Designing the performance measurement for sustainable supply chain of the crude palm oil (CPO) companies using lean & green supply chain management (LGSCM) approach (Case Study: Indonesia's palm oil company)

• Published in: IOP conference series. Earth and environmental science Vol. 426; no. 1; pp. 12116 - 12124
• Main Authors: Khair, Fauzi, Wijaya, Dendhy Indra, Yulianto, Hubertus Davy, Nugroho Soebandrija, Khristian Edi
• Format: Journal Article
• Language: English
• Published: Bristol IOP Publishing 01.02.2020
• Subjects: BSC; Environmental effects; green; Indicators; lean; Operating costs; Palm oil; Performance evaluation; Performance measurement; SCM; Supply chain management; Supply chain sustainability; Supply chains; sustainable; Vegetable oils; Indonesia
• ISSN: 1755-1307; 1755-1315
• DOI: 10.1088/1755-1315/426/1/012116

One of the important activities to achieve a sustainable palm oil company is by improving the sustainable supply chain management, especially being in line with the lean and green SCM concepts. The lean concept aims to reduce costs and to increase the effectiveness of the supply chain. While the green concept tries to ensure that the ongoing process keeps bringing good effect on the environment. In designing the performance measurement of the sustainable supply chain through the lean & green supply chain management approach, this study includes a formulation for Key Performance Indicators (KPI) and grouping of the lean and green indicators which are integrated with the balanced scorecard (BSC) perspectives. It obtained 28 KPIs which consists of 15 lean supply chain KPIs and 13 green supply chain KPIs. Based on overall weighting, the highest priority KPI is the company's total revenue and total operating costs, followed by the total cost of the supply chain (all of them are from a financial perspective). The weights of three KPIs are 0.103, 0.078 and 0.072 respectively.