Performance Measurement Systems for Circular Supply Chain Management: Current State of Development

Abstract

With circular supply chain management, the need arises to measure circularity as well as economic, environmental, and social performance. This places higher demands on performance measurement systems for circular supply chain management. The current paper studies the extent to which performance measurement systems for circular supply chain management can meet these higher demands. To gain this insight, a systematic literature review is conducted. Moreover, existing definitions of circular supply chain management are reviewed and an improved definition of circular supply chain management is developed. The current paper finds, among other things, that the literature on performance measurement systems for circular supply chain management is scarce. Moreover, most of the available performance measurement systems for circular supply chain management have not been tested in practice and are therefore still in an early phase of development. Furthermore, none of the available performance measurement systems for circular supply chain management meet the requirements for effective performance measurement systems. More specifically, including interdependencies between performance measures is a requirement that none of the performance measurement systems for circular supply chain management can meet. Including interdependencies would better support the complex decision making that arises in circular supply chain management and enable one to challenge strategic assumptions about the improvement of circularity, economic, environmental, and social performance in parallel.

Key metrics to measure the performance and impact of reusable packaging in circular supply chains

“…However, reuse may present a more sustainable option than remanufacturing, which in turn may be more sustainable than recycling (Stahel, 2013), and so the lack of prioritization with multidimensional indicators, and the lack of focus on reuse and life extension strategies, misses the potential hierarchy for value creation and sustainability in a CE. Vegter et al (2021) conducted a review of 18 performance measurement systems, each consisting of a set of metrics, for CSCM. The authors propose different criteria than Corona et al (2019) for an effective measurement system in CSCM including:…”

“…However, these benefits depend on the characteristics and performance of the reusable packaging system (Goudenege et al, 2013;Accorsi et al, 2014;Zimmermann and Bliklen, 2020). Successful implementation and management of reusable packaging and other CE strategies in supply chains requires the ability to measure and report on progress across different functions and processes (Vegter et al, 2021). Metrics provide information for decision making, controlling the execution of strategy, and reporting to a variety of stakeholders (Neely et al, 1995;Maestrini et al, 2017).…”

“…However, Dai and Tang (2021) argue that supply chain operations should be incorporated into environmental, social, and governance (ESG) measures, and ESG measures should play a central role in supply chain management (SCM) practices (Sarja et al, 2021). The literature on metrics in CSCM is sparse, but Vegter et al (2021) found that performance metrics in CSCM expand on the economic focus in SCM by incorporating elements of circularity, environmental and, currently to a lesser degree, social considerations. Most of these metrics are in early stages of development (Acampora et al, 2017;Walker et al, 2018;Vegter et al, 2021), and despite the variety of R-strategies in a CE, product and enterprise-level metrics currently focus on recycling, remanufacturing, and other EOL strategies rather than reuse and other short-loop strategies (Kristensen and Mosgaard, 2020).…”

“…In order to do so, key metrics are needed to manage the performance of a CSC with reusable packages or other items. However, the literature on metrics in CSCM is sparse (Vegter et al, 2021) and primarily focuses on recycling and other EOL management strategies rather than reuse and product life extension (Saidani et al, 2019;Kristensen and Mosgaard, 2020;De Pascale et al, 2021). Thus, the objectives of this paper are to:…”

Evaluation of the Circular Economy in a Pitahaya Agri-Food Chain

“…On the other hand, CE, such as all other sustainable models, requires not only innovative concepts, but also innovative actors; often, its implementation must be supported by stakeholders to enable changes in policies and decision-making tools [12,13]. In this sense, the adoption of strategies by companies to improve the circularity of the production system also requires collaboration with other companies along the supply chain to achieve the most efficient circular model possible [14,15]. Implementing a CE is not always an easy undertaking, as it often encounters biophysical limits, including high energy requirements for resource recovery and the loss of resource quality [16].…”