Measuring sustainability performanc

Elkington (1998) for the first time introduced the three dimensions of sustainability. He called these dimensions as the triple bottom lines (3BL), which are profit, people, and the planet.  There are activities at the intersection of economic, environmental and social performance in which not only positively impact the environment and society but also could make economic benefits for companies in the long-term horizon (Carter and Rogers 2008). Sustainability criteria can be integrated into every component within the supply chain network including source, production, distribution, and transportation. If any of the dimensions is missing, the entire system is not sustainable.

Economic pillar 

Each supply chain problem has some costs such as the installation of facilities, transportation and so forth that should be considered in designing the network. The economic dimension of sustainability represents the cost or the profit in net present value (Hugo and Pistikopoulos 2005). This side of sustainability is usually defined as an objective function that should be minimized as a cost or maximized as a profit. Customer service level and product quality are also other measures of performance which can be categorized in this sustainability pillar. Meanwhile, different methods have been developed to measure the economic part of sustainability, including The Balanced Scorecard, Activity-Based Costing (ABC), and Economic Value Analysis (EVA).

Environmental pillar 

Sustainability in the environmental side of the supply chain is the management of impacts, which supply chain activities, can have on the environment. Zsidisin and Siferd (2001) defined environmental supply chain management as « the set of supply chain management policies held, actions taken, and relationships formed in response to concerns related to the natural environment with regard to the design, acquisition, production, distribution, use, reuse, and disposal of the firm`s goods and services« . Energy use, water consumption, greenhouse gas emissions, and land use are only a few examples of environmental impacts from supply chain activities. There are many approaches which have been used and supported sustainability objectives, such as integrated chain management, industrial ecology, life cycle management as well as green/environmental/sustainable supply chain management (Seuring 2004). However, the environmental aspect of sustainability is mostly dominated by Life-cycle assessment and impact criteria.

Life Cycle Assessment 

Environmental Life Cycle Assessment (E-LCA), generally denoted as Life Cycle Assessment (LCA), is a methodology which aims to address the environmental features of a product and their possible environmental impacts during its life cycle (Benoıt 2009). A product’s life cycle analysis includes the different steps from acquisition of raw material or production of natural resource to the disposal of the product at the end of its life, (i.e., cradle-to-grave) (Benoıt 2009).

LCA consist of (a) goal and scope definition, then (b) inventory analysis of all inputs and outputs, (c) impact assessment and, lastly, (d) evaluations. A comprehensive database for inventory analysis is available, and it is considered the least controversial part of this approach. The process of the impact assessment interpretation is typically very complex and timeconsuming, and only an expert in environmental management can properly perform it (Chiu, Hsu, et al. 2008). However, some researchers in the Netherlands represented a methodology in order to overcome this complex task by using one index to represent the environmental impact of a manufacturing process or a product. The index is based on the concept of an “ecological footprint,” and the current version is Eco-indicator 99 (Pishvae et al. 2014). The aforementioned index uses data from inventory analysis and converts these data into three categories in a unified way. These categories consist of ecological quality, resource consumption, and human health. Then a weight is considered for each quantity (40%, 20% and 40% for human ecological quality, resource consumption, and human health respectively) (Chiu, Hsu et al. 2008).

Social pillar

Social responsibility (SR) is defined as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” (WBCSD 1999). Despite technology advancements, supply chains are based on the interaction between individuals, which cause ethical issues at many levels of the process. (Clift 2003).