Sustainable Benchmarking of Supply Chains: Designing indicators with Analy=cal Hierarchy Process Dr Natalia Yakovleva Senior Lecturer in Interna4onal Business Strategy Newcastle University London Workshop: “Indicators and Metrics for Socially Inclusive Waste Management and Resource Efficiency in Supply Chains: Measuring and Repor@ng to Embed Sustainability in Policy and Prac@ce” Florianopolis, Brazil. 23-25 May 2017
Outline 1) Sustainability in the food supply chain 2) Designing indicators for measuring sustainability in the supply chain 3) AHP for benchmarking sustainability in the supply chain Acknowledgment: Professor Joseph Sarkis (Worcester Polytechnic Ins4tute) and Thomas Sloan, (University of MassachuseVs Lowell) Yakovleva N, Sarkis J, Sloan T. Sustainable benchmarking of supply chains: the case of the food industry. Interna'onal Journal of Produc'on Research 2012, 50(5), 1297-1317.
Sustainability in the food supply chain • Examining sustainability impacts of the food produc4on and consump4on system looking at environmental, social and economic impacts. • Aims of the sustainability assessment: • To evaluate sustainability effects of the food system on using triple boVom line (establishing a baseline) • To evaluate effects of technology in the food system upon sustainability (impacts of technology on the baseline) • To compare compe4ng or alterna4ve strategies/models of food produc4on and consump4on (compare with the baseline)
Mapping the product supply chains (chicken and potatoes in the UK) Breeding Hatching Rearing Primary Exports Imports Processing Incinerators Equipment Further Landfill Feed Processing Other waste Packaging Final disposal op4ons manufacturing Transport Regulators Wholesale Local Other Supermarkets Food service butcher retailers Consumers
Inputs Supply chain stage Outputs Breeding air energy water emissions transport fer4lisers Seed produc4on wastewater machinery waste Agricultural growing Packing energy water air emissions transport materials Processing wastewater chemicals equipment Final waste manufacturing transport Merchants air emissions energy Wholesalers wastewater equipment Food service waste Retailers Green grocers water air water emissions energy wastewater Consumers equipment waste
Sustainability concerns and food • Economy : Food manufacturing is the single largest industrial sector in the UK, contributes 8% to the UK GDP • Employment : Food manufacturing employs 12% of the UK workforce; Health and safety; Job security and wages • Consump'on : Expenditure on food and drink accounts to 8%-20% of household expenditure • Consumers : Food safety, Marke4ng policies, Value for money, Gene4c engineering, Food prices • Business partners : Contracts with suppliers, Fair trading, Support of local producers
Sustainability concerns and food (con=nued) • Community : Charity contribu4ons and community investment, Jobs created/Tax paid, Provision of local services • Environment : Ogen environmental impacts around agricultural produc4on, e.g. Use of pes4cides, Emissions to water and air, Food contributes to 22% of GHG emissions in the UK, Land use, Biodiversity, Sustainable agriculture, but also other concerns around Transport and energy, Packaging, Waste disposal • Animal : Animal welfare, Ethical produc4on methods • Public : Human health, Nutri4onal value of food, Obesity
Measuring sustainability in the food supply chain • Various measures: • Food miles • Lifecycle sustainability impacts • Farm economic cos4ng • Energy accoun4ng in product lifecycles • Ecological footprint analysis • Mass balance • Farm sustainability indicators • Useful references: • Seuring, S. and Muller, M. (2008) From a literature review to a conceptual framework for sustainable supply chain measurement. Journal of Cleaner Produc4on, 16(15): 1699-1710. • Sonesson, U., Belrin, J. and Ziegler, F. (2010) Environmental Assessment and Management in the Food Industry. Woodhead Publishing. • Yakovleva N. Editorial introduc4on: Measuring the sustainability of the food system. Journal of Environmental Policy and Planning 2007, 9(1), 1-3.
Sustainability benchmarking using AHP 1) To develop indicators that reflect three dimensions of sustainability – environmental, social and economic following a concept of triple boVom line 2) To apply sustainability indicators to various supply chain stages from produc4on to retail 3) To incorporate strategic sustainability target selng through scaling indicators according to desirability of sustainability performance 4) To determe rela4ve importance between indicators across sustainability dimensions and supply chain stages using AHP
Developing indicators for measuring sustainability in the food supply chain • Cover stages of food supply chain - agricultural produc4on, food manufacturing/processing, food wholesale, food retail, food services and domes4c consump4on • Captures three dimensions of sustainability: economic, social and environmental • Provide the means for comparing sustainability effects of different strategies in the food supply chain • Useful reference – Bell,S. and Morse, S. (2008) Sustainability indicators: measuring the immeasurable? Routeldge: London.
Sustainable development objec=ve – measurement criteria - indicators • Sustainable development objec4ve • Measurement criteria (Specific indicator) • Promo4on of economic growth • Contribu4on of the industry to na4onal economy (Contribu4on to GDP, £, %, Produc4vity, £ per year) • Improvement of labour standards • Occupa4onal health and safety (No. of health and safety incidents) • Reduc4on of resource use • Energy use (Energy used, tonnes per year; Renewable energy vs. non renewable energy, %) • Water use (Water used, tonnes per year; Reusable water vs. fresh water, %)
Possible indicators for measuring sustainability in FSC Stage Economic Social Environmental Agriculture Output Employment Environmental reporting Productivity Average wages Animal welfare Profitability Hazardous substances Energy use Market Health and safety Water use Imported vs. domestic Fair trade Packaging use Distribution of imports Waste Harvest loss Variety of breeds Processing Output Employment Environmental reporting Productivity Average wages Energy use Profitability Hazardous substances Water use Market Health and safety Packaging use Imported vs. domestic Fair trade Waste Distribution of imports Food loss Distribution Output growth Employment Environmental reporting Labour productivity Average wages Energy use Profitability Hazardous substances Packaging use Market Health and safety Waste Fair trade Food loss Consumption Access to food Fresh vs. processed foods Food wasted Fair trade Waste
Chosen sustainability indicators • Final set of 9 indicators is selected for the framework, three per dimension • In total 45 indicators Supply chain stage Environmental Social Economic Agriculture Energy consump4on Employment Labour produc4vity Food processing Water consump4on Wages Market concentra4on Food wholesale Waste arising Employee gender ra4o Import dependency Food retail Food catering
Data collec=on (data for 2002) Indicators Units of Chicken Potatoes Food & drink UK measurement manufacturing manufacturing industry Number of enterprises 107 60 7,535 164,366 Data collec4on: Total output £000 2,063,000 1,400,000 67,576,000 531,081,000 GVA £000 467,000 585,000 19,643,000 179,061,000 Sta4s4cal • GVA per workforce £ 23,350 53,182 40,252 45,160 informa4on from Large enterprises, turnover + % 37% 27% 15% 7% DEFRA on the £5m agricultural sector Imported vs. domestic % 22% 7% 15% 26% ONS for the food • Total employment People 20,000 11,000 488,000 3,965,000 sector and retail Average annual wages per £ per year 16,800 19,273 18,193 20,635 person Male vs. female full-time % 73% 62% 70% 63% employment Average purchase of energy £000 per 794 1,535 634 484 enterprise Average purchase of water £000 per 121 208 67 27 enterprise Average cost of sewage and £000 per 257 299 133 43 waste disposal enterprise
Scoring the indicators (from 0 to 6) 0 1 2 3 4 5 6 n/a Very poo Poor Fair Average Good Excellent Productivity (GVA per workforce, n/a 0 12.0 24.0 36.0 48.0 60.0 thousand pounds) Market concentration (% of large n/a 40.0 32.0 24.0 16.0 8.0 0 enterprises, turnover +£5m) Trade importance (import n/a 100 80 60 40 20 0 dependency, %) 0 4 8 12 16 20 Employment (Employees per n/a enterprise, number of people) Wages (Average gross wages per n/a 0 5.4 10.8 16.2 21.6 27 employee, thousand pounds) 100 90 80 70 60 50 Gender balance (Male vs. female n/a full-time labour) Energy use (Purchase of energy per n/a 1000 800 600 400 200 0 enterprise, thousand pounds) 80 64 48 32 16 0 Water use (Purchase of water per n/a enterprise, thousand pounds) Waste (Cost of sewage and waste n/a 100 80 60 40 20 0 disposal per enterprise, thousand pounds)
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