Keywords

1 Introduction

On a worldwide scale, the plastics industry plays an important role. Currently, Asia accounts for approximately 50% of the plastics production around the world, followed by Europe at 19% (mainly focusing on production of raw materials and general plastic products). In Peru, this industry represents 4% of the country’s industrial GDP and generates around 52,000 direct jobs in both the plastics production and import segments. Most of the companies operating in this sector are small and medium-sized manufacturers of plastic products for the mining and construction sectors, which means that their growth is proportional to the growth reported for these industries.

According to our study, the main challenges faced by small and medium-sized businesses operating within the plastics sector are related to rising raw material costs, inadequate labor allocation, and specially, maintenance costs. These issues are deemed relevant because the plastics sector contributes to the Peruvian economy both directly and through other activities. Likewise, if this sector complies with all the standards and starts operating from a different perspective, it will have positive impacts on society.

2 State of the Art

2.1 Production Management Model for Small and Medium Plastic Businesses

This section reviews academic papers clearly focusing on Production Management applied to the small and medium-sized businesses operating within the plastics industry. First, most authors propose eco-friendly models developed through quantitative methods applied in agricultural industries. Their success is measured using the regression calculation, through which they obtain lesser values than the original estimates, thus generating sustainable results [1, 2]. Likewise, other authors implemented production models aiming to decrease reprocessing rate, increase delivery deadline compliance, and reduce defective products, thus generating significant savings for the company. For example, a plastic company managed to reduce its delivery time from 30 min to just 5 min, evidencing a positive impact on process times [3, 4]. In addition, these papers also reveal that production costs are often associated with final deliveries to the customer. In this sense, the models proposed by different authors agree that this may be addressed by managing quality costs, such as reprocesses, delivery, waste, defective products, and even return costs. However, as the production improvements were implemented, these indicators decreased [4, 5].

On the other hand, the conclusions reported by these authors at the end of their papers should be reviewed. As they claim, environmental impact will sooner or later become a key factor for business development and will generate competitive value for customers. Hence, the methods implemented must be quantitatively supported so that the companies may exactly know their environmental footprint and take appropriate actions accordingly. At this point, most authors also agree in discussing and addressing production waste [1, 3]. This is a critical issue because adequate waste management may be able to generate additional revenue for the company as its capabilities are fully leveraged. As it may be observed, Production Management models are quite diverse, and none is better than the rest. Some models are simply better suited for a given company based on its existing conditions (we only assessed small and medium-sized businesses operating within the plastics industry) [3, 4].

2.2 Lean Green, Circular Economy, Production Management Model for Small and Medium-Sized Businesses

Finally, this section cites conclusions and results obtained by authors who implemented a Production Management model using the Lean Green methodology and a Circular Economy. In the literature reviewed, at least two authors demonstrated a positive correlation between the Lean and Green methodologies, obtaining positive performance indicators and in one particular study, achieving a reduction in automobile water consumption [6, 8]. In addition, a couple of authors agree that the good Lean Green practices implemented at a manufacturing company by eliminating or reducing the seven wastes had a direct positive impact on their environmental and operational performance. Furthermore, these improvements also exerted a positive effect on green supply chain practices, concluding that these three steps complement each other and align well with corporate goals [6, 8]. On the other hand, these authors warn us that implementing agile methodologies in a company is already complicated, and that if we were to add to an environmental sustainability vision and perspective, their implementation would be ever harder. Consequently, if these two tools were implemented at a manufacturing company, the authors focus on measuring their success expectations in environmental and operational terms [6, 7].

Finally, Zhu addresses the proper implementation of Lean Green and Circular Economy using coal production measurement methods and optimizing processes, as this can help the company identify waste management improvement opportunities based on variables such as time, energy, materials, and coal transportation [9].

3 Contribution

3.1 Rationale

For the development of the proposed model, the reviewed literature was used as a referential foundation, because some of the reviewed papers agreed in some respects. In addition, these papers also evidenced that most of the small and medium-sized businesses operating within the plastics sector, at a worldwide scale, are still manufacturing companies. Within this context, the proposed model focuses on improving production processes and encouraging good supply practices. Another important model cornerstone comes from Lean Green: engaging company employees in implementing comprehensive improvements. On the other hand, as it has become popular in recent years due to new environmental laws and has not been well researched yet in the literature, we decided to supplement our Lean Green model with Circular Economy and its three phases: production, consumption, and recycling. In this way, we would be able to introduce environmental sustainability in the company. Finally, the outputs generated from this production model are a reduction in material costs (variable costs), an improvement in customer relations and the creation of new environmental policies, thus making the plastics industry eco-friendlier.

3.2 Proposed Model

Variable Cost Reduction model proposal using Lean Green and Circular Economy tools (Fig. 1).

Fig. 1.
figure 1

Proposed model

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3.3 Proposed Method

Figure 2 shows a flowchart that denotes the new purchasing process for both raw materials and spare parts, considering the KanBan methodology already implemented.

Fig. 2.
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Model implementation flowchart

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3.4 Indicators

  • Percentage of raw materials purchased against total sales.

  • Average downtimes (machine breakdowns) between scheduled outages.

  • Percentage of machine repair costs against total sales.

  • Current percentage of 5S compliance.

  • Percentage of raw materials reused against total raw material used.

4 Validation

4.1 Description of Case Study

The proposed model was validated at the Polisa SRL company in the city of Chiclayo, because of the great potential for improvement it exhibits and the amount of history data provided for this research study.

4.2 Initial Discussion

Three different scenarios will be assessed to determine possible results in three different simulated contexts:

  • First Scenario: Pessimistic.

  • Second Scenario: Expected.

  • Third Scenario: Optimistic.

4.3 Results Analysis

See Table 1

Table 1. Results analysis
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5 Conclusions

Regarding the initial diagnostic phase, the 5S audit tool was used to find out the point of departure for the study; the result was 37.5%. After implementing the proposed improvements, a second audit revealed that we had reached 80%, which is a considerable improvement.

To solve the raw material issue, a new procurement process was established, including inventory review, vendor background checking, and Kanban support.

For maintenance, we implemented the TPM tool, decreasing maintenance costs, and increasing machine efficiency, as validated through the Arena simulator.

An additional process was proposed for reusing raw materials through Circular Economy, which evidenced that the implementation of the Lean Green model will not be successful without active engagement from all the stakeholders, including customers and vendors.