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Keywords Abstract
sustainable manufacturing This paper identifies critical indicators for sustainable manufacturing that could be adopted in sustainability assessment at firm level.
sustainability indicators Previous works in literature suffered from either lack of being comprehensive or being operational or both. The manufacturing
sustainability assessment indicator set of the US NIST framework was used because of its detailed and wide-ranging exposition of the triple-bottom line. The
triple-bottom line proposed approach is to attach priorities on the elements of the NIST framework in order to prioritize sustainability indicators.
Analytic Hierarchy Process Following the hierarchical structure of the framework, analytic hierarchy process (AHP) was adopted in this work. Three domain
decision-makers who have sufficient international exposure on manufacturing policy development and experience in managing
manufacturing firms were asked to elucidate judgments on the elements of the framework based on the context of the AHP. The
most critical indicators in sustainable manufacturing are presented in this work. Results show that socio-economic indicators are
highly relevant in sustainable manufacturing.
History Received 26 December 2014 | Revised 17 March 2015 | Accepted 27 April 2015
INTRODUCTION
Current and emerging issues of sustainability have become of sustainability reporting [6] following the GRI framework
the motivations of various government institutions, legislative recently proposed in practice. Lodhia and Martin [7] argued that
bodies, industries, corporations and businesses in policy-making the vital aspect of initiating sustainability reporting process is a
and strategic decision-making. These issues have radically more focused set of indicators for organizations. It is also widely
changed the way how decisions, which were previously focused pronounced that the use of sustainability indicators is one of the
on economic returns especially in developing countries [1], must main methods in sustainability evaluation [8] because they
be made such that environmental and social issues are provide a quantifiable approach in measuring various aspects of
simultaneously addressed [2]. However, the vagueness sustainability issues. Various sustainability indicators have been
associated with these issues has been overwhelming not to developed by different institutions at different spatial
mention the difficulty of developing their measurement resolutions. See Joung et al. [4] for a review of these indicator
systems. For instance, manufacturing industry, being a sets. Current literature on the other hand has given significant
significant key to sustainable development [3], has coined the attention on the development of sustainability indicators at firm
term ‘sustainable manufacturing’ to emphasize the manufacture level in the context of sustainability assessment, e.g. corporate
of products with processes that conform to the demands of sustainability indicators [7,9], indicators for product service
sustainability [4]. These prompted manufacturing firms to adopt systems [10] and sustainability indicators appropriate at process
initiatives such as cleaner production, life cycle assessment level [5].
(LCA), design for environment, environmentally conscious Two underlying criteria have to be balanced out in
manufacturing, and green technology toward approaches in developing sustainability indicators especially at the firm level:
larger scales such as sustainable supply chain and industrial being comprehensive and operational. The works of Rahdari and
symbiosis. Two important questions are relevant: (i) Given Rostamy [9] and Lodhia and Martin [7] on sustainability
limited resources, what set of initiatives do manufacturing firms indicators at the corporate level fall short of being
implement to maximize sustainability status? (ii) After adopting comprehensive as social sustainability is scarcely addressed. On
these approaches, how is sustainability evaluated? These the other hand, indicators at the process level proposed by
require holistic sustainability assessment approaches. Sundin et al. [10] and Linke et al [11] are limited only in focus.
One particularly famous approach in literature is by the use Widely-known sustainability indicators reviewed by Joung et al.
of sustainability indicators. These indicators can capture the [4] were highly comprehensive but the issue of being
three dimensions of sustainability, i.e. environmental operational was at stake. Bordt [12] provided a map on widely-
stewardship, economic growth and social well-being, on various known indicators and argued that the National Institute of
levels and at different resolutions, e.g. companies, facilities, Standards and Technology (NIST) framework later presented by
processes and products [5] as well as in larger spatial scales such Joung et al. [4] is characterized by indicators that are able to
as economic sectors, cities, etc. At the firm level, the use of address product, process and facilities level. These levels are
sustainability indicators is directly associated with the practice inclined to address the issues of sustainability in manufacturing
http://dx.doi.org/10.12776/mie.v14i3-4.444 1
Ocampo L, Vergara VG, Impas C, Tordillo JA, Pastoril J Identifying critical indicators in sustainable manufacturing using analytic hierarchy process (AHP)
at firm level. However, the large number of indicators listed in To address various concerns on the sustainability of
the NIST framework prompts difficulty for firms to monitor all of manufacturing, several approaches spanning management and
these indicators thus making it hardly operational. design and engineering of manufactured products and
To address this issue, this paper aims to prioritize significant manufacturing processes have emerged in literature such as
sustainability indicators in the NIST framework. This is relevant environmental collaboration, life cycle assessment, sustainable
in offering a set of indicators which is comprehensive and product design, and techniques that address materials, energy
operational. Due to the hierarchical structure of the NIST and wastes. Development of these approaches has been
framework, this work adopts an analytic hierarchy process (AHP) regarded as a global concern [22]. See Ocampo and Ocampo
approach proposed by Saaty [13] in attaching priorities to the [23] for this discussion. While these approaches were developed
elements in the structure necessary to identify highly relevant to address a specific aspect of sustainability, assessing their
sustainability indicators. The contribution of this work in the impact at firm level remains a significant issue in current
literature of sustainable manufacturing is the identification of literature. In fact, Ocampo and Clark [24] noted in a case study
significant indicators that could be used in sustainability that the strategies adopted by a manufacturing firm lack a clear
assessment at firm level. direction on which sustainability drivers they attempt to address
in the context of the triple bottom-line. Nevertheless, it has
been pointed out that firms adopting sustainability initiatives
LITERATURE REVIEW yield better product quality, higher market share, and increased
profit and these initiatives are positively related with
SUSTAINABLE MANUFACTURING competitive outcomes [25].
2 http://dx.doi.org/10.12776/mie.v14i3-4.444
Identifying critical indicators in sustainable manufacturing using analytic hierarchy process (AHP) Ocampo L, Vergara VG, Impas C, Tordillo JA, Pastoril J
providing feedback on the progress during the implementation literature is that these indicators must be integrated in industry-
stage of sustainable development, and identifying the specific processes order to provide an understanding of the
advantages and disadvantages of different alternatives to help linkage between the triple bottom-line such that a holistic
determine win–win situations. Joung et al. [4] defined an evaluation of sustainability issues is achieved [7]. With this, a
indicator as “as a measure or an aggregation of measures from number of indicator sets of sustainability have been proposed
which conclusions on the phenomenon of interest can be by international institutions, individual companies and private
inferred”. Use of indicators is one category of sustainability institutions. A review of these indicator sets was done by Joung
assessment tools and techniques [37]. They are useful in et al. [4]. However, identifying a suitable set of sustainability
tracking progress of sustainability over time, identifying indicators remains a main challenge [46]. There are issues
problems for improvement, and identifying issues that may be associated with its use. For example, Lehtonen et al. [48]
overlooked from previous analysis [12]. They are considered as presented trade-offs and ambiguities in relation to the use and
more holistic measurement and important for comprehensive development of sustainable development indicators in policy
firm valuations [38]. processes. With this number of indicator sets, Bordt [12]
Sustainability indicators have been widely used in described a map of these sets in terms of their technical details
sustainability assessment at different spatial resolutions. For and application domain as shown in Fig 1.
instance, Zhou et al. [39] introduced a methodology in
identifying sustainable urbanization indicators by determining
departments in a city who assume responsibilities over key
areas while reviews on urban sustainability indicators were
performed separately by Braulio-Gonzalo [40] and by Michael et
al. [41]. Domingues et al. [42] developed a conceptual
framework to define a sustainability label for local public
services by adopting the criteria of EU Ecolabel initiative for
environmental aspects and the criteria of Global Reporting
Initiative (GRI) for other sustainability aspects. Agol et al. [43]
explored the challenges and opportunities in the application of
sustainability indicators for impact evaluation of development
and conservation projects in developing countries. Dizdaroglu
[36] proposed micro-level urban ecosystem indicators for
monitoring the sustainability of residential developments. Since Figure 1 A map of different indicator sets showing technical details
against application domains
development of these indicators are quite expensive, Rivera et
al. [44] interestingly developed text mining framework to
Fig 1 shows that the US National Institute of Standards and
identify sustainability indicators from digital news articles with a
baseline sustainability reports in a particular locality. Technology (NIST) framework has high technical details that are
applicable to product and process applications. These domains
Current literature on the other hand has given ample
attention on the development of sustainability indicators at firm constitute the core of sustainable manufacturing as described in
its definition. This makes the framework more appealing and
level in the context of sustainability assessment. With limited
resources, sustainability indicators provide firms an approach appropriate to manufacturing at firm level. The complete
for analyzing sustainability. Firms can assess their actual indicator set of the NIST framework was published by Joung et
situation with the indicators, raise their awareness and set their [4]. The strength of this framework is in its hierarchical
goals [45]. Rahdari and Rostamy [9] developed a general set of representation of the triple bottom-line with significant breadth
and depth. The framework is the result of a careful integration
sustainability indicators at the corporate level. Particularly
applicable in small and medium enterprises (SMEs), Tan et al. of eleven widely known indicators with a total of 212 indicators:
77 from environmental stewardship, 23 for economic growth,
[46] developed a 40-indicator framework from internationally-
known indicator frameworks. Lodhia and Martin [7] developed and 70 for social well-being dimension, 30 for performance
management and 12 for technological advancement
company specific corporate sustainability indicators (CSI) and
investigated their practical application and appropriateness to a management. The repository of these indicators is found in
certain company and its stakeholders. Sundin et al. [10] NIST’s Sustainable Manufacturing Indicator Repository (SMIR)
identified a set of indicators appropriate in developing product website. This framework is used in current literature [2,49-50].
service systems (PSS). These indicators were then used in However, Roca and Searcy [51] noted that few studies have
focused on developing general sets of sustainability indicators.
sustainability assessment or as a part of firm’s measurement
system. For example, Nappi and Rozenfeld [47] attempted to While generality of sets is important, Sundin et al. [10]
emphasized that indicators must be adjusted to each company’s
incorporate sustainability indicators in firms’ performance
measurement system. On higher resolution, Linke et al. [11] need and to limit the number of indicators as less as possible to
minimize extra work required in evaluating and monitoring
identified relevant sustainability indicators and used them in
assessing sustainability in process level and particularly in them. Thus, the challenge now is to identify critical indicators of
finishing operations based on process performance and part sustainable manufacturing without losing too much on the
quality [5]. generality of these indicators. This is significant as it determines
The strength of sustainability indicators lies in providing the limited number of indicators that firms must monitor in
order to promote better sustainability. This supports resource
better simplification, quantification, analysis and
communicating information from the perspectives of the triple allocation decisions and policy development at firm level. The
approach promoted in this paper is to identify the critical
bottom-line. Rahdari and Rostamy [9] emphasized that various
studied have tried to develop industry specific sets of indicators identified by the NIST framework.
sustainability indicators. The general contention in current
http://dx.doi.org/10.12776/mie.v14i3-4.444 3
Ocampo L, Vergara VG, Impas C, Tordillo JA, Pastoril J Identifying critical indicators in sustainable manufacturing using analytic hierarchy process (AHP)
k
k
aij aijk (1)
METHODOLOGY
wihere aij iss the aggregated judgment, k is the decision-
ANALYTIC HIERARCHY PROCESS maker’s importance to the decision making process with
k 0 and k 1 . The values of aij i , j form the pairwise
Generally, the procedure of AHP can be described as follows: k
comparisons matrix.
1. Structuring the decision problem In pairwise comparisons, reciprocity is maintained. Priority
vectors (w) are obtained from the pairwise comparison matrix
In AHP, decision problems are structured hierarchically in a top- (A) by solving an eigenvalue problem in the following equation:
down approach [13]. Oftentimes in many selection problems,
there is an explicit definition and representation of goal, criteria Awmax w (2)
and alternatives components. In various cases, criteria
component is described in more than two levels so that further
where max is the maximum eigenvalue of the positive
details of criteria are explicitly presented in the decision
structure. The decision of the inclusion of components and reciprocal square matrix (A). The approach also provides a way
alternatives is usually carried out either through a critical review to measure the consistency of judgments in the pairwise
of literature with regard to the facets of the decision problem or comparison matrix. When decision-making in the pairwise
through an expert or group of experts who have sufficient comparisons matrix is consistent max n ; otherwise, max n
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Identifying critical indicators in sustainable manufacturing using analytic hierarchy process (AHP) Ocampo L, Vergara VG, Impas C, Tordillo JA, Pastoril J
where n is the number of elements being compared. The all parents for each element in the lower level. This is referred
Consistency Index (CI), as a measure of degree of consistency, to as the distributive mode of the AHP. This can be represented
was calculated using the formula in the form for two levels in a hierarchy
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Ocampo L, Vergara VG, Impas C, Tordillo JA, Pastoril J Identifying critical indicators in sustainable manufacturing using analytic hierarchy process (AHP)
6 http://dx.doi.org/10.12776/mie.v14i3-4.444
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Ocampo L, Vergara VG, Impas C, Tordillo JA, Pastoril J Identifying critical indicators in sustainable manufacturing using analytic hierarchy process (AHP)
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