Sustainable value creation in manufacturing at product and process levels: Metrics-based evaluation

Abstract

Conventionally, corporations focused on economic value creation for shareholders. However, sustainable business practices require considering sustainable value added to all stakeholders. The overall sustainable value added can be evaluated by measuring economic, environmental, and societal values created for all the stakeholders. While economic value assessment methods are commonly used and well established, there are challenges in defining and establishing methods for environmental and societal value assessment. Manufacturing is one of the key sectors for achieving economic growth. Applying the sustainable value framework in manufacturing applications requires a total product life-cycle approach that considers the four product life-cycle stages (pre-manufacturing, manufacturing, use, and post-use) and the 6R (Reduce, Reuse, Recycle, Recover, Redesign, and Remanufacture) approach to create sustainable value for all stakeholders through sustainable manufacturing. In order to evaluate how effectively sustainable manufacturing creates sustainable value, there is a need for a structured approach for sustainability assessment. This chapter focuses on developing a sustainability performance evaluation methodology for manufacturing through the introduction of sustainability metrics that quantify and measure sustainable value in a comprehensive manner incorporating numerous factors related to creating sustainable values in sustainable manufacturing activities. The methodology defines sustainability metrics that cover economic, environmental, and social value added for products and manufacturing processes. The methodology also presents the process of normalizing, weighting, and aggregating the measurements for the sustainability metrics to evaluate the overall product sustainability index (ProdSI) and process sustainability index (ProcSI). The application of the ProdSI and ProcSI methodologies is demonstrated by a case study to evaluate the sustainability performance of an automotive component.