries Ltd Annual Report, 2022). Additionally, in

2015, Uganda Breweries Ltd acquired new machinery intended to increase its production

capacity and reduce waste such as broken bottles (UBL Annual Report, 2021). The company also

increased its efforts in supplier management by sensitizing farmers on best farming techniques in

Northern Uganda to guarantee continued supply of high quality raw materials.

1.3 Statement of the Problem

Companies are increasingly becoming cautious about the environment to ensure that their

operation does not negatively affect the future ecosystem (Taucean et al., 2021). For example, in

2005, Uganda Breweries Ltd installed an effluent treatment plant that potentially filters and

purifies wastewater before it is discharged. In 2015, a total of USD 4 million was invested by the

company to expand the wastewater treatment plant to ensure ecosystem protection and

sustainability.

The process streamlining in the company has also improved such as adoption of JIT, use of

advanced technology among others (UBL Annual Report, 2023). In addition, the company has

consistently invested in supplier management practices by carrying out supplier sensitizations so

as to improve on the quality of products offered, supplier relationships through trainings on best

farming practices to enhance on the quality required by the organization so as to reduce waste

residuals into water bodies and continual improvement (Uganda Breweries Ltd Annual Report,

2023).

Notwithstanding the above, environmental sustainability remains low in Uganda Breweries Ltd.

The number of wastes increased from 231,783 tons in 2016 to 251,000 tons in 2017 (Uganda

Breweries Ltd Operations Report, 2023). Community members around the company premises

7
have also expressed concern over increasing toxic material generation from UBL. This has

resulted in a huge lawsuit from surrounding communities, causing the company to lose a lot of

money in legal courts. Additionally, the image of the company has also been tarnished thereby

reducing in the sales that could have been realized coupled by high government surveillance at

the company premises to ensure compliance with the rules on environmental sustainability

(Uganda Breweries Limited Annual Report 2023). It is against this background that the current

study will investigate how lean processing affects UBL's environmental sustainability.

1.4 Objectives of the Study

1.4.1 General Objectives

The study will examine the effect of lean production systems on environmental sustainability at

Uganda Breweries Limited (UBL)

1.4.2 Specific Objectives

i. To examine the effect of process streamlining on environmental sustainability at

UBL.

ii. To determine the effect of supplier management on environmental sustainability at

UBL

iii. To examine how continuous improvement affects environmental sustainability at

UBL.

1.5 Research Questions

i. What is the effect of process streamlining on environmental sustainability at UBL?

ii. What is the effect of supplier management on environmental sustainability at UBL?

iii. What is the effect of continuous improvement on environmental sustainability at UBL?

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1.6 Research Hypotheses

H1: Process streamlining significantly affects environmental sustainability

H2: Supplier management significantly affects environmental sustainability

H3: Continuous improvement significantly affects environmental sustainability

1.7 Conceptual Framework

The conceptual framework is an illustrative model or representation of the relationship between

variables and how they are operationalized for research. In this case, it summarizes the

relationship between Lean Production Systems and Environmental Sustainability.

Lean Production Systems (IV)

Process Streamlining
 Pull systems
 Just in Time
 Autonomation Environmental Sustainability (DV)
 Overall Equipment
Effectiveness
 Resource use
 Reduction landfill
Supplier Management
 Reduction of emission to
 Supplier sensitization
water bodies
 Quality control
 Reduced carbon footprint

Continuous Improvement
 Plan-Do-Check-Act
 Recycle, reuse and waste
treatment

Source: Adopted from literature review (Antony et al., 2022; Marie et al., 2022; Naeemah &

Wong, 2023 and modified by the researcher, 2024)

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Figure 1.1: A conceptual framework showing the extent to which lean production systems

affect environmental sustainability

The conceptual framework (Figure 1.1) on the next page shows that lean production systems

have a direct impact on environmental sustainability. The dependent variable is lean production

systems and is being measured in terms of process streamlining, supplier management and

continuous improvement while the independent variable is environmental sustainability being

measured in terms of resource use, reduction landfill, and reduction of emission to water bodies

and reduced carbon print. For example, a change a process streamlining will bring about in

environmental sustainability such as proper process streamlining practices provide organizations

with the most basic methods and tools for implementing, operating, and monitoring various

business processes in an environmentally sustainable manner.

1.8 Justification of the Study

Several studies have been conducted to investigate the relationship between lean production

systems and environmental sustainability. Many authors such as (Thunkie et al., 2016) claim that

lean production systems have a significant impact on environmental impacts such as air, water

and soil emissions as well as reducing water and energy consumption efficiency.

Fercoq et al., (2016), found that lean manufacturing methods have a significant impact on

reducing environmental impacts such as emissions to air, water and soil, and on the efficiency of

water and energy consumption. Pampanelli et al. (2014) proposed a new model called the Lean

and Green Model that integrates environmental sustainability into lean thinking. This model uses

the Kaizen approach to improve energy flow in a lean manufacturing environment. This model

was validated in 2011 using a case study of a leading global engineering company servicing the

Brazilian automotive and aerospace industries. The model reduced environmental impact of the

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production processes. Most of the studies available have been conducted in Asia, Europe and

Australia (Zhu & Lin, 2018).

It is clear that many of the studies conducted have tried to determine the relationship between

lean production systems and the environmental sustainability. However, there are research gaps

in these studies, that every time a lean production system or principle was applied, there were

environmental benefits. However, it was not clear exactly what kind of effect exists due to a

specific lean production system on the environmental sustainability. Another gap in these studies

is that there were no studies done in Uganda most especially in Uganda Breweries limited.

1.9 Significance of the study

This study provides information on the extent to which direct production systems affect

environmental sustainability at Uganda Breweries Limited, and the environment used for

management in developing practices and procedures to improve sustainability through low

production systems.

The study findings will benefit the government of Uganda especially National Environmental

Management Authority as they will identify lean production systems that can be adopted by both

small and large manufacturing companies in the country to enhance environmental sustainability.

The study findings will identify and close gaps in existing literature regarding environmental

sustainability as well as be used by other researchers by availing areas that need further research

in environmental sustainability and lean production systems.

1.10 Operational definitions of key concepts

For the purposes of this study, the following terms have been operationally defined:

Carbon Footprint: The amount of greenhouse gas emissions, especially carbon dioxide (CO2)

and methane (CH4), that come from all of UBL's activities, including waste generation,

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distribution, and landfills. These traps generate heat in the atmosphere, which leads to global

warming. Typically, the majority of UBL's carbon Footprint will come from power transmission

and consumption.

Autonomation: The intelligent and humanized use of technology and machines to produce

various alcoholic beverages within UBL with the process being sufficiently "aware" of itself so

that it detects process malfunctions or product defects. The production line is stopped

automatically incase an abnormal situation arises.

Waste Treatment: These are activities done by UBL to ensure that waste has the least

practicable impact on the environment. The brewing industry often generates large amounts of

waste water and solid waste.

Customer focus: This refers to the attention and prioritization of the needs, opinions UBL

customer desires and prefers in all activities, from design to distribution. Consumers are

concerned about the effects of climate change, pollution and other environmental factors

that could harm their health, livelihoods and ecosystems.

Plan Do Check Act: PCDA is a management strategy within UBL where possible solutions to

business problems are tested and the results are assessed such that only those that are successful

or workable are implemented. It is a continuous way to improve the quality of processes and

products at UBL in order to reduce defects and potential risks.

Pull Systems: This refers to a manufacturing system within UBL that aims at reducing waste in

the production process by ensuring production of alcoholic beverages depends on the actual

demand or levels of sales.

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Supplier involvement: This is where UBL cooperates vertically with its suppliers in the stages

of product innovation, development, or production. Suppliers feel entitled to deliver high quality

raw materials to reduce on those that defect and end up in the landfill.

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