Supply Chain Sustainability

Supply chain management has become a common tool for ensuring success of business organizations. Measurement of supply chain performance is required to understand how successfully supply chain management has been implemented in a firm. And most of the main reasons for poor performance of supply chains is the lack of a measurement system (Verma, 2009). Some of importance of performance measurement in supply chain that founded by Varma, Siddharth et al. are : (1) SCM is being heralded as a value driver because it has such wide ranging effect on business success or failure. (2) Performance measurement can help firms in validating company strategies, and tested it for the competition. (3) A measurement system motivates the employees of the firm to make improvements. (4) An important activity for any organization to understand their variance and capture their business aspect. In order to assess supply chain efficiency, performance evaluation of the entire supply chain is of extreme importance.“Total supply chain performance” can be defined as the efficiency which takes into account multiple performance measures related to supply chain members, as well as the integration and coordination of members’ performance (Banomyong, 2011). Supply chain performance measurement can facilitate inter-understanding and integration among the SC members. It also provides insight to reveal the effectiveness of strategies and to identify potential opportunities. It makes an indispensable contribution to decision making in SCM, particularly in re-designing business goals and strategies, and re-engineering processes (Charan, 2008).

Many firms, governments, and citizens now recognize the need to go beyond green and have begun thinking in terms of  sustainability. In general terms, sustainability is defined as economic practices which meet the needs of the present without compromising the ability of future generations to meet their own needs (Sloan, 2010). Expanding one‘s thinking about sustainability and supply chain performance can be useful. A truly comprehensive measure of supply chain sustainability is perhaps impossible. However, that the ultimate goal is not to have a perfect measure to get their own needs. rather, the goal is to expand the thinking about what sustainability means and to enable more rigorous evaluations of different supply chain configurations. As a complementary tool, the forward-looking dynamic models are useful to explore possible sustainability prospects and facilitate the understanding of the relationship between current human interactions and anticipated future sustainability.

it is essential to note that sustainability in supply chain should be derived from the strategy of the own supply chain. This implies that all the enterprises within the supply chain agree on common objectives and those objectives are pursued by all the enterprises in their operations (Verdecho et al., 2012). it is necessary to establish mechanisms to deploy the supply chain strategy into operations as well as to monitoring the sustainability of the whole supply chain, which can be measured, and therefore, managed through performance measurement elements (objectives, performance indicators, etc.). it is also needed for those enterprises to define and use a structured performance measurement framework that allows managing performance under various perspectives or dimensions (Verdecho et al., 2012). the variables and indicators mentioned below represent a synthesis and integration of  concepts explored in earlier studies on sustainability and global supply chain management : Environment (such as : Air, Water, Land, Materials, Minerals and energy, Institutions and systems), Social (such as : Workplace, Community external), Economy (such as : Economics performance, Financial health, Market Structure, Institutions and systems)

               Sustainable supply chain as one that is operated in a way that generates competitive returns on its capital assets without sacrificing the legitimate needs of internal and external stakeholders and with due regard for the impact of its operations on people and the environment (Sloan, 2010). Sustainability measurement model of supply chain is really important, in order to support the government and company stakeholders to harmonizing regulations, decision making and improving the efficiency. Masaaki Sugiyama, from Petroleum Association of Japan also give a suggestion that formulating “Innovative Strategy for Energy and Environment“ before reexamination of current Strategic Energy Plan is really important.