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Sustainability Performance Measurement for Green Supply Chain Management
6th IFAC Conference on Management and Control of Production and Logistics The International Federation of Automatic Control September 11-13, 2013. Fortaleza, Brazil
Sustainability Performance Measurement for Green Supply Chain Management NADINE KAFA, YASMINA HANI, ABEDERRAHMAN EL MHAMEDI Equipe MGSI/ LISMMA – Université de Paris8 140, rue de la nouvelle France, 93100 Montreuil, France (e-mails: [email protected], [email protected], [email protected]) Abstract: This article focuses on sustainability performance in supply chain management (SCM) and adding the “Green” concept to it so as to emphasize the importance of environmental issues and the need of eco-friendly systems. The purpose of this study is to propose a model for evaluating the sustainability performance of green supply chain management (GSCM). This article seeks to develop key performance measures for GSCM incorporating considerations of sustainable development (SD).We present a literature review on green supply chain management and sustainability performance measurement. Key indicators for the green supply chain performance measurement under the context of sustainable development are derived from a literature. We propose an analytical model to explore the influence of green practices on the sustainability performance in supply chain. This is a first step towards providing a comprehensive overview that explains the relationship between GSCM and sustainability performance. We conclude by suggesting perspectives for future research. Keywords: Green supply chain management, sustainability performance measures, green practices, performance assessment. This article is divided into six main parts. The second section presents a review of the literature on GSCM and the main green practices of supply chain management. In the next section, a brief review of the literature on green supply chain management performance measurement is presented. In the fourth section, we developed key performance measures and indicators for GSCM. In the fifth part, an analytical model was designed to assess the impacts of GSCM practices on performance in the context of sustainable development. Finally, the paper ends with conclusions and directions for future research
1. INTRODUCTION The subject of green supply chain management (GSCM) attracts a growing interest in academic and professional literature since 1990. The GSCM is defined as the achievement of economic, environmental, and social goals in the systemic coordination of key inter-organizational business processes to improve performance in the long-term for the organization and its partners in the supply chain (Ageron, et al., 2012) .However, the literature in the field of GSCM is in the early stages of development, with related studies dealing particularly with theoretical consideration and anecdotal indication (Quazi, 2001). A numbers of frameworks for performance measurement systems (PMS) in the supply chain have been developed since 1980s. The literature emphasizes the importance of performance measurement at different levels of decision making and control (Gunasekaran, et al., 2004). However, there is a lack of studies linking performance measurements and green supply chain management (Hervani, et al., 2005).
2. GREEN SUPPLY CHAIN MANAGEMENT Different definitions of green supply chain (GSC) exist in the literature. Some studies defined the GSC as closed-loop supply (Beamon, 1999a). Some have called it as a sustainable supply chain (SSC) (Ageron, et al., 2012) and (Linton, et al., 2007), environmental supply chain, and ethical supply chain (Beamon, 2005). It has also been described as a socially responsible supply chain (Salam, 2009). Figure 1 shows the material flow involved in a green supply chain (Olugu, et al., 2011).
Typical performance measurement systems models were based on financial performance measures which later were considered insufficient. Since non-financial performance measures have received much attention (Beamon, 1999b). The results of (Azevedo, et al., 2011) suggest that environmental performance indicators are increasingly important, and develop sustainable business practices.
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GSCM is a concerted effort across the enterprise and is more than simply implementing some ecological practices, but rather a coherent approach for improving environmental and organizational performance of all levels of management (Zhu, et al., 2007).
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(Srivastava, 2007) defined GSCM as integrating environmental considerations into SCM including product and service design, procurement, manufacturing processes, distribution, and end-of-life management of the product to achieve sustainable competitive advantage. Manufacturer
Distributor
2.2 Eco-Design (ECD) It is about taking into account systematically issues related to environmental safety and health over the product life cycle with a potential to be reused or recycled at end-of-life (Linton, et al., 2007). Eco-design process includes the following green practices:
Customer
• Design of products to reduce material/energy consumption during production and product use.
Supplier Recycler
Collector
• Design of products for (3Rs) reuse, recycle, and recovery of material and component parts.
Fig. 1.Green supply chain (Olugu, et al., 2011)
• Design of products to avoid the use of hazardous materials.
The different processes and activities are encompassed in GSCM have been discussed by (Hervani, et al., 2005). GSCM can therefore be defined by the following equation:
2.3 Green Manufacturing (GM)
Green supply Chain management (GSCM) = Green Purchasing (Min & Galle, 1997) + Eco-Design (Linton, et al., 2007) + Green Manufacturing (Deif, 2011) + Green Distribution (Rao & Holt, 2005) + Reverse Logistic (Pochampally, et al., 2009).
Green manufacturing is a combined set of harmless production processes which reduce resource consumption and generate a little or no waste and pollution (Deif, 2011) to provide pollution free environment to consumers, employees and community. (Pal, 2002) stated that “green manufacturing is not an option but a necessity for our well-being and survival in today’s competitive environment”.
The different drivers of companies to adopt GSCM initiatives are government regulations, stakeholder pressures, economic interests, and ecological interests of firms (Min & Galle, 1997), (Hervani, et al., 2005), and (Zhu, et al., 2007). Many companies have adopted "green" initiatives and implemented GSCM practices to meet their social responsibility (Salam, 2009), examples like:
GM aims to reduce the environmental burden and can lead to lower raw material costs, production efficiency gains, reduced environmental expenses, and improved public image by using appropriate materials and innovative environmental technologies (Deif, 2011).
The furniture manufacturer IKEA seeks a sustainable mode of transport that reduces the ecological effects. L'Oreal, HP, IBM, GE, and Dell have all taken the term "green" as an important value for their business and adopted of new energysaving technologies in order to improve good public image or "green image". BMW, Pepsi-Cola, and Kodak have implemented reverse logistic process for economic benefits.
Green manufacturing practices are presented: The 3Rs in green manufacturing process.
•
The use of advanced environmental technologies.
2.4 Green Distribution (GD) Green distribution process is defined as the integration of environmental issues into packaging, transportation and logistics activities (Rao & Holt, 2005). Thus, green distribution practices are presented:
2.1 Green Purchasing (GP) Green purchasing is defined as an environmentally-conscious purchasing activity that ensures the purchased materials and products meet the environmental goals set by the purchasing company (Min & Galle, 1997). GP managers monitor the issue of sustainability in the purchasing process (Min & Galle, 1997) and (Salam, 2009), and also traditional purchasing criteria such as cost, quality and delivery (Zhu, et al., 2008).
• Green packaging: the use of environmentally friendly materials and recycled packaging with improved packaging designs and techniques help companies to reduce waste and costs. • Green transportation and logistics: the consolidation of orders and route optimization are energy saving ways and methods to reduce CO2 emissions.
Green purchasing process includes the following green practices: • Selection of suppliers based on environmental criteria favoring those which are certified according to ISO 14000. •
•
2.5 Reverse logistics (RL) Reverse logistics is the process of retrieving used product from the point of consumption to the point of origin for possible reusing, recycling, and remanufacturing (Rao & Holt, 2005), (Pochampally, et al., 2009), and (Azevedo, et al., 2011). It represents the transformation of used products into reusable products.
Environmental collaboration with suppliers.
• The 3Rs (reduce, reuse, recycle) in purchasing process.
Reverse logistics practices include collection, combined, inspection, selection, cleaning, sorting, recycling, recovery, 72
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• Remanufacturing that includes the treatment of the product such as the repair, reuse, reconditioning, disassembly, reassembly, repacking, and recycling.
redistribution, and disposal. RL practices found in the literature are presented: • Collection: used products and/or used packaging are selected, collected and transported to facilities for remanufacturing.
All GSCM practices and their benefits are shown in table (1).
Table1. GSCM practices
Green manufacturing Reverse logistic
Green distribution
GSCM
Eco-design
Green purchasing
Green Practices
Benefits
Selection of ecosuppliers Environmental collaboration with suppliers. The 3Rs Design of products to : Reduce material/energy consumption The 3Rs Avoid use of hazardous materials The 3Rs Advanced environmental technologies
Green packaging Green transportation
Collection Remanufacturing
References
Reduce the environmental cost Good "green" image
(Min & Galle, 1997), (Zhu, et al., 2008),and (Salam, 2009)
Improved the reuse, recycling and remanufacturing opportunities Access to green market Higher eco-efficiency
(Zhu, et al., 2007) , (Linton, et al., 2007), and (Ageron, et al., 2012)
Improved sustainability performance by reducing waste and therefore costs
(Pal, 2002) and (Deif, 2011)
Reduce packaging costs Reduce fuel consumption Less noise, pollution, and traffic Better relationship with customer and public Reduction of environmental burdens on the final disposal Reduction of environmental costs Reuse of valuable components of an end-oflife product
(Rao & Holt, 2005) and (Ageron, et al., 2012)
(Rao & Holt, 2005), (Pochampally, et al., 2009) , (Azevedo, et al., 2011), and (Ageron, et al., 2012)
According to these researchers the importance of studying the performance measurement has increased in recent years. However, the development of the performance measures in supply chain is a difficult problem and there is very little research in performance measurement in the current strategies for green supply chain management (Hervani, et al., 2005).
3. GREEN SUPPLY CHAIN PERFORMANCE MEASUREMENT This section presents a literature review concerning green supply chain performance measurement. For (Harrington, 1991) “If you cannot measure it, you cannot control it. If you cannot control it, you cannot manage it. If you cannot manage it, you cannot improve it”.
In fact, the absence of performance measurement has been recognized as one of the major problems in supply chain management (Charan P, 2008).
It is an established fact that manufacturing companies have recognized the importance of supply chain management to enhance their competitiveness and most companies have realized that to move towards efficient and effective supply chain, its performance should be evaluated (Gunasekaran, et al., 2004).
(Gunasekaran, et al., 2004) highlighted the need for supply chain performance measurement under following reasons: the lack of the approach that balance between financial and nonfinancial performance measures, and the lack of understanding on deciding on the number of metrics to be used. 73
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4. SUSTAINABILITY PERFORMANCE MEASURES FOR GSCM
There is a real need to focus on measuring performance in supply chain in which the company is a partner (Charan P, 2008). According to the nature of the supply chain, any factor which affects any specific item in the chain will be extended to the whole of the chain (Sabri & Beamon, 2000) . Thus, in green supply chain management, the internal processes have to be evaluated, coupled with the external processes (Olugu, et al., 2011).
Based on different studies in the literature, we developed key performance measures and indicators for GSCM that are grouped under the context of sustainable development. 4.1
Economic perspective
4.1.1. Environmental cost: This is the total cost of going green incurred by the supply chain in ensuring that its processes are environmentally and sustainable. This measure includes different metrics such as cost associated with environmental compliance, recycling cost, cost associated with the consumption of energy, disposal costs, and cost for purchasing environmentally friendly materials. (Klassen & Whybark, 1999) have highlighted that the investment model of a company has a large influence on the environmental performance. The environmental cost has been considered by many researchers as one of the major measures for an effective GSCM.
The reviewed studies have defined the performance measurement system in different ways. (Neely, et al., 2005) defined it as a balanced and dynamic system used in quantifying the efficiency and/or effectiveness of a particular activity to support the decision-making process by collection, compilation and analyze the information. For (Bititci, et al., 2000) performance measurement is the reporting process that provides feedback to employees about the results of actions and activities. Many researchers looked at the GSCM as a force to enhance the competitiveness and to meet the environmental regulations and pressure from stakeholders (Hervani, et al., 2005). According to (Chardine-Baumann, 2011) performance indicators in supply chain management should be defined to control the effort of companies in achieving sustainable development at all levels. Performance measurement has the advantages of stabilizing the GSCM process and identifying opportunities for improvement within the system (Bond, 1999) cited by (Olugu, et al., 2011). It is important to evaluate the overall performance of the entire chain for an effective green supply chain management (Beamon, 1999a).
4.1.2. Traditional supply chain cost: This is the habitual cost produced as a result of a usual operation in the supply chain. It has been always considered as a key measure of the supply chain performance. It includes all costs accruable in ensuring that products get to the end customer. The traditional supply chain cost is influenced in one way or another by green practices of supply chain management. For example, it is supposed that the cost of delivery and the cost of inventory will be reduced as a result of GSCM.
Many frameworks in the field of supply chain performance measurement have been developed over the last two decades. The existing approaches to assess sustainability performance in the supply chain or in the organization are grouped into four categories: (i) the use of the Global Reporting Initiative (GRI 2007); (ii) the use of the International Organization for Standardization (ISO) like ISO 14031 (ISO 2004) ;(iii) the use of performance measurement system like Green SCOR (SCC 2008), and sustainability balanced Scorecard (SBSC); (iv) The use of others approach such as decision-making tool.
4.1.3. Quality: This measures the standard of the product. According to so many studies, this dominate measure has a very significant impact on supply chain performance. This measure involves diverse metrics such as the level of customer complaints, the availability of product warranty, the percentage decrease in scrap and rework, and the percentage decrease in delivery unreliability. 4.1.4. Flexibility: This means the ability of supply chain for adapting to suit the different scenarios that could occur due to changes in normal processes of the supply chain. It has been observed as an important measure by many researchers. Different metrics are under this measure such as demand flexibility, delivery flexibility, and production flexibility.
Overall, standards for measuring the total impact of GSCM practices on sustainability performance could not be found in literature. Moreover, (Zhu, et al., 2008) stressed the need for in depth researches of the relationships between performance measures and green supply chain management elements. Thus, supply chain performance measurement system must integrate more environmental and social performance indicators (Hervani, et al., 2005) and (Beamon, 2005).
4.1.5. Responsiveness: This is a key performance measure of the rate at which the supply chain responds to certain items. This measure includes different metrics such as manufacturing lead time, purchasing lead time, on time delivery, product return lead-time, and total supply chain cycle time.
We were inspired by the work of (Chardine-Baumann, 2011) that studied the impacts of conventional supply chain management (SCM) practices on sustainability performance, but we are interested in green supply chain management (GSCM) practices (Zhu, et al., 2007) and their impacts on overall performance focus on the three aspects of SD.
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Table 2. Sustainability performance measures for green supply chain management . SD perspectives
Measure Environmental cost
Economic perspective Environmental perspective
References (Hervani, et al., 2005), (Zhu, et al., 2007) and (ChardineBaumann, 2011)
Quality
Level of customer complaints Availability of green product warranty Scrap and rework Delivery unreliability
(Beamon, 1999a), (Olugu, et al., 2011) (ChardineBaumann, 2011), (Ageron, et al., 2012) ,and (Pochampally, et al., 2009) (Hervani, et al., 2005), (Azevedo, et al., 2011), (Chardine-Baumann, 2011), and (Ageron, et al., 2012)
Flexibility
Demand flexibility Delivery flexibility Production flexibility
(Beamon, 1999a), (Gunasekaran, et al., 2004), and (Ageron, et al., 2012)
Responsiveness
Manufacturing lead time Purchasing lead time On time delivery Product return lead-time Total supply chain cycle time.
(Beamon, 1999a), (Gunasekaran, et al., 2004), (Azevedo, et al., 2011), (Chardine-Baumann, 2011), and (Ageron, et al., 2012)
Level of process management
Level of process optimization for waste reduction Level of pollution control Level of waste and emissions Amount of Energy consumption
(Beamon, 1999b),and (Hervani, et al., 2005)
Product Features
Level of recycled material in product Availability of eco-labeling Level of usage of design-for-assembly Recycling time Amount energy consumption during the recycling Waste reduction Level of clean technologies Number of new products and process Level of effort to motivate employees Availability of control environmental systems Number of environmental management initiatives Level of effort to raise consumer awareness of sustainability
(Beamon, 1999b), (Hervani, et al., 2005)and (Zhu, et al., 2007) (Hervani, et al., 2005) and (Deif, 2011)
Customer satisfaction
Customer interest in green products Customer satisfaction from green products
Employee development
Level of employee satisfaction Number of special green training programs, Number of conference /fairs related to SD
(Gunasekaran, et al., 2004) , (Zhu, et al., 2007), (Markley & Davis, 2007), and (Pochampally, et al., 2009) (Markley & Davis, 2007), and (Pochampally, et al., 2009)
Traditional supply chain cost
Recycling efficiency
Environmental technology Management commitment
Social perspective
Metric Cost associated with environmental compliance Recycling cost Cost associated with the consumption of energy Disposal costs Cost for purchasing environmentally friendly materials Delivery cost Inventory cost Information sharing cost Ordering cost
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4.2
practices influence both customer satisfaction and employee satisfaction. The different metrics under this measure are the number of special green training programs, and the number of conference and fairs related to sustainable development in which the organization participates.
Environmental perspective
4.2.1. Level of process management: This means the level of work in optimizing the processes and operations at the company to reduce the environmental impact. This is an important measure because as it greatly reduces the immediate impact of the product. This measure includes different metrics such as level of process optimization for waste reduction, level of pollution control, level of waste and emissions, and the amount of energy consumption.
The Different measures of sustainability performance in the field of GSCM are presented in the table (2) which is the result of an effort to systematize the various measures and indicators found in the reviewed literature to integrate them under the contexts of SD.
4.2.2. Product Features: This means the specifications and characteristics of a product. Many researchers have recognized the importance of this key measure. This indicator includes different metrics such as level of recycled material in product, the availability of ecolabeling, and level of usage of design-for-assembly.
5. ANALYTICAL MODEL Based on the literature review, we propose a framework to explore the influence of green practices on economic, environmental, and social performance in supply chain. This is a first step towards providing a comprehensive overview that explains the relationships between GSCM practices and sustainability performance. The purpose is to help managers in the decision making process and to provide control capacity to evaluate the effects of these practices on performance from the economic, environmental and social perspectives in an integrated approach. The model was developed based on a set of anecdotal evidence and empirical literature, and using a methodology similar to that of (Chardine-Baumann, 2011). In this paper GSCM processes are the internal processes (GM), upstream processes (GP, ECD), and downstream processes (GD and RL).
4.2.3. Recycling efficiency: This means the effectiveness level of the recycling processes. This includes various metrics such as recycling time, the amount of energy consumption, and the level of waste during the recycling process. 4.2.4. Environmental technology: This means the development of new technologies including green initiatives and clean programs that reduces the environmental impact such as introducing new advanced technologies for the management of hazardous materials and the use of recycled products, and introducing new products and process. 4.3
In the research design, we have twelve green practices
Social perspective
pv
: (v = 1to12), table (1), and twelve performance measures of a sustainable viewpoint mw : (w = 1, to 12), table (2), according
4.3.1. Management commitment: Managers are responsible for making decisions regarding the selection of suppliers and production operations. Almost all reviewed studies demonstrated the importance of management commitment in the field of supply chain performance measures. This measure includes different metrics such as level of effort to motivate employees and suppliers for adopting green practices, availability of control systems and environmental assessment, number of environmental management initiatives, and level of effort to raise consumer awareness about the importance of sustainability.
to the proposed framework. We define the research variables according to the following notations: D(
pv ) is the level of implementation of green practice pv
D ( m w ) is the level of implementation of performance measure
mw
( x wj ) Eco is the metric j under the economic measure
(mw ) Eco
: j=1 to N ( x w ) Eco
( x wj ) Env is the metric j under the environmental measure
4.3.2. Customer satisfaction: This means the good opinions of customers about green supply chain and green products. It is considered as a vital factor in green supply chain performance since the objective of all companies is to sell their products to consumers. According to (Zhu, et al., 2007) supply chain performance measurement must be constructed around the customer satisfaction. The various metrics under this indicator are customer interest in green products, and customer satisfaction from green products.
(mw ) Env
: j=1 to N ( x w ) Env
( x wj ) Soc is the metric j under the social measure
(mw ) Soc
: j=1 to N ( x w ) Soc
According to a qualitative scale, the impact of green practice
pv
on metric of economic performance ( x wj ) Eco is:
+ 1 if the green practice pv has a positive impact on economic metric ( xwj ) Eco I ( pv , ( xwj ) Eco ) = − 1 if the green practice pv has a negative impact on economic metric ( xwj ) Eco 0 if the green practicepv has no impact on economic metric ( xwj ) Eco
4.3.3. Employee development: This is a vital indicator that measures the total involvement of employees in GSCM practices. According to (Markley & Davis, 2007) green
I ( pv , ( xwj ) Eco ) ∈ {− 1;0;+1} (1) 76
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We can calculate I ( p v , ( x wj ) Env ) and I ( p v , ( x wj ) Soc ) using the
The impact of green practice pv on social metric ( x wj ) Soc
same way. The impact of green practice pv on environmental metric ( x wj ) Env is:
is: + 1 if the green practice pv has a positive impact on social metric ( xwj ) Soc I ( pv , ( xwj ) Eco ) = − 1 if the green practice pv has a negative impact on social metric ( xwj ) Soc 0 if the green practicepv has no impact on social metric ( xwj ) Soc
+ 1 if the green practice pv has a positive impact on environmental metric ( xwj ) Env I ( pv , ( xwj ) Eco ) = − 1 if the green practice pv has a negative impact on environmental metric ( xwj ) Env 0 if the green practicepv has no impact on environmental metric ( xwj ) Env
I ( pv , ( xwj )Soc ) ∈ {− 1;0;+1} (3)
I ( pv , ( x wj ) Env ) ∈ {− 1;0;+1} (2)
GP
G S C M
Green Practice p v
GM
Eco
Sustainability performance
ECD
?
GD
Performance measure m
Env
w
Soc
RL
۲ሺ ܟܕሻ
۲ሺ ܞܘሻ
GSCM practices
Sustainability performance
Fig. 2. Model for Evaluating the Sustainability Performance for GSCM
The impact of green practice
mw
and then we calculate the weighted impact of each practice on economic, environmental, and social performance:
pv on performance measure
is the average impact on all metrics: P( Eco) w = whighted Ipv ( mw ) Eco = Ipv (mw ) Eco × D( pv ) × D( mw ) (7)
For example, the impact of green practice ୴ on economic performance measure
Ipv (m w ) Eco = The
impact
(mw ) Eco
∑ I ( p , (x v
wj
) Eco ) (4)
P ( Soc ) w = whighted Ipv ( mw ) Soc = Ipv ( mw ) Soc × D ( pv ) × D ( mw ) (9)
j =1
green
performance measure
P ( Env) w = whighted Ipv (mw ) Env = Ipv (mw ) Env × D( pv ) × D(mw ) (8)
N ( xw ) Eco
1 N ( x w ) Eco of
, as shown in
practice
(mw ) Env
pv on
We assess the overall impact of green practice environmental
pv on
economic performance, as in 5
, as shown in
IEco ( p v ) = ∑ P ( Eco) w
(10)
w =1
Ip v (m w ) Env =
1 N ( x w ) Env
N ( xw ) Env
∑ I(p
The impact of green practice measure
(mw ) Soc
Ipv (mw ) Soc =
v
, ( x wj ) Env ) (5)
We can calculate IEnv ( p v ) and ISoc ( p v ) using the same way.
j =1
pv
9
IEnv ( p v ) = ∑ P ( Env ) w
on social performance
, as shown in
1 N ( x w ) Soc
12
ISoc ( p v ) =
N ( xw ) Soc
∑ I ( pv , ( xwj ) Soc ) (6) and performance measure m w
w
(12)
The impact of each green practice on sustainability performance is represented by a triplet I ( p v ) = {IEco( p v ), IEnv ( pv ), ISoc( pv )} that represents the economic, environmental and social performance.
j =1
pv
∑ P(Soc) w =10
We take into account the weighting of the relationship between green practice
(11)
w= 6
, 77
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Hervani, A.A., Helms M.M., & Sarkis, J., 2005. Performance measurement for green supply chain management. Benchmarking. An International Journa, 12(4), pp. 330353. Klassen, R. & Whybark, D., 1999. The impact of environmental technologies on manufacturing performance. Academy of Management Journal, 42(6), pp. 615-599. Linton, J., Klassen, R. & Jayaraman, V., 2007. Sustainable supply chains: an introduction. Journal of Operations Management, 25(1), pp. 1075-82. Markley, M. & Davis, L., 2007. Exploring future competitive advantage through sustainable supply chains. International Journal of Physical Distribution & Logistics Management, 39(9), pp. 763-74. Min, H. & Galle, W., 1997. Green Purchasing Strategies: Trends and Implications. International Journal of Purchasing and Materials Management, Volume module4, pp. 10-17. Neely, A., Gregory, M. & Platts, K., 2005. Performance measurement system design: a literature review and research agenda. International Journal of Operations and Production Management, 25(12), pp. 1228-63. Olugu, E., Wong, K. & Shaharoun, A., 2011. Development of key performance measures for the automobile green supply chain. Resources, Conservation and Recycling, 55(6), pp. 657-579. Pal, U., 2002. Identifying the Path to Successful Green Manufacturing. Journal of Minerals, Metals and Materials Society, 54(5), pp. 25-25. Pochampally, K., Gupta, S. & Govindan, K., 2009. Metrics for performance measurement of a reverse/closed-loop supply chain. International Journal of Business Performance and Supply Chain Modelling, 1(1), pp. 8-32. Quazi, H., 2001. Sustainable development: integrating environmental issues into strategic planning. Industrial Management & Data Systems, 101 (2), pp. 64-70. Rao, P. & Holt, D., 2005. Do green supply chains lead to competitiveness and economic performance. International Journal of Operations and Production Management, 25(9), pp. 898-916. Sabri, E. H. & Beamon, B. M., 2000. A Multi-Objective Approach to Simultaneous Strategic and Operational Planning in Supply Chain Design. Omega, 28(5), pp. 2581-598. Salam, M., 2009. Corporate social responsibility in purchasing and supply chain. Journal of Business Ethics, 85(2), pp. 335-70. Srivastava, K., 2007. Green supply-chain management: a state-of-the-art literature review. International Journal of Management Reviews, 9(1), pp. 53-80. Zhu, Q., Sarkis, J., Cordeiro, J. & Lai, K., 2008. Firm-level correlates of emergent green supply chain management practices in the Chinese context. Omega, 36 (4), pp. 57791. Zhu, Q., Sarkis, J. & Lai, K., 2007. Green supply chain management: pressures, practices and performance within the Chinese automobile industry. Journal of Cleaner Production, 15(11-12), pp. 1041-1052.
The proposed model can be used to evaluate and compare the impact of GSCM practices on (economic, environmental and social) performance, as shown in figure (2). 6. CONCLUSIONS This paper develops a new model for evaluating economic, environmental and social performance to achieve the benefits of green supply chain management. The purpose is to provide control capacity to evaluate the effects of these practices on overall performance from the three perspectives of sustainable development in an integrated approach. We conclude the study by suggesting perspectives for future research. It is also important to know whether certain green practices are more important than others with respect to overall sustainability performance and to study the mathematical and logical relationships between different indicators and measures. It would also be useful to focus on the social dimension of sustainable development in performance measurement of green supply chain management. REFERENCES Ageron, B., Gunasekaran, A. & Spalanzani, A., 2012. Sustainable supply management: An empirical study. Int. J. Production Economics, 140(1), p. 168–182. Azevedo, S., Carvalho, H. & Cruz Machado, V., 2011. The influence of green practices on supply chain performance: A case study. Transportation Research Part E, 47(6), p. 850–871. Beamon, B.M., 1999a. Designing the green supply chain. Logistics Information Management, 12(4), pp. 332-342. Beamon, B.M., 1999b. Measuring supply chain performance. International Journal of Operations & Production Management, 19(3), pp. 275-292. Beamon, B.M., 2005. Environmental and sustainability ethics in supply chain management. Science and Engineering Ethics, Volume 11, p. 221–234. Bititci, U., Turner, T. & Begemann, C., 2000. Dynamics of performance measurement systems. International Journal of Operations & Production Management, 20(6), pp. 692704. Charan P., Shankar R., & Baisya, R., 2008. Analysis of interactions among the variables of supply chain performance measurement system implementation. Business Process Management Journal, 14(4), pp. 512529. Chardine-Baumann, E., 2011. Modèles d’évaluation des performances économique, environnementale et sociale dans les chaînes logistiques: INSA de Lyon. Deif, A. M., 2011. A system model for green manufacturing. Journal of Cleaner Production, 19(14), pp. 1553-1559. Gunasekaran, A., Patel, C. & McGaughey, R., 2004. A framework for supply chain performance measurement. International Journal of Production Economics, 87(3), pp. 333-347. Harrington, H., 1991. Business process improvement: the breakthrough strategy for total quality, productivity, and competitiveness. New York: McGraw-Hill. 78
Sustainability Performance Measurement for Green Supply Chain Management NADINE KAFA, YASMINA HANI, ABEDERRAHMAN EL MHAMEDI Equipe MGSI/ LISMMA – Université de Paris8 140, rue de la nouvelle France, 93100 Montreuil, France (e-mails: [email protected], [email protected], [email protected]) Abstract: This article focuses on sustainability performance in supply chain management (SCM) and adding the “Green” concept to it so as to emphasize the importance of environmental issues and the need of eco-friendly systems. The purpose of this study is to propose a model for evaluating the sustainability performance of green supply chain management (GSCM). This article seeks to develop key performance measures for GSCM incorporating considerations of sustainable development (SD).We present a literature review on green supply chain management and sustainability performance measurement. Key indicators for the green supply chain performance measurement under the context of sustainable development are derived from a literature. We propose an analytical model to explore the influence of green practices on the sustainability performance in supply chain. This is a first step towards providing a comprehensive overview that explains the relationship between GSCM and sustainability performance. We conclude by suggesting perspectives for future research. Keywords: Green supply chain management, sustainability performance measures, green practices, performance assessment. This article is divided into six main parts. The second section presents a review of the literature on GSCM and the main green practices of supply chain management. In the next section, a brief review of the literature on green supply chain management performance measurement is presented. In the fourth section, we developed key performance measures and indicators for GSCM. In the fifth part, an analytical model was designed to assess the impacts of GSCM practices on performance in the context of sustainable development. Finally, the paper ends with conclusions and directions for future research
1. INTRODUCTION The subject of green supply chain management (GSCM) attracts a growing interest in academic and professional literature since 1990. The GSCM is defined as the achievement of economic, environmental, and social goals in the systemic coordination of key inter-organizational business processes to improve performance in the long-term for the organization and its partners in the supply chain (Ageron, et al., 2012) .However, the literature in the field of GSCM is in the early stages of development, with related studies dealing particularly with theoretical consideration and anecdotal indication (Quazi, 2001). A numbers of frameworks for performance measurement systems (PMS) in the supply chain have been developed since 1980s. The literature emphasizes the importance of performance measurement at different levels of decision making and control (Gunasekaran, et al., 2004). However, there is a lack of studies linking performance measurements and green supply chain management (Hervani, et al., 2005).
2. GREEN SUPPLY CHAIN MANAGEMENT Different definitions of green supply chain (GSC) exist in the literature. Some studies defined the GSC as closed-loop supply (Beamon, 1999a). Some have called it as a sustainable supply chain (SSC) (Ageron, et al., 2012) and (Linton, et al., 2007), environmental supply chain, and ethical supply chain (Beamon, 2005). It has also been described as a socially responsible supply chain (Salam, 2009). Figure 1 shows the material flow involved in a green supply chain (Olugu, et al., 2011).
Typical performance measurement systems models were based on financial performance measures which later were considered insufficient. Since non-financial performance measures have received much attention (Beamon, 1999b). The results of (Azevedo, et al., 2011) suggest that environmental performance indicators are increasingly important, and develop sustainable business practices.
978-3-902823-50-2/2013 © IFAC
GSCM is a concerted effort across the enterprise and is more than simply implementing some ecological practices, but rather a coherent approach for improving environmental and organizational performance of all levels of management (Zhu, et al., 2007).
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(Srivastava, 2007) defined GSCM as integrating environmental considerations into SCM including product and service design, procurement, manufacturing processes, distribution, and end-of-life management of the product to achieve sustainable competitive advantage. Manufacturer
Distributor
2.2 Eco-Design (ECD) It is about taking into account systematically issues related to environmental safety and health over the product life cycle with a potential to be reused or recycled at end-of-life (Linton, et al., 2007). Eco-design process includes the following green practices:
Customer
• Design of products to reduce material/energy consumption during production and product use.
Supplier Recycler
Collector
• Design of products for (3Rs) reuse, recycle, and recovery of material and component parts.
Fig. 1.Green supply chain (Olugu, et al., 2011)
• Design of products to avoid the use of hazardous materials.
The different processes and activities are encompassed in GSCM have been discussed by (Hervani, et al., 2005). GSCM can therefore be defined by the following equation:
2.3 Green Manufacturing (GM)
Green supply Chain management (GSCM) = Green Purchasing (Min & Galle, 1997) + Eco-Design (Linton, et al., 2007) + Green Manufacturing (Deif, 2011) + Green Distribution (Rao & Holt, 2005) + Reverse Logistic (Pochampally, et al., 2009).
Green manufacturing is a combined set of harmless production processes which reduce resource consumption and generate a little or no waste and pollution (Deif, 2011) to provide pollution free environment to consumers, employees and community. (Pal, 2002) stated that “green manufacturing is not an option but a necessity for our well-being and survival in today’s competitive environment”.
The different drivers of companies to adopt GSCM initiatives are government regulations, stakeholder pressures, economic interests, and ecological interests of firms (Min & Galle, 1997), (Hervani, et al., 2005), and (Zhu, et al., 2007). Many companies have adopted "green" initiatives and implemented GSCM practices to meet their social responsibility (Salam, 2009), examples like:
GM aims to reduce the environmental burden and can lead to lower raw material costs, production efficiency gains, reduced environmental expenses, and improved public image by using appropriate materials and innovative environmental technologies (Deif, 2011).
The furniture manufacturer IKEA seeks a sustainable mode of transport that reduces the ecological effects. L'Oreal, HP, IBM, GE, and Dell have all taken the term "green" as an important value for their business and adopted of new energysaving technologies in order to improve good public image or "green image". BMW, Pepsi-Cola, and Kodak have implemented reverse logistic process for economic benefits.
Green manufacturing practices are presented: The 3Rs in green manufacturing process.
•
The use of advanced environmental technologies.
2.4 Green Distribution (GD) Green distribution process is defined as the integration of environmental issues into packaging, transportation and logistics activities (Rao & Holt, 2005). Thus, green distribution practices are presented:
2.1 Green Purchasing (GP) Green purchasing is defined as an environmentally-conscious purchasing activity that ensures the purchased materials and products meet the environmental goals set by the purchasing company (Min & Galle, 1997). GP managers monitor the issue of sustainability in the purchasing process (Min & Galle, 1997) and (Salam, 2009), and also traditional purchasing criteria such as cost, quality and delivery (Zhu, et al., 2008).
• Green packaging: the use of environmentally friendly materials and recycled packaging with improved packaging designs and techniques help companies to reduce waste and costs. • Green transportation and logistics: the consolidation of orders and route optimization are energy saving ways and methods to reduce CO2 emissions.
Green purchasing process includes the following green practices: • Selection of suppliers based on environmental criteria favoring those which are certified according to ISO 14000. •
•
2.5 Reverse logistics (RL) Reverse logistics is the process of retrieving used product from the point of consumption to the point of origin for possible reusing, recycling, and remanufacturing (Rao & Holt, 2005), (Pochampally, et al., 2009), and (Azevedo, et al., 2011). It represents the transformation of used products into reusable products.
Environmental collaboration with suppliers.
• The 3Rs (reduce, reuse, recycle) in purchasing process.
Reverse logistics practices include collection, combined, inspection, selection, cleaning, sorting, recycling, recovery, 72
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• Remanufacturing that includes the treatment of the product such as the repair, reuse, reconditioning, disassembly, reassembly, repacking, and recycling.
redistribution, and disposal. RL practices found in the literature are presented: • Collection: used products and/or used packaging are selected, collected and transported to facilities for remanufacturing.
All GSCM practices and their benefits are shown in table (1).
Table1. GSCM practices
Green manufacturing Reverse logistic
Green distribution
GSCM
Eco-design
Green purchasing
Green Practices
Benefits
Selection of ecosuppliers Environmental collaboration with suppliers. The 3Rs Design of products to : Reduce material/energy consumption The 3Rs Avoid use of hazardous materials The 3Rs Advanced environmental technologies
Green packaging Green transportation
Collection Remanufacturing
References
Reduce the environmental cost Good "green" image
(Min & Galle, 1997), (Zhu, et al., 2008),and (Salam, 2009)
Improved the reuse, recycling and remanufacturing opportunities Access to green market Higher eco-efficiency
(Zhu, et al., 2007) , (Linton, et al., 2007), and (Ageron, et al., 2012)
Improved sustainability performance by reducing waste and therefore costs
(Pal, 2002) and (Deif, 2011)
Reduce packaging costs Reduce fuel consumption Less noise, pollution, and traffic Better relationship with customer and public Reduction of environmental burdens on the final disposal Reduction of environmental costs Reuse of valuable components of an end-oflife product
(Rao & Holt, 2005) and (Ageron, et al., 2012)
(Rao & Holt, 2005), (Pochampally, et al., 2009) , (Azevedo, et al., 2011), and (Ageron, et al., 2012)
According to these researchers the importance of studying the performance measurement has increased in recent years. However, the development of the performance measures in supply chain is a difficult problem and there is very little research in performance measurement in the current strategies for green supply chain management (Hervani, et al., 2005).
3. GREEN SUPPLY CHAIN PERFORMANCE MEASUREMENT This section presents a literature review concerning green supply chain performance measurement. For (Harrington, 1991) “If you cannot measure it, you cannot control it. If you cannot control it, you cannot manage it. If you cannot manage it, you cannot improve it”.
In fact, the absence of performance measurement has been recognized as one of the major problems in supply chain management (Charan P, 2008).
It is an established fact that manufacturing companies have recognized the importance of supply chain management to enhance their competitiveness and most companies have realized that to move towards efficient and effective supply chain, its performance should be evaluated (Gunasekaran, et al., 2004).
(Gunasekaran, et al., 2004) highlighted the need for supply chain performance measurement under following reasons: the lack of the approach that balance between financial and nonfinancial performance measures, and the lack of understanding on deciding on the number of metrics to be used. 73
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4. SUSTAINABILITY PERFORMANCE MEASURES FOR GSCM
There is a real need to focus on measuring performance in supply chain in which the company is a partner (Charan P, 2008). According to the nature of the supply chain, any factor which affects any specific item in the chain will be extended to the whole of the chain (Sabri & Beamon, 2000) . Thus, in green supply chain management, the internal processes have to be evaluated, coupled with the external processes (Olugu, et al., 2011).
Based on different studies in the literature, we developed key performance measures and indicators for GSCM that are grouped under the context of sustainable development. 4.1
Economic perspective
4.1.1. Environmental cost: This is the total cost of going green incurred by the supply chain in ensuring that its processes are environmentally and sustainable. This measure includes different metrics such as cost associated with environmental compliance, recycling cost, cost associated with the consumption of energy, disposal costs, and cost for purchasing environmentally friendly materials. (Klassen & Whybark, 1999) have highlighted that the investment model of a company has a large influence on the environmental performance. The environmental cost has been considered by many researchers as one of the major measures for an effective GSCM.
The reviewed studies have defined the performance measurement system in different ways. (Neely, et al., 2005) defined it as a balanced and dynamic system used in quantifying the efficiency and/or effectiveness of a particular activity to support the decision-making process by collection, compilation and analyze the information. For (Bititci, et al., 2000) performance measurement is the reporting process that provides feedback to employees about the results of actions and activities. Many researchers looked at the GSCM as a force to enhance the competitiveness and to meet the environmental regulations and pressure from stakeholders (Hervani, et al., 2005). According to (Chardine-Baumann, 2011) performance indicators in supply chain management should be defined to control the effort of companies in achieving sustainable development at all levels. Performance measurement has the advantages of stabilizing the GSCM process and identifying opportunities for improvement within the system (Bond, 1999) cited by (Olugu, et al., 2011). It is important to evaluate the overall performance of the entire chain for an effective green supply chain management (Beamon, 1999a).
4.1.2. Traditional supply chain cost: This is the habitual cost produced as a result of a usual operation in the supply chain. It has been always considered as a key measure of the supply chain performance. It includes all costs accruable in ensuring that products get to the end customer. The traditional supply chain cost is influenced in one way or another by green practices of supply chain management. For example, it is supposed that the cost of delivery and the cost of inventory will be reduced as a result of GSCM.
Many frameworks in the field of supply chain performance measurement have been developed over the last two decades. The existing approaches to assess sustainability performance in the supply chain or in the organization are grouped into four categories: (i) the use of the Global Reporting Initiative (GRI 2007); (ii) the use of the International Organization for Standardization (ISO) like ISO 14031 (ISO 2004) ;(iii) the use of performance measurement system like Green SCOR (SCC 2008), and sustainability balanced Scorecard (SBSC); (iv) The use of others approach such as decision-making tool.
4.1.3. Quality: This measures the standard of the product. According to so many studies, this dominate measure has a very significant impact on supply chain performance. This measure involves diverse metrics such as the level of customer complaints, the availability of product warranty, the percentage decrease in scrap and rework, and the percentage decrease in delivery unreliability. 4.1.4. Flexibility: This means the ability of supply chain for adapting to suit the different scenarios that could occur due to changes in normal processes of the supply chain. It has been observed as an important measure by many researchers. Different metrics are under this measure such as demand flexibility, delivery flexibility, and production flexibility.
Overall, standards for measuring the total impact of GSCM practices on sustainability performance could not be found in literature. Moreover, (Zhu, et al., 2008) stressed the need for in depth researches of the relationships between performance measures and green supply chain management elements. Thus, supply chain performance measurement system must integrate more environmental and social performance indicators (Hervani, et al., 2005) and (Beamon, 2005).
4.1.5. Responsiveness: This is a key performance measure of the rate at which the supply chain responds to certain items. This measure includes different metrics such as manufacturing lead time, purchasing lead time, on time delivery, product return lead-time, and total supply chain cycle time.
We were inspired by the work of (Chardine-Baumann, 2011) that studied the impacts of conventional supply chain management (SCM) practices on sustainability performance, but we are interested in green supply chain management (GSCM) practices (Zhu, et al., 2007) and their impacts on overall performance focus on the three aspects of SD.
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Table 2. Sustainability performance measures for green supply chain management . SD perspectives
Measure Environmental cost
Economic perspective Environmental perspective
References (Hervani, et al., 2005), (Zhu, et al., 2007) and (ChardineBaumann, 2011)
Quality
Level of customer complaints Availability of green product warranty Scrap and rework Delivery unreliability
(Beamon, 1999a), (Olugu, et al., 2011) (ChardineBaumann, 2011), (Ageron, et al., 2012) ,and (Pochampally, et al., 2009) (Hervani, et al., 2005), (Azevedo, et al., 2011), (Chardine-Baumann, 2011), and (Ageron, et al., 2012)
Flexibility
Demand flexibility Delivery flexibility Production flexibility
(Beamon, 1999a), (Gunasekaran, et al., 2004), and (Ageron, et al., 2012)
Responsiveness
Manufacturing lead time Purchasing lead time On time delivery Product return lead-time Total supply chain cycle time.
(Beamon, 1999a), (Gunasekaran, et al., 2004), (Azevedo, et al., 2011), (Chardine-Baumann, 2011), and (Ageron, et al., 2012)
Level of process management
Level of process optimization for waste reduction Level of pollution control Level of waste and emissions Amount of Energy consumption
(Beamon, 1999b),and (Hervani, et al., 2005)
Product Features
Level of recycled material in product Availability of eco-labeling Level of usage of design-for-assembly Recycling time Amount energy consumption during the recycling Waste reduction Level of clean technologies Number of new products and process Level of effort to motivate employees Availability of control environmental systems Number of environmental management initiatives Level of effort to raise consumer awareness of sustainability
(Beamon, 1999b), (Hervani, et al., 2005)and (Zhu, et al., 2007) (Hervani, et al., 2005) and (Deif, 2011)
Customer satisfaction
Customer interest in green products Customer satisfaction from green products
Employee development
Level of employee satisfaction Number of special green training programs, Number of conference /fairs related to SD
(Gunasekaran, et al., 2004) , (Zhu, et al., 2007), (Markley & Davis, 2007), and (Pochampally, et al., 2009) (Markley & Davis, 2007), and (Pochampally, et al., 2009)
Traditional supply chain cost
Recycling efficiency
Environmental technology Management commitment
Social perspective
Metric Cost associated with environmental compliance Recycling cost Cost associated with the consumption of energy Disposal costs Cost for purchasing environmentally friendly materials Delivery cost Inventory cost Information sharing cost Ordering cost
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4.2
practices influence both customer satisfaction and employee satisfaction. The different metrics under this measure are the number of special green training programs, and the number of conference and fairs related to sustainable development in which the organization participates.
Environmental perspective
4.2.1. Level of process management: This means the level of work in optimizing the processes and operations at the company to reduce the environmental impact. This is an important measure because as it greatly reduces the immediate impact of the product. This measure includes different metrics such as level of process optimization for waste reduction, level of pollution control, level of waste and emissions, and the amount of energy consumption.
The Different measures of sustainability performance in the field of GSCM are presented in the table (2) which is the result of an effort to systematize the various measures and indicators found in the reviewed literature to integrate them under the contexts of SD.
4.2.2. Product Features: This means the specifications and characteristics of a product. Many researchers have recognized the importance of this key measure. This indicator includes different metrics such as level of recycled material in product, the availability of ecolabeling, and level of usage of design-for-assembly.
5. ANALYTICAL MODEL Based on the literature review, we propose a framework to explore the influence of green practices on economic, environmental, and social performance in supply chain. This is a first step towards providing a comprehensive overview that explains the relationships between GSCM practices and sustainability performance. The purpose is to help managers in the decision making process and to provide control capacity to evaluate the effects of these practices on performance from the economic, environmental and social perspectives in an integrated approach. The model was developed based on a set of anecdotal evidence and empirical literature, and using a methodology similar to that of (Chardine-Baumann, 2011). In this paper GSCM processes are the internal processes (GM), upstream processes (GP, ECD), and downstream processes (GD and RL).
4.2.3. Recycling efficiency: This means the effectiveness level of the recycling processes. This includes various metrics such as recycling time, the amount of energy consumption, and the level of waste during the recycling process. 4.2.4. Environmental technology: This means the development of new technologies including green initiatives and clean programs that reduces the environmental impact such as introducing new advanced technologies for the management of hazardous materials and the use of recycled products, and introducing new products and process. 4.3
In the research design, we have twelve green practices
Social perspective
pv
: (v = 1to12), table (1), and twelve performance measures of a sustainable viewpoint mw : (w = 1, to 12), table (2), according
4.3.1. Management commitment: Managers are responsible for making decisions regarding the selection of suppliers and production operations. Almost all reviewed studies demonstrated the importance of management commitment in the field of supply chain performance measures. This measure includes different metrics such as level of effort to motivate employees and suppliers for adopting green practices, availability of control systems and environmental assessment, number of environmental management initiatives, and level of effort to raise consumer awareness about the importance of sustainability.
to the proposed framework. We define the research variables according to the following notations: D(
pv ) is the level of implementation of green practice pv
D ( m w ) is the level of implementation of performance measure
mw
( x wj ) Eco is the metric j under the economic measure
(mw ) Eco
: j=1 to N ( x w ) Eco
( x wj ) Env is the metric j under the environmental measure
4.3.2. Customer satisfaction: This means the good opinions of customers about green supply chain and green products. It is considered as a vital factor in green supply chain performance since the objective of all companies is to sell their products to consumers. According to (Zhu, et al., 2007) supply chain performance measurement must be constructed around the customer satisfaction. The various metrics under this indicator are customer interest in green products, and customer satisfaction from green products.
(mw ) Env
: j=1 to N ( x w ) Env
( x wj ) Soc is the metric j under the social measure
(mw ) Soc
: j=1 to N ( x w ) Soc
According to a qualitative scale, the impact of green practice
pv
on metric of economic performance ( x wj ) Eco is:
+ 1 if the green practice pv has a positive impact on economic metric ( xwj ) Eco I ( pv , ( xwj ) Eco ) = − 1 if the green practice pv has a negative impact on economic metric ( xwj ) Eco 0 if the green practicepv has no impact on economic metric ( xwj ) Eco
4.3.3. Employee development: This is a vital indicator that measures the total involvement of employees in GSCM practices. According to (Markley & Davis, 2007) green
I ( pv , ( xwj ) Eco ) ∈ {− 1;0;+1} (1) 76
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We can calculate I ( p v , ( x wj ) Env ) and I ( p v , ( x wj ) Soc ) using the
The impact of green practice pv on social metric ( x wj ) Soc
same way. The impact of green practice pv on environmental metric ( x wj ) Env is:
is: + 1 if the green practice pv has a positive impact on social metric ( xwj ) Soc I ( pv , ( xwj ) Eco ) = − 1 if the green practice pv has a negative impact on social metric ( xwj ) Soc 0 if the green practicepv has no impact on social metric ( xwj ) Soc
+ 1 if the green practice pv has a positive impact on environmental metric ( xwj ) Env I ( pv , ( xwj ) Eco ) = − 1 if the green practice pv has a negative impact on environmental metric ( xwj ) Env 0 if the green practicepv has no impact on environmental metric ( xwj ) Env
I ( pv , ( xwj )Soc ) ∈ {− 1;0;+1} (3)
I ( pv , ( x wj ) Env ) ∈ {− 1;0;+1} (2)
GP
G S C M
Green Practice p v
GM
Eco
Sustainability performance
ECD
?
GD
Performance measure m
Env
w
Soc
RL
۲ሺ ܟܕሻ
۲ሺ ܞܘሻ
GSCM practices
Sustainability performance
Fig. 2. Model for Evaluating the Sustainability Performance for GSCM
The impact of green practice
mw
and then we calculate the weighted impact of each practice on economic, environmental, and social performance:
pv on performance measure
is the average impact on all metrics: P( Eco) w = whighted Ipv ( mw ) Eco = Ipv (mw ) Eco × D( pv ) × D( mw ) (7)
For example, the impact of green practice ୴ on economic performance measure
Ipv (m w ) Eco = The
impact
(mw ) Eco
∑ I ( p , (x v
wj
) Eco ) (4)
P ( Soc ) w = whighted Ipv ( mw ) Soc = Ipv ( mw ) Soc × D ( pv ) × D ( mw ) (9)
j =1
green
performance measure
P ( Env) w = whighted Ipv (mw ) Env = Ipv (mw ) Env × D( pv ) × D(mw ) (8)
N ( xw ) Eco
1 N ( x w ) Eco of
, as shown in
practice
(mw ) Env
pv on
We assess the overall impact of green practice environmental
pv on
economic performance, as in 5
, as shown in
IEco ( p v ) = ∑ P ( Eco) w
(10)
w =1
Ip v (m w ) Env =
1 N ( x w ) Env
N ( xw ) Env
∑ I(p
The impact of green practice measure
(mw ) Soc
Ipv (mw ) Soc =
v
, ( x wj ) Env ) (5)
We can calculate IEnv ( p v ) and ISoc ( p v ) using the same way.
j =1
pv
9
IEnv ( p v ) = ∑ P ( Env ) w
on social performance
, as shown in
1 N ( x w ) Soc
12
ISoc ( p v ) =
N ( xw ) Soc
∑ I ( pv , ( xwj ) Soc ) (6) and performance measure m w
w
(12)
The impact of each green practice on sustainability performance is represented by a triplet I ( p v ) = {IEco( p v ), IEnv ( pv ), ISoc( pv )} that represents the economic, environmental and social performance.
j =1
pv
∑ P(Soc) w =10
We take into account the weighting of the relationship between green practice
(11)
w= 6
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The proposed model can be used to evaluate and compare the impact of GSCM practices on (economic, environmental and social) performance, as shown in figure (2). 6. CONCLUSIONS This paper develops a new model for evaluating economic, environmental and social performance to achieve the benefits of green supply chain management. The purpose is to provide control capacity to evaluate the effects of these practices on overall performance from the three perspectives of sustainable development in an integrated approach. We conclude the study by suggesting perspectives for future research. It is also important to know whether certain green practices are more important than others with respect to overall sustainability performance and to study the mathematical and logical relationships between different indicators and measures. It would also be useful to focus on the social dimension of sustainable development in performance measurement of green supply chain management. REFERENCES Ageron, B., Gunasekaran, A. & Spalanzani, A., 2012. Sustainable supply management: An empirical study. Int. J. Production Economics, 140(1), p. 168–182. Azevedo, S., Carvalho, H. & Cruz Machado, V., 2011. The influence of green practices on supply chain performance: A case study. Transportation Research Part E, 47(6), p. 850–871. Beamon, B.M., 1999a. Designing the green supply chain. Logistics Information Management, 12(4), pp. 332-342. Beamon, B.M., 1999b. Measuring supply chain performance. International Journal of Operations & Production Management, 19(3), pp. 275-292. Beamon, B.M., 2005. Environmental and sustainability ethics in supply chain management. Science and Engineering Ethics, Volume 11, p. 221–234. Bititci, U., Turner, T. & Begemann, C., 2000. Dynamics of performance measurement systems. International Journal of Operations & Production Management, 20(6), pp. 692704. Charan P., Shankar R., & Baisya, R., 2008. Analysis of interactions among the variables of supply chain performance measurement system implementation. Business Process Management Journal, 14(4), pp. 512529. Chardine-Baumann, E., 2011. Modèles d’évaluation des performances économique, environnementale et sociale dans les chaînes logistiques: INSA de Lyon. Deif, A. M., 2011. A system model for green manufacturing. Journal of Cleaner Production, 19(14), pp. 1553-1559. Gunasekaran, A., Patel, C. & McGaughey, R., 2004. A framework for supply chain performance measurement. International Journal of Production Economics, 87(3), pp. 333-347. Harrington, H., 1991. Business process improvement: the breakthrough strategy for total quality, productivity, and competitiveness. New York: McGraw-Hill. 78