An environmental and economic performance measure for industrial supply networks

Abstract

This paper aims at establishing a quantitative measure for economic and environmental Performance of industrial supply networks. To the best of the author's knowledge, this measure is the only one that considers aleatory and epistemic uncertainties in its environmental performance evaluation. The measure is built upon economic and environmental performance evaluation models. These models address identified shortcomings in the literature such as incomplete and inaccurate calculation of environmental impacts, as well as the disregard for aleatory and epistemic uncertainties in the input data. This measure provides an approach to quantify the environmental and economic performances, and accordingly the sustainability performance, of the supply network. Moreover, as this measure is not specified for an industrial sector, it can be employed for initializing a dialogue between members of supply networks about their sustainability performance. This can lead into an establishment of sustainability databases that are useful for both the network members and researchers. The measure does not account for the social component of sustainability. This is due to the lack of information about social aspects of organizations and hence their supply network. Moreover, as organizations have no strategies in place to collect information relevant to the supply chain, data for the demonstration of the method is not accessible to the researcher. Thus, the implementation of the model in a real world scenario is left for future studies upon the completion of data collections. The measure is based on ratio indicators that facilitate the comparison between current and future performances. This facilitates creating a set of sustainability targets necessary for establishing a sustainable management system within an organization. Moreover, the measure provides information to the process manager about the relationship between environmental safety decisions and the process's profit, when the process is a part of a supply network. Furthermore, this measure provides a common language for the companies to extend their individual sustainability targets toward the whole supply network.