Manufacturers are often asked to improve everything at once: quality, delivery, flexibility, cost and, increasingly, environmental performance. The request sounds balanced. The operating reality may not be. A plant with unstable processes, unreliable equipment, constantly changing schedules and inconsistent quality cannot simply add another target and expect lasting results. It may report improvement for a while, but the underlying system keeps generating rework, expediting, waste, excess stock and reactive decisions.
An older idea in operations strategy offers a useful way to think about this. It suggests that capabilities are built on top of one another, like layers, and that some must be reasonably solid before others can be improved reliably. The idea is not a fixed law, and its sequence should be diagnosed rather than copied. But it explains why so many cost-cutting and sustainability programmes stall: they try to build on a foundation that is not there.
This article explains the idea of cumulative capability, why many environmental outcomes are really operational outcomes, how to diagnose which layer is limiting a business, and how a small manufacturer can sequence improvement so that each step makes the next one easier.
The sand-cone idea
The sand-cone model, proposed in operations research around 1990 by Kasra Ferdows and Arnoud De Meyer, suggests that manufacturing capabilities are best built cumulatively. Quality comes first, then dependability, then flexibility, and finally cost efficiency, with each new layer added while the ones beneath continue to be strengthened. The image is a cone of sand: to make it taller, you must also widen the base.
The model challenged the common assumption that every improvement involves a trade-off, such as cost against quality or speed against flexibility. It argued that some capabilities reinforce others when developed in the right order. Better quality reduces rework. Better dependability reduces buffers and firefighting. Better flexibility reduces expensive emergency responses. All of these create a stronger base for cost performance.
A 2017 study by Gold, Schodl and Reiner compared manufacturing capabilities in plants across older and newer European Union member states and extended the model to include sustainability, in both reactive and proactive forms. The authors were careful about its limits. They noted that the sand-cone model lacks universal empirical support, that their data was collected some years before publication, and that operating conditions such as labour costs, supply-chain demands and stakeholder pressure can change which capabilities need attention first.
The durable lesson is therefore not a fixed sequence. It is that capabilities interact, and improvement targets should be designed with the maturity of the operation in mind.
Environmental outcomes are often operational outcomes
Many environmental problems are operational problems in disguise:
- Scrap is both a quality failure and a waste of materials and energy.
- Unplanned downtime increases energy used per good unit, because equipment idles, restarts and runs below its best rate.
- Poor scheduling creates extra changeovers, cleaning, transport and expediting.
- Excess inventory ties up materials, space and money, and some of it eventually becomes waste.
- Unstable processes make environmental performance swing from shift to shift.
That is why sustainability belongs inside the development of operational capability, not beside it as a separate scorecard.
Common misreadings
- Sustainability is just another performance dimension. If management adds a new measure without changing how the operation works, teams are forced to trade one target against another at the point of execution.
- Cost should always come first. Premature cost cutting can damage the capabilities that future performance depends on. Reducing preventive maintenance saves money this quarter while degrading reliability, quality and energy performance later. Cutting training lowers labour cost while increasing variation and safety risk.
- A best-practice sequence applies everywhere. The right sequence for a high-mix job shop differs from a stable food line. A new plant differs from a mature one with strong quality but high environmental exposure. Diagnose before copying.
- Compliance is capability. Reactive sustainability responds to legal, customer or community requirements: what must we do? Proactive sustainability is a capability the business chooses to build: what can our operation reliably achieve and improve? The first is a floor. The second can become an advantage.
Five layers as a diagnostic
The layers below are a diagnostic scaffold, not a universal sequence. Use them to find which layer is currently limiting performance.
| Layer | Diagnostic question | Typical warning sign |
|---|---|---|
| Stability | Are core processes predictable? | Variation, defects, reactive adjustments |
| Dependability | Can equipment and schedules be relied on? | Breakdowns, expediting, safety stock everywhere |
| Flexibility | Can the operation adapt without excessive loss? | Wasteful changeovers, firefighting, constant rescheduling |
| Efficiency | Can resources be reduced without damaging lower layers? | Cost cuts followed by more defects or downtime |
| Sustainability | Can environmental performance be improved deliberately and repeatedly? | Compliance-only activity, isolated projects |
A mature plant may already have strong quality and dependability but poor visibility of energy use. Another may have excellent environmental technology but unstable work practices. The right next step depends on which layer is weakest relative to what the business needs.
How the layers connect
Quality creates the foundation
Defects consume materials, energy, labour and capacity without creating anything a customer will pay for. Reducing variation therefore has economic and environmental benefits at once. A process that cannot hold its own settings within control will struggle to hold environmental performance within control. Measures such as first-pass yield, standard work and process capability matter to sustainability, even if they never appear on an environmental dashboard.
Dependability reduces the cost of instability
Unreliable equipment and schedules create compensating behaviour: extra stock, overtime, express freight, spare capacity and emergency repairs. These protect customers while increasing resource use. Improving dependability often creates environmental headroom indirectly, though the benefit should be checked rather than assumed.
Flexibility can help or hurt
Flexibility is not automatically sustainable. It can avoid overproduction and match demand closely, but it can also mean frequent changeovers, small batches and inefficient running. The question is whether flexibility is designed into the process, through quick changeovers and sensible scheduling, or bought through buffers and heroics.
Efficiency must not consume the base
Cost reduction is essential, but it should be tested against the layers beneath it. Does a proposed saving remove waste, or does it remove maintenance, training, inspection or spare capacity that stability and dependability rely on? Savings that erode the base usually return as higher costs later.
Proactive sustainability needs strategic choices
Once the operation is reasonably stable, sustainability can move from housekeeping into design and investment: eliminating a hazardous input, redesigning a product to use less material, recovering materials in a closed loop or working with suppliers on upstream impacts. These decisions affect capital, technology, sourcing and competitive position.
Context matters, but it is not an excuse
The 2017 study discussed both regional differences and earlier research suggesting that organisational culture can influence manufacturing performance more than national culture in some settings. For any business, this is a reminder that local conditions shape priorities, but management still sets standards, learning systems, investment priorities and expectations. Context should inform the sequence, not excuse low capability.
Sequence improvement by dependency
When several improvement projects compete for the same people and money, sequence them by what depends on what, not by which department proposed them. Make the dependencies explicit. If a scrap-reduction target assumes stable tooling, reliable measurement and consistent operator methods, those foundations come first. Avoid launching environmental projects that compete with unresolved foundation problems, unless the environmental risk itself demands immediate action.
Use measures that show joint value. Material loss per good unit, energy per good unit and water per good unit connect quality, dependability and environmental performance in one number, and they improve when the foundations improve.
When technology is the right step
None of this means technology investment should wait indefinitely. Some environmental problems need new equipment, a different process or a redesigned product, and no amount of stability work will solve them. The point is timing and fit. New technology installed on an unstable operation often underperforms, because it inherits the same variation, breakdowns and scheduling chaos as the equipment it replaced. Installed on a stable base, it is more likely to deliver what was promised, and the business is better able to learn how to use it. Before a significant purchase, ask whether the layers beneath are strong enough for the investment to perform, and if not, whether a modest foundation project should come first.
A worked example
This is an illustration. A sauce manufacturer with 22 staff is asked by a major customer to reduce waste and energy per unit by 15% within a year. The first plan is to buy a more efficient air compressor, install LED lighting and announce a waste target.
The owner and production manager first diagnose the layers:
- Stability is weak. Fill weights vary widely. To avoid underfilled jars, the line overfills by about 3% on average, and about 4% of jars are rejected for fill or seal problems.
- Dependability is weak. The capping machine breaks down for about six hours a week, and each stoppage means restarting, purging and reworking partly filled product.
- Flexibility is bought with firefighting. The schedule changes daily to chase urgent orders, creating about twelve cleans a week.
They sequence the work:
- Stability: calibrate the filler, set standard settings for each product and introduce simple fill-weight charts. Overfill falls to about 1% and rejects to about 1.5%.
- Dependability: a preventive maintenance routine for the capper reduces breakdowns to about two hours a week.
- Flexibility: a schedule frozen three days ahead, with products grouped sensibly, cuts cleans to about eight a week.
- Efficiency and sustainability: only then does the team survey compressed-air leaks and right-size the compressor settings.
Material lost per good unit, through overfill and rejects together, falls from about 7% to about 2.5%. Fewer stoppages and cleans reduce energy per good unit by about 12%, and the compressed-air work removes about another 5%. Together, energy per good unit falls by roughly 16%, meeting the customer’s target with little capital spending, while also improving delivery reliability.
How this applies to a small Australian business
Small manufacturers often face customer or tender requirements for environmental improvement alongside pressure on cost and delivery. Practical steps:
- Diagnose the weakest layer before setting new targets.
- Link each target to the capabilities it depends on.
- Fix stability and dependability before expecting lasting efficiency or environmental gains.
- Use per-good-unit measures for materials, energy and water.
- Test cost cuts for their effect on maintenance, training and quality.
- Distinguish reactive obligations from proactive capabilities, and confirm legal obligations with the relevant regulator.
- Make environmental claims carefully: the ACCC publishes guidance on environmental claims under the Australian Consumer Law.
The articles on sustainability as an operating choice and lean as an operating system cover related ideas.
Signals worth watching
- Sustainability projects failing repeatedly because basic stability is missing.
- Cost reductions followed by more defects, downtime or waste.
- Environmental performance varying widely between shifts or products.
- Delivery depending on individual heroics.
- Compliance actions disconnected from improvement.
- Several programmes competing for the same technical people.
- Roadmaps copied from other sites without diagnosis.
- Environmental measures improving while stability worsens elsewhere.
Common mistakes
- Adding targets without strengthening the operation beneath them.
- Cutting maintenance or training to meet short-term cost goals.
- Copying another plant’s improvement sequence.
- Treating compliance as the whole of sustainability.
- Running environmental projects in isolation from quality and reliability work.
- Measuring totals only, without per-good-unit measures.
Frequently asked questions
Does quality always have to come first? Not always, but it often does, because so much waste and cost flows from defects and variation. Diagnose your own operation rather than following any sequence mechanically.
What if a customer requires environmental improvement immediately? Meet any immediate requirement, but look for the operational causes behind the environmental measure. Often the fastest durable improvement comes from stability and reliability work.
Can a small business with limited staff work on several layers at once? Usually only one or two. Choose the layer whose weakness causes the most loss, make solid progress there and then move on. Spreading a small team across many initiatives tends to leave all of them half-finished.
How do we know which layer is weakest? Look at where problems recur: variation and defects point to stability; breakdowns and expediting to dependability; costly changeovers and constant rescheduling to flexibility.
Questions to ask
- Which operational capability is the real constraint behind our sustainability or cost target?
- Are we cutting costs in ways that weaken quality, dependability or flexibility?
- Which of our environmental activities are obligations, and which are capabilities we are choosing to build?
- What local conditions should change the order in which we improve?
- Which projects improve quality, cost and environmental performance at the same time?
- Are we building an operation that can improve repeatedly, or delivering one-off projects?
Bringing it together
Sustainability and cost targets are easy to add to a scorecard and hard to build into an operation. The idea of cumulative capability is a useful discipline because it asks what sits beneath each target. Quality, dependability, flexibility and efficiency interact with environmental outcomes, and the order in which to strengthen them should be diagnosed rather than copied. A capable operation does more than meet a requirement. It understands the causes of its own losses, absorbs new technology and improves reliably.
Source: KEVOS notes, drawing on the sand-cone model of cumulative manufacturing capability and S. Gold, R. Schodl and G. Reiner, “Cumulative manufacturing capabilities in Europe: integrating sustainability into the sand cone model”, Journal of Cleaner Production (2017). Examples and figures in this article are illustrations.
