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.
