Screening of sustainable supply chain performance evaluation indicators based on the ill-conditioned index cycle method

Abstract

The establishment of an evaluation indicator system that can accurately assess the sustainability of a supply chain while further enhancing its performance is vital and relevant. Based on the connotation of sustainable supply chains and triple bottom line theory, indicators are initially proposed from economic, environmental, and social dimensions. To increase the explanatory power of the indicator system and decrease information redundancy, the coefficient of variation is applied to identify the indicators with weak interpretation intensity, the ill-conditioned index cycle method is utilized to filter out indicators with redundant information, and data on 100 Chinese listed companies from 2019 to 2021 are used as samples. A performance evaluation indicator system of sustainable supply chains with 16 indicators is ultimately established. The information interpretation strength index and cumulative information contribution rate verify the rationality of the final indicator system. The outcome demonstrates that this screening method can strengthen the representativeness of the indicator system and rapidly reduce redundancy, leading to the better discrimination of the evaluation results. The findings of this study provide an indicator system and a methodological reference for both companies and policymakers and can aid in the transformation of supply chains toward sustainability.