Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

3.3.5 The Measurement of the Environmental Performance of Sustainable Supply Chains

Intended learning outcomes: Produce an overview on ecoefficiency. Describe an indicator system for the costs, quality and delivery, and environmental impact performance dimensions.


Ecoefficiency compares economic performance and environmental performance.

The comparison can be expressed as a quotient, or as a (e.g., linear) utility function. Section 1.4 considered the indicators for measuring economic performance. [Pleh13] shows a number of indicators relating to the measurement of environmental performance. For the purposes of the comparison, both groups of performance indicators must be measured using suitable units, or derived from measured intermediate statistics, then weighted and — finally — converted to a scalar value by means of a formula. From the range of available environmental indicators, [Pleh13] has selected the following top-level performance indicators:

  • HH — Human Health, measuring unit “Disability Adjusted Life Years,” DALY.
  • ED — Ecosystem Diversity, measuring unit “Potentially Disappeared Fraction of Species,” PDF
  • RA — Resource Availability (e.g., energy, water), measuring unit $
  • UBP06 — “Umweltbewertungspunkte” (a method of the Swiss Government)
  • CO2e — CO2-Äquivalent, measuring unit tons

Fig. 3.3.5.1 shows these five indicators as an integrated model.

Fig. 3.3.5.1        Indicator system for the costs, quality and delivery, and environmental impact  performance dimensions (adapted from [Pleh13]).

The economic indicators are grouped using the target areas for business performance from Figure  1.3.1.1. The actual measurement of the indicators is carried out at the operational level. A suitable formula is then applied to convert the measured results into indicators at a tactical level, which are then used for the ecoefficiency comparison. The comparison itself, shown in the diagram at strategic level, is expressed by a utility function, where x1 represents the environmental indicator and x2the economic indicator.

The ecoefficiency can be measured for each work process or manufacturing process. It takes into account both the machine and the material that is used. On the one hand, the ecoefficiency for a group of machines or for a whole factory is of interest. On the other hand, it is also interesting to include all the work processes and components (i.e., to add them together) that go into a product, and to compare it with an alternative manufacturing process that would lead to a functionally equivalent product. The benefit of an environmentally advantageous material can be more than cancelled out by less efficient work processes, for example — and vice versa.



Course section 3.3: Subsections and their intended learning outcomes

  • 3.3 Sustainable Supply Chains

    Intended learning outcomes: Explain the changing concept of sustainability with reference to the triple bottom line. Disclose economic opportunities for social commitment and for environmental commitment. Describe energy management concepts and measures for improved environmental performance. Produce an overview on the measurement of the environmental performance. Present social and environmental dimensions in industrial practice.

  • 3.3.1 The Changing Concept of Sustainability with Reference to the Triple Bottom Line (TBL)

    Intended learning outcomes: Produce an overview on the concept of the triple bottom line. Present the paradigm change that correlates to the evolution of sustainability aspects and their interaction.

  • 3.3.2 Economic Opportunities for Social Commitment of Sustainable Supply Chains

    Intended learning outcomes: Disclose the term “double bottom line”. Produce an overview on ethical standards, or code of conduct (CoC). Differentiate between groups of company-internal ethical standards and groups of company-external ethical standards. Present the supplier code of conduct (SCoC) and the certificate of compliance.

  • 3.3.3 Economic Opportunities for Environmental Commitment of Sustainable Supply Chains

    Intended learning outcomes: Produce an overview on energy-intensive industries. Disclose examples of using alternative fuels and raw materials in order to decrease the carbon footprint and the amount of fossil fuels required in the cement industry. Differentiate between opportunities and threats favoring proactive and reactive environmental involvement.

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