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An evaluation of success factors using the AHP to implement ISO 14001-based EMS
Kwai-Sang ChinSimon Chiu V.M. Rao Tummala
Article information:
To cite this document:
Kwai-Sang ChinSimon Chiu V.M. Rao Tummala, (1999),"An evaluation of success factors using the AHP to
implement ISO 14001-based EMS", International Journal of Quality & Reliability Management, Vol. 16 Iss 4
pp. 341 - 362
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implement
ISO 14001-based EMS Received February 1998
341
1. Introduction
Environmental protection is now increasingly demanded by individuals, major
customers and even governmental authorities. Companies, whether they
belong to manufacturing, engineering services or service industries are
becoming responsible for controlling and improving their environmental
performance. They are concerned more with achieving and demonstrating
sound environmental performance within the context of increasingly stringent
legislation and profit motivation, or in search of improved public relations. The
advantage of market differentiation provided by an environmental
management system certification is another significant driving force (Jo, 1990;
Anderson, 1995; Sayre, 1996). However, it is anticipated that it may soon
change from market differentiation and market advantage to market demands
and access to markets. International Journal of Quality &
The introduction of the ISO 14001 Environmental Management System Reliability Management,
Vol. 16 No. 4, 1999, pp. 341-361.
(EMS) standard by the International Organization for Standardization (ISO) # MCB University Press, 0265-671X
IJQRM will have a significant impact on manufacturing and service industries in
16,4 designing and implementing an EMS-based system to minimise the impact of
their operations on the environment. The customers who buy their products or
services, as they are also becoming more environmentally conscious may also
feel the impact. As stated by Kuhre, the greatest impact to the environment will
be in the reduction of hazardous waste (Kuhre, 1995). The ISO 14000
342 certification requires that companies must reduce the use of hazardous
materials and processes in order to minimise and manage waste most
efficiently. The certification would also imply that the environment is not
significantly damaged in the process when companies make products or
provide services. Most customers are already demanding this type of
certification now in terms of quality with respect to ISO 9000 standards. The
experience with ISO 9000 can cast some light on the impact of ISO 14000. The
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ISO 9000 series of standards were first published in 1987 and later revised in
1994 (ISO 9000, 1994). Today, more than 70,000 companies have been
registered to ISO 9000 standards in more than 75 countries. Since the interest
and the attention being paid to quality management issues before the
introduction of ISO 9000 in no way matches the current interest in
environmental management issues, it is logical to predict that the impact of
ISO 14000 will at least match that of ISO 9000. It is envisaged that ISO 14000
will be a very significant development and will exert tremendous influence at
both company and industry levels in near future (Lin, 1995; Clements, 1996;
Taylor, 1996; Affisco et al., 1997). The impact may be felt in terms of the
environment, customers, and operations of most organisations as well as
agencies and most components of society. The purpose of this paper is to
present a methodology to evaluate and prioritise the critical factors involved in
implementing ISO 14000-based EMS and also to report the decision factors
determined in current Hong Kong manufacturing industry. First, based on
literature review, the strategic and their defining operational success factors to
design and implement an environmental management system based on
ISO 14000 will be identified. The AHP model is formulated using these success
factors to evaluate and prioritise them in order to recommend strategies to
implement EMS.
attributes relative to each sub-problem. The top level of the entire hierarchy
represents the goal (such as the implementation of ISO 14000-based EMS) of
the problem. The intermediate levels represent the strategic as well as
operational factors and the last level usually represents alternatives or actions
to be considered to achieve the goal. Decision elements at each hierarchy level
are compared pairwise and are assigned relative scales that reflect the strength
with which one element dominates another. Based on these pairwise
comparison matrices, local and global priority weights will be determined and
the ranking of the alternatives occupying the last level of the hierarchy will be
made to satisfy the overall goal of the problem. There are numerous examples
illustrating the powerful application of AHP methodology to determine
priorities and to conduct benefits/costs analysis (Saaty, 1990; Saaty and
Vargas, 1994; Tummala and Wan, 1994).
Some of the most interesting applications include assessing and prioritizing
criteria/alternatives in new product designs, new product pricing, selecting
bridges and research projects, use of technologies, carrier/degree programs,
CIM benefits and risks, facilities location/layouts, and supplier selection
(Tummala and Wan, 1994). Furthermore, the AHP is integrated with operations
research techniques such as integer programming, goal programming, cost/
benefit analysis and dynamic programming in finding solutions for several
problems. The cost/benefit analysis using AHP has been applied in several
areas (Tummala and Wan, 1994; Tummala et al., 1996a; Tummala et al., 1996b)
including:
. authorizing riverboat gambling;
. energy evaluation;
. allocation of resources; and
. prioritizing success factors for CE implementation.
Applying the AHP to cost/benefit analysis can improve the traditional decision
making by cost/benefit analysis. We can translate benefit/cost problem into
meaningful complementary benefit and cost hierarchies, and use pairwise
IJQRM comparison judgements to quantify intangible and noneconomic factors
16,4 included in the hierarchies. As Saaty argued, these hierarchies would enable us
to make explicit and informed trade-offs among many attributes or criteria in
selecting the best course of action, even when the attributes include multiple
performance goals and output activities (Saaty, 1990). Thus the AHP modelling
process allows more flexibility to aid the management decision making
348 process. The input provided by evaluators involves only the pairwise
comparison judgements based on a nine-point scaling system (Saaty, 1980). It
also allows for disaggregation and the dependence-independence relations
among attributes by decomposing the complex problem into different levels of
meaningful hierarchies so that the evaluators can easily assess pairwise
comparisons. This may enable us to reduce the assessment bias. Even though
some argue against the use of AHP because of certain measurement problems,
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Figure 1.
Implement Do Not Benefits hierarchy of
(I) Implement ISO 14000 EMS
(NI) implementation
Cost of Cost of
Initial Set-up Maintenance
(CIS) & Improvement
(CMNI)
Figure 2.
Costs hierarchy of
ISO 14000 EMS Implement Do Not
(I) Implement
implementation (NI)
important benefit. Similarly, the priority weights of the two alternative actions
considered at the fourth level indicates that all the three listed benefits suggest
the implementation of ISO 14001-based EMS.
ISO 14000 based EMS. Interestingly, the same is the conclusion by considering
the costs hierarchy. Therefore, the benefits/costs ratio, which is determined as
equal to 1.238 for "implement ISO 14001 based EMS", indicates that
implementing the environmental management system based on ISO 14000 is
the best course of actions for Hong Kong manufacturing industry.
Interestingly, we can arrive at the same conclusion by considering the
individual benefit/cost ratios of LLI/CIS, IP/CIS, ICISM/CIS, LLI/CMNI, IP/
CMNI, and ICISM/CMNI.
inconsistencies among the criteria used in the AHP model. As Saaty argued on
several occasions, a certain degree of inconsistency in making judgements is
acceptable in real world application (Saaty, 1994).
In this paper, we formulated an AHP model to assess decision factors,
benefits and costs in order to determine their relative priorities and to decide
whether or not to implement ISO 14001-based EMS for Hong Kong
manufacturing industries. Interestingly, the same model can be applied if the
CEO of a company wants to assess success factors using his/her own personal
judgements. He/she can use the model and evaluate the relative priorities in
order to assess the current status and to develop appropriate strategies to
implement ISO 14001-based EMS. Or, a project team formed by senior
management can collect data systematically and use the model to determine the
relative priorities to assess the company's status and then develop appropriate
implementation strategies. Even though the model is applied to Hong Kong
manufacturing industries, it can be applied to determine the relative priorities
among success factors and to develop appropriate strategies for other
countries.
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Appendix 1 Evaluation of
Level 1: Given level 0 goal success using
MA 0.432 the AHP
OC 0.124
ENSA 0.372
TA 0.072
359
Level 2: Given level 1 factors
MA OC
TMC 0.679 SNR 0.423
AEP 0.218 TNA 0.206
RMR 0.103 CM 0.091
DNC 0.156
EP 0.125
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ENSA TA
EL 0.604 ESA 0.507
MP 0.303 MNME 0.166
ER 0.092 PPE 0.327
ENSA TA
EL 0.604 ESA 0.507
MP 0.303 MNME 0.166
ER 0.092 PPE 0.327
Appendix 4