Benchmarking Sustainable Manufacturing: A DEA-Based Method and Application

Abstract

In past decades, many manufacturing enterprises have followed the business model of productivity maximization, in which achieving maximum profit using limited resources is the business goal. Although this industrial strategy may make profit, it can be detrimental to the long-term social welfare. Industrial regulations require that enterprise should be responsible for the natural environment and the health of their employees while achieving their business goals. This presents a complex problem involving the trade-off between ecology and economy so that an efficient strategic decision support method is needed. Since the value-added process of a manufacturing company encompasses both desirable and undesirable outputs, in this study we use a data envelopment analysis-based model to measure performance sustainability. In it, energy, water, and manpower are considered as input resources, meanwhile CO2 emissions, wasted water, chemical compounds, and laborers’ injuries are considered as bad outputs. The proposed approach is applied to a global chemical manufacturing company to benchmark the sustainability of its production sites located in Asia. Based on the benchmarking results, the theoretical and practical implications are discussed.