t

Measuringthe Sustainabilityof Global Supply Chains: Current Practicesand Future Directions

Dr. Thomas !V. Sloan, University of iVlassachusettsLowell, USA

ABSTRACT

Researcherstrntl pructitioners ulike hcne become increasinglv interestedin the env'ironmental pe('ormance oJ-globolsttpply chains. Does improving the environmentalperJbrmance o.f a single link of ct suppl.r-chain improve the entire chttin's sustuinabitiry - that is, econr.tmic,social, ctnd environmentttl outcomes/ Answering thisqttestion is impossiblewithout a way to measureperformance, and this paper of seeksto answer the question: what are the goals, requirements,an(J challenges of an overall measure supply chain sustainabitity'/ In the process of answering this question, three things are accomplished' used to First, more than 70 articles antJ books ure reviewecJto give an overview of current methods chain improve businesssustainabitity anrt measure performance. Second,a new framework of supply global sttpply chain sustainabiliry is introducerl. ThirtJ, three research propositions related to who can use the sustaintrbilitymeasurement are presenterl. This research has implicationsfor scholars empirical analyses. The research also has framework and propositions to tlirect new theoretical and - stakeholderswith an interest implicationsfor practitioners managers,policy makers, and community in making global supply chains more sustainable.

INTRODUCTION

'green' In recent years, many firms have begun efforts to their businesses. The impetus for these preferences' efforts comes from external forces, such as increasedregulation and changesin consumer of and from internal forces, such as the values of the firms' leadership. For example, manufacturers large appliancesmust take new regulationsregarding product recovery into considerationas they design the next generation of washers and dryers. Drivers in the United States (U.S.), once lovers of large vehicles. SUVs, now pay top-dollar for smaller and more environmentally-friendly hybrid find Manufacturers have re-examined waste from their processesto reduce emissions' save energy, and alternativeuses for byproducts. Many firms, governments,and citizens now recognlze the need to go beyond green and have begun thinking in terms of sttstrtinabitity. In general terms, sustainability is defined as economic practices 'meet which the needsof the presentwithout compromising the ability of future generationsto meet their own needs' (WCED, 1987). Building on the definition of sustainableoperations managementby Kleindorfer et al. (2005), we define a sustainuble supply chain as one that is operated in a way that 'competitive generates returnson its capital assetswithout sacrificingthe legitimateneeds of internaland external stakeholdersancl with due regard for the impact of its operationson people and the environment' (p.a8e). previousresearch related to supply chain sustainabilitycan be divided into two broad areas. The 'local' first area has to do with efforts to improve sustainability. This topic covers the tools and techniquesthat firms use to improve environmentalperformance as well the efforts they make to report

'F * 92 The Journalof GlobalBusiness Nlanagement Volume 6 Number 1 February2010 l'esults to outside stakeholders. This researchraises an important question: Does improving one dimensionof sttstainabilityfor one link in a supplychain actuallyincrease the overall sustainabilityof the 'global' entire chain? The secondbroad areaof researchhas to do with performancemeasurement; that is, how one assessesthe performanceof industries,economies, and countries. This area covers the developmentof variouscomposite indicators: multi-dimensional measures designed to evaluatecomplex concepts such as human well-being, industrial competitiveness,and the performance of health care systems. While many important lessonscan be gleaned from this work, it does not yield practical performance measuresthat managerscan use to improve supply chain sustainability. The goal of this paper is lay a theoreticalfoundation for the developmentof an objective measureof global supply chain sustainability. In the coursepursuing this goal, the paper makes three conrriburions. First, it provides a review of the tools and methods currently used by businessesto incorporate sustainability into their businesspractices. Second, it introduces a new framework for thinlang about and exploring supply chain sustainability. And third, it presents three research propositions related to global supply chain sustainability measurement, which can serve as a springboard for future theoretical and empirical investigations.

REVIEWOF SUSTAINABILITYTOOLS

As mentioned above, firms are becoming more interested in sustainability for many reasons,some 'local' internal and some external. The first line of attack is to address issues;that is, to work on thines that are within their immediate control. Four ways that firms do this are discussedbelow.

Decision-Making Tools Once a hrm has decided to take action with regard to sustainability, where does it begin? Many tools and methods have been developed in the last 20 to 30 years to help incorporate sustainability conceptsinto businessdecision making. One of the most prevalent, Lik Cycle Assessment(LCA), is a tool used to evaluate the environmental impact of a product by identifying and measuring all of the materials and energy required to design, produce, deliver, and consume a product. Although LCA is an important and powerful tool, it may difficult to obtain the relevant data and that it ultimately involves subjectiveevaluations by thoseperforming the analysis(U.S. E.P.A., 2006). In addition, its sole focus is environmental factors. Robdrt et al. (2002) discussmany sustainability tools and frameworks, including ISO14000, LCA, Ecological Footprinting, Factor 4, Factor 10, SustainableTechnology Development, Natural Capitalism, and The Natural Step Framework. The authorsdiscuss how the different tools can be used and how they complement each other. Waage et al. (2005) build on the previous discussionby exploring the types of questionsthat practitionersface when incorporating sustainabilityfactors into businessdecision making. For example, which tool(s) should be used in a particular context? Rather than focus on the environmental impacts themselves,other researchfocuses on instruments to evaluate costs and benefits of green practices. Seuring (2001) proposes a framework for evaluating the costs for the entire supply chain, using the fashion industry as a backdrop. De Groene and de Haan (2001) discussthe developmentand application of a method to measureenvironmental costs and benefits for small- and medium-sizedfirms. Barbiroli (1996) observesthat traditional productivity measuresfail to capture the complex economic and technical efficiency of production processesand proposesa new measure,which is the sum of 12 economic,environmental, quality, and productivity performanceindices.

The Journal of Global BusinessManagement Volume 6 * Number I * February 2010 93 econonuc (2003) developa methodologyto evaluatethe Extendingthese ideas, Barbiroli and Raggi processand developa numericindex called the impact of envrronmentalinnovations for a pe'ticular two-srepmethodorogy ro evaluateenvironmentally global efiiciencyratio. sarkrs(lggg) developsa factorsare sortedusing the Analytic Network consciousmanufacturing (ECM) programs. Relevant usingData EnvelopmentAnalysis process(ANp), andthen the ECM programalternatives are evaluated (DEA). (2001)'and Figge et al. (2002)discuss how a Epsteinand Roy (2001,2003), Epstein and wisner severalkey environmental,social, and economic barancedscorecartJ approach can be used to track to look beyonda singlemeasure of performance' measuresof performance,which enablesmanagers with whichfirms canintegrate sustainability factors presleyet al. (2007)develop an analyticalframework abovecan play an importantrole in strategicdecisions. All of the tools discussed into long-term, these performanceof firms. Nevertheless,measuring improving the environmentaland sustainability improvementscan be elusive'

Environmental and Sustainability Reporting signalconcern with issuesbeyond the way that frms attemptto improve sustainabilityand Another often their sustainabilityperformance' Thesereports financial bottom line is by creatingreports about separatefrom the usual annualreports' with environmentalperformance and are often deal exclusively refersto Triple BottomLine (TBL) accounting,which one importantform of sustainabilityreporting is performanceto include environmentaland social the expansionof traditional accountingof financial 'stakeholders" that businessesmust also answerto performance. TBL accountingis driven by the idea while TBL accountingis becomingmore widely i.e., all of thoseinfluenced by the actionsof the firm. are not always to fums of engagingin this type of reporting E used,few standardsexist, and the benefits ,$ clear. tr by tl environmentalreporting, which was pioneered $ Fatkin (2001)provides an overview of corporate I The Global performanceand betterstandards are needed' E polaroid, and concludesbroader measures of effort to develop standardsof sustainability Reporting Initiative (GRI) is a non-prof,rt,collaborative I firms can communicate guidelines,issued in october 2006,detail how l reporting. The latestreporting I (GRI, 2006)' Husseyet al' (2001) t to the public their environmental,docial, and economicperformance I and veleva et al' (2003)report on the typesof discusshow the GRI guidelinescan be operationalized, efforts,concluding that supply-chainlevel t indicatorsflrms currentlyuse to describetheir sustainability ManagementInitiarive (GEMI) I theGlobal Environmental I Similar in spirit to GRI, : measuresare needed. ! 'foster health and safety (EHS) excellence' tl to environmental 5 is a group of firms that work together sharesinformation than promote genericreporting guidelines, GEMI I: (GEMI, 2009). However,rather t provide leadershipin EHS managementand sustainable I about tools and practicesand attemptsto I develoPment. I haveincreased dramatically in the last I sustainabilityreporting rates I A recentstudy indicates that I - doubled I - many othercountries reportinghas f few years. Indeed,in the u.s. which lags behind somesort of corporateresponsibility information il since2005, andT4percentof the top 100 firms reported on the surface,previous research has suggested that t in 200g (KPMG, 200g). while this is encouraging il reportingfor symbolicreasons rather than out of a il many flrms engagein sustainabilityand environmental (Adams,2004); thus, an increasein genuineconcern for accountabilityto a wider set of stakeholders I (Price,2008)' Firms can chooseto report alwaysa reflectionof increasedsustainability t* reportingis not I t-t * * 2010 ilr entVolume6 Number 1 February I L whateverinformation they want, so thereis obviously an incentiveto focus on positive outcomes.These findings suggeststhat more objectivemeasures of sustainabilityperformance would be useful.

GreenSourcing

Another importantway that firms haveattempted to increasethe sustainabilityof their businessesis by incorporating environmentalissues into their purchasingpolicies. For example, firms can work with suppliersto find raw materials with reducedenvironmental impact. Researchershave studied the strategic aspectsof green scurcing (Sroufe, 2006; Kam et al., 2006) as well as the more practical aspects (Handfieldeta1.,2005; Holt, 2004;Min and Galle, 1991,2001). Greenetal. (1998)and Schlegelmilch et al. (1996) examine the relationship between green purchasing and environmental performance,while Carter et al. (2000) and Klassen and Mclaughlin (1996) study how green purchasing practices affect a firm' s financial performance. Nagel (2006) proposes a measure of environmental performance that original equipment manufacturerscan use to evaluate their suppliersusing a set of equationsthat describesthe relationship between the inputs and outputs of a production process. Handfield et al. (2002) illustrate the use of a quantitativetechnique with which to evaluatesuppliers based on a number of dimensions,including waste management,certifications (e.9., ISO14000), and compliance with governmentregulations. Walton et al. (1998) use a case-basedapproach to identify key focus areas for improving the purchasing function's impact on environmental performance. This research on supplier evaluation also focuses primarily on the environmental dimension and does so only for a single link in the supply chain.

Supplier Codes of Conduct Another important area of research examines supplier codes of conduct (SCC). As the name suggests,such codes, which may be voluntary or required, delineatedesirable and undesirablebehaviors for suppliers. SCC are one of the key mechanismsby which large corporationsattempt to ensureethical behavior on the part of their suppliers(Roberts, 2003; Locke and Romis, 2007). SCC typically focus on labour issuesand are one of the main ways in which the social dimension of of supply chain sustainability has been addressed. Much researchon SCC addressesquestions about the meaning of corporate social responsibility (CSR) and ethical behaviour and explore how SCC play a role in theseareas (Roberts, 2003; Logsdon and Wood, 2005; Sobczak, 2006). Other researchexamines the structure and effectivenessof SCC, using different methodologies(Egels-Zand6n, 2001; Sethi, 2003; Jiang, 2009a and 2009b; Doig and Wilson, 1998; Kaptein and Schwartz,2008). Many other researchershave conductedcase studiesof SCC within particular industries, such as apparel (Emmelhainz and Adams, 1999) and footwear (Lim and Phillips, 2008); individual companies,such as IKEA (Pedersenand Andersen, 2006) and Reebok (Yu, 2008); and regions, such as the United Kingdom (Schlegelmilchand Houston, 1989), South Korea (Frenkel and Kim, 2004),Brazll (Frenchand Wokutch,2005), and Ireland(O'Dwyer and Madden,2006). In summary, there has been a great deal of work on the environmental dimension, and, to a lesser degree,the social dimension of sustainabilityof businesses. However, most of this researchhas focused on single processesor firms and focused on one dimension at a time. Works examining the larger supply chain context are primarily descriptive. While these are important steps toward understanding sustainability,there is still a need to look beyond a single link in the supply chain and to look at measures which integratemultiple dimensionsof performance.

* * J The Journal of Global Business Management Volume 6 Number 1 February 2010 95 REVIEW OF PERFORMANCE EVALUATION METHODS

and country-level performance Many researchershave attempted to measureindustry-, economy-, of global supply chain sustalnability with respect to different dimensions, and our understanding measurementcan benefit from an examination of thesemethods'

Closed-Loop SuPPIYChains and other resources The term supply chain refers to the system of people, activities, information, and deliver them to the end designed to transform raw materials into finished goods and services 20 yearshas been to expandthe consumer. An important changein supply chain managementin the last the reverseflows of material definition from an open-loop to a closed-loop supply chain, i.e., to include typical supply chain, where each and waste. Figure 1 illustrates the forward and reverse flows for a such as suppliers' node in the diagram representsa sub-network of organizations and businesses

End ol Life Procurernont

Figure 1: Typical Forward and ReverseFlows in a Supply chain

reverse logistics and Much of the research on closed-loop supply chains has focused on the et al' (2004) present processes needed to recover, remanufacture, and/or recycle products' Dekker models addressing network numerous quantitative models related to closed-loop supply chains, including (2005), in contrast' describe a number design, production planning, and inventory control. Flapper et al' and industries' Gungor of case studies, discussing closed-loop supply chain applications in many firms issues of product recovery, and Gupta (1999) review the extensive literature that has evolved regarding while Thierry et al. (1995) focus on strategic, conceptual issuesrelated to the subject' a small part of the While product recovery and reverse logistics are important topics, they represent strategic issues related to the broader concept of green supply chains. Sarkis (2003) discussesmany (2001, 2006) cover virtually every developmentof green supply chains, and the edited volumes of sarkis (2001) present a detailed case aspectof green supply chains, including many case studies. Khoo et al. of a green supply chain' study and discussthe use of various modeling tools to assistin the development myopic and that to be sustainable, Svensson(2007) arguesthat the traditional view of a supply chain is too that supply chains be classified the definition of a supply chain must be expanded. The author proposes Srivastava (2007) for an according to the degree of renewable and recycled resources used. See extensivereview of green supply chain research.

Supply Chain Performance Measurement chain performance in Gunasekaranet al. (2001) introduce a framework for measuring supply the supply chain' Gunasekaran different areas and propose metrics for different dimensions and areas of that there is plenty of interest et al. (2004) survey the practices and attitudes of U.K. frrms and conclude of thesepapers highlight the in measuringperformance but some uncertainty as to how go about it. Both

6 x Number 1 * February 2010 The Journal of Global Business Management volume I I I

challengesof measuringsupply chain performance,and this point is further echoed by Hervani et al. (200s)

An important tool for evaluating supply chain performance is the Supply Chain Operations Reference model (SCOR): a framework for describing, measuring, and comparing supply chains (Supply-ChainCouncil, 2008). The latest version of SCOR also includes metrics aimed ar improving sustainability such as emissions cost per unit and waste produced as a percentageof product produced (Blanchard, 2008). Most efforts towards evaluating supply chain sustainability have focused on environmentalissues (e.9., Mclntyre et al., 1998).Other researchhas soughtto extendLCA and similar methods to supply chains (Lambert,2001; Faruk etal., 2001). Cholete and Venkat (2009) study the energy usageand carbon dioxide emissionsin supply chains, with particular emphasison the distribution of wine. Kumar et al. (2001) develop a methodology to assessthe environmentalimpact of a product and the processes required to produce it. A measure is developed that captures the social, ecological, and economic impacts of a product with respect to dimensions such as manufacturing, packaging, use, and 'production disposal.Tyteca (1996) develops a efficiency' method to measureflrm-level environmental performance. Fdre et al. (2004) expands and modifies the method of Tyteca (1996) to allow country-level environmental performance measurement. Kainuma and Tawara (2006) develop a model to examine the trade-offs between different dimensions of performance for an entire supply chain.

Composite Performance Indicators Economists, sociologists, ecologists, policy makers, and others have long sought to measure the performance of a country along one or more dimensions. Just as the gross domestic product (GDP) is accepted as a measure of a country's economic fortitude, indices have been developed to measure a country's performance in many other dimensions such as healthcare (Jacobs et al., 2004, 2006) and citizen well-being (Baliamoune-Lutz, 2006). Freudenberg (2003) offers a general critique of composite 'how-to' indicators,and Nardo et al. (2005) presenta guide. There has also been much work specifically on sustainable development, proposing frameworks (Corbidr-Nicolliere et al., 2003; Labuschagne et al., 2005b), exploring philosophies (Levett, 1998), discussing technical challenges (Munasinghe, 1993), and developing specific methods (Bossel, 1999; Cherchye and Kuosmanen, 2006: Custance and Hillier, 1998; Giampietro et al., 20A1; Graedel and Allenby, 2002; Pint6r et al., 2005). One important composite metric is the Environmental Sustainability Index (ESI). Developed by a consortium of academicand governmentinstitutions, the purpose of the ESI is to benchmarkthe ability of nations to protect the environment over the next severaldecades (Yale, 2005). The index is basedon 76 variables, which capture information related to the resources,policies, and performance of nearly 150 nations around the world. The 76 variables are reduced to 27 indicators, and a country's ESI score is computed using theseindicators. Five main factors underlying the 21 indicators,such as 'environmental 'social systems' and capacity', &re identified. In the next section, we discusssome ways that the lessons of the ESI can be translatedto the context of a supply chain.

MEASURING GLOBAL SUPPLY CHAIN SUSTAINABILITY

In this section,we discussthe developmentof a quantitativemeasure of supply chain sustainability. The objective of this research is to lay the groundwork for a measure that captures the heart of this inherently complex and multi-dimensional concept.

The Journal of Global BusinessManagement Volume 6 * Number I * February 2010 F

Building Blocks rather than a singledimension, A measurethat lncorporatesfactors from more than one dimension, it also raisesa number of challengeswith gives a more completepicture of sustainability. However. five steps involved in the developmentof respect to measurement. Freudenberg(2003) identifies and developrelevant variables, (3) compositeindicators: (l) Develop atheoreticalframework, (2) Identify analysis'Each of these Standardizevariables, (4) Weight and group variables,and (5) Perform sensitivity a theoretical framework' areashas challengesassociated with it. The primary challenge is developing the context of country-level Many sustainability frameworks have been proposed, primarily in (2005b) propose a performance. Using some of these frameworks as a foundation, Labuschagneet al. to the context of a framework to assessindustry sustainability. We, in turn, adapt their framework and thus global supply chain. The framework provides a lens through which one views sustainability 2 illustrates the basic will have a major effect on which variables to include and/or construct. Figure sustarnability' framework that will be used to guide the developmenta measureof supply chain theory building Using the recent work of Carter and Rogers (2008) as a guide, we use a conceptuai propositions- one for method to develop researchpropositions based on the above framework. These 'explain or suggesttestable each dimension of sustainability- seek to an event, provide understanding, (Weick, 1989; Meredith, hypotheses'(Meredith, 1993, p. 8). Such an approachis not without challenges chain sustainability,we 1993;Wacker, 1998); however, what Carter and Rogers (2008) did for supply performance' hope to replicate here with respectto the measurementof global supply chain sustainability represent a While a specific measure is not proposed, the variables and indicators discussed below and global supply chain synthesis and integration of concepts explored in earlier studies on sustainability management.

Figure 2: Supply Chain SustainabilityFramework

SustainabilityMeasures and Indicators Sustainabilityinvolves factors in three broad dimensions:environment, society, and economy. Below we identifvsome variables that relate to eachdimension'

* x 98 The Journal of Global Business Management Volume 6 Number 1 February 2010 Environmental Factors The term environmerlt typically refers to the natural environment: all of the living and non-living things that occur naturally on Earth, including the land, water, plants, animals, etc. Improving environmentalsustainability means reducing the ecological footprint of the supply chain. of the three dimensions, the environmental aspect of supply chain management has been studied the mosr. Handfield et al' (2002) identify more than 50 environmental performance indicators by which suppliers can be evaluated; Labuschagne et al. (2005a) also identify many factors related to environmental sustainability' we divide the environmental factors into six categories. (l) Air: Refers to the local impacts, such as carbon monoxide emissions, as well as global impacts, such as ozone depletion. (2) water" Refers to both quality and quantity impacts, e.g., toxic dischargesas well as total usage.(3) I^and: Refers to how much land is used, how it is used, and the impacts of the use, such as soil pollution. (4) Materials: Refers to quantity of material used, the type of material used, and the potential effects of that material' (5) Minerals and energy: Refers to the use of non-renewable mineral and energy resources.(6) Institutions/Systems Refers to the values, procedures, and systems - both internal and external - that relate to the environment. Table I provides example measureswithin each category.

Table 1: Exam Environmental Metrics and Indicators Cat Exam Air Emissions(per unit produced) Useof ozonedepletine substances Waterused (liters) Water reuse/recyclin Soil pollutants released Landfill waste (tons) Materials Postconsumer recyclable content (Vo) Hazardousmaterial content Massof materialsused Global warmingpotential of materials(e. Mineral and energy resources Energy from renewable sources (7o) Total energy used Institutions/Systems ISO 14000 certification 'Energy Star' product labeling Public reporting of environmental performance Regulatorycompliance (e.g., EPA) EnvironmentalManagement System (EMS) in use

These indicators, along with the aforementioned research on improving supplier sustainability, lead to the following proposition: Proposition 1: Supply chains that explicitly measure environmental performance will perform better in all dimensionsof sustainability. Anecdotal evidence of the validity of this proposition can be found in the literature related 'greening' to suppliers(e.g., Walton et al., l99g).

Social Factors The social dimension of sustainabilityrelates to the human capital of the supply chain. Improving sustainability with respectto the social dimension involves developing and maintaining businesspractices that are fair and favorable to the labor, communities, and regions touched by the supply chain. Social

The Journal of Global * * Business Management Volume 6 Number I February 2010 99 performanceindicators are grouped into three categories.(l) Workpluce:Refers to the internal human resources,i.e., those who work within the supply chain. (2) Conmunin': Refers to all peopleoutside of the supply chain, includingthose who are directly and indirectlyaffected by the chain's performance.(3) Institutions/Systems:Refers to the internal and external systems,procedures. and values that relate to the socialdimension. Appropriatemeasures and indicatorswithin eachcate-eory will dependon the industry, location,cultural norms, and so on. Some items, such as healthcare,span categories,since they have both internal and external implications. Example measuresand indicators are listed in Table 2. This discussionleads to the following proposition: Proposition 2z Supply chains that explicitly measure social performance will perform better in all dimensionsof sustainability. Literature on SCC effectiveness(e.g., Egels-Zand6n,200l) provides some evidence related to this proposition.

Table 2: Example Social Metrics and Indicators Catesorv Examples WorkplaceAnternal Wages Employeecontracts Healthcarebenefits Opportunities for career development Number of accidents and/or deathsper -hour of work CommunitvlExternal Product liability (e.9.,recalls) Healthcare benefits Institutions/Systems Supplierevaluation rncludes social factors Hoursof safetytraining per employee Regulatorycompliance (e.g., OSHA) Health and Safetv Manasement S m ln use

Economic Factors The economic dimension of the supply chain refers to the profits earned by the members of the chain as well as the economic benefits realized by the host nations, regions, and communities of those members. Thus, this dimension goes beyond the internal proht earned by a particular company, and some factors that fall under this category may not be easily measured in financial terms. Economic factors are sorted into four categories.(l) Economic performance; Refers to the ability of the firm to carry out its operationsas well as the market value of the firm. (Z)Financial health.'Refers to well-being and long-term viability of the firm with respectto financial resources.(3) Market and structure: Refers to health of the market and the configuration of the supply chain. (4) Institutions/Systen.s.'Refers to the internal and external systems,procedures, and values that relate to the economic dimension. Example measuresand indicatorsare listed in Table 3. This discussionleads to the following proposition: Proposition 3: Supply chains that explicitly measureeconomic performance do not necessarilyperform better with respectto the environmentaland social dimensionsof sustainability. This proposition is somewhat contradictory in light of the first two propositions. Why does measuringenvironmental performance, for example, improve economic performance but not vice versa? We conjecture that this result relates to the hierarchical nature of the measures. Put differently, firms already measureeconomic performance,but they do not (generally)measure environmental performance. The increased scrutiny that accompanies expanded measurements will reveal waste and other opportunitiesfor improvement,thus enabling the firm to benefit economically.

* * The Journal of Global BusinessManagement Volume 6 Number 1 February 2010 Table3: ExampleEconomic Metrics and Indicators Category Examples Economicperformance Order fill lead tirne Product defect rate Transportationcost per unit Productivity Market value Financialhealth Profitability ratio Cost of goodssold Return on working capital Market and structure Degreeof vertical integration Depth of supplierpool Breadth of customerbase Market share Institutions/Systems Regulatorycompliance (e.g., CPSC) ISO 9000certification QualityManagement System in use

Clearly, the example metrics in the tables do not representexhaustive lists, and some of the items overlap - both within and between dimensions.The primary impediment to evaluating such complex, multi-dimensional conceptsas sustainabilityis not lack of inputs; rather, it is what to do with the many 'It inputs available.As some expertshave noted, is not difficult to come up with ideas for indicators...the problem is selecting the most appropriatefrom the myriad possibilities' (Custance and Hillier, 1998). Measurementchallenses are discussedin the next section.

AssessmentChallenges In addition to the conceptual challenge of what factors to include, many other technical and practical challengesexist. Assuming that all of the relevant factors have been identified, how does one winnow, reduce, combine, etc. the factors to distill a single number? The reduction process will no doubt involve some subjective aspects,e.g., how does one weigh the environmental factors compared with social and economic factors? A variety of techniqueshave been used to addressthese issues,such as factor analysis and principal components analysis (H,irdle and Simar,200l), Data Envelopment Analysis (DEA) (Reiner and Hofmann, 2006), the Analytic Network Process(ANP), and the Analytic Hierarchy Process(AHP) (Handfield et al., 2002; Yakovleva et al., 2008). Data collection is another major challenge in the process of evaluating sustainability. Although we may believe that a particular factor is relevant, there is no guaranteethat a given company monitors this factor. For example, Nagel (2006) found that a large proportion of firms studied did not (or could not) accurately measure the mass of materials flowing through their production processes. Another important measurementissue is how to standardizethe variables. This issue is discussedextensively in the ESI report reviewed in the last section(Yale, 2005). Despite these challenges,simply expanding one's thinking about sustainability and supply chain performance can be useful. A truly comprehensivemeasure of supply chain sustainability is perhaps impossible. It is important to note, however, that the ultimate goal of this type of metric is not to have a perfect measure;rather, the goal is to expand our thinking about what sustainabilitymeans and to enable more rigorous evaluationsof different supply chain configurations.

* The Journal of Global BusinessManagement Volume 6 * Number I February 2010 101 SUMI\TARY AND CONCLUSIONS

Most parties agree that irnproving supply chain sustainabilityis a desirable goal. However, measuresof sustainability have not been forthcomrng. Furthermore, most mana_qement-orientecl researchrelated to sustainabilityhas focusedonly on improvin-9environmental performance. While this is a worthy objective,the environmentis only one dimensionof sustainability. The main purposeof this paper has been to establishthe need for and to begin the developmentof quantitativemeasures that ( I ) incorporate factors from all dimensions of sustainability and (2) capture the performance of the entire supply chain, rather than individual firms. These measurescan then be used to explore different supply chain configurationsand practices. Two broad areas of relevant research were discussed. First, the techniques used by firms to improve local performance were examined. These tools typically focus on environmental performance for one, or perhaps two, links in the supply chain. The second broad area of researchdiscussed deals with performance measurement at higher levels. Significant work has been done on supply chain 'greenness.' performance measurement,particularly with respect to Composite performance indicators, 'fuzzy' such as the Environmental Sustainability Index, attempt to capture complex, sometimes concepts with single number. While theseindicators serve an important purposeand set an encouragingexample, they are difficult to apply in a supply chain context. To address the need for measuring sustainability of a global supply chain, we first proposed a simple framework based on the traditional dimensions of sustainability: environment, society, and economy. Next, sub-dimensionsfor each area were identified and discussed.Example metrics and indicators were proposedfor each of the sub-dimensions. The challengesassociated with measuringthe factors and constructinga composite measurewere discussed. Finally, we introduced three propositions related to global supply chain sustainability measurement. These propositions lay the groundwork for future theoreticalexploration in this area. In addition to developing simple analytical models to develop measures of sustainability,future researchshould also include in-depth studiesof specific supply chains and/or industries.

Clearly, much work remains to be done to develop a measureof global supply chain sustainability. However, one of the main lessonsof this paper is that the proce.ssof developing a measure is perhaps more important than the actual measure. First, it forces manufacturers,suppliers, governments, and consumers- to take a broader view of sustainability.Second, it highlights the need to consider the entire supply chain rather than just the individual parts of the chain. Current practice allows decision makers to focus myopically on factors and/or links that are the most appealing or convenient. An athletic shoe maker can focus on reducing hazardousmaterials, while ignoring the sweatshopconditions for the workers making the shoes. A large retailer can focus on savings in transportationcosts, while ignonng the environmental impact caused by the consumption patterns facilitated by its ,throw -away, goods' only by enabling - - or perhaps forcing managersto recognize a broader perspectivecan we begin to make progresstoward true sustainabilitv.

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