Assessing social performance in supply chain design and planning through a monetization approach

Abstract

Sustainable development is today a major concern, and within this supply chain’ environmental and social performances need to be considered. The social pillar of the supply chain is not easy to measure, and its quantification is a researcher's challenge. In addition, quantifying the social impact of a monetary unit, easily understood by decision‐makers, is an important step towards achieving global sustainable supply chain performance. This work intends to contribute to this challenge and develops a monetization approach for assessing supply chain's social performance, considering three main relevant social indicators: job creation, accidents and training. These are then integrated into an optimization‐based decision tool that can be used to design and plan a supply chain based on an informed decision. This operation research–based tool considers the economic and the social pillars independently or simultaneously, allowing the development of different analyses to reflect on the different trade‐offs that could be considered when designing and planning sustainable supply chains. A case study is utilized to demonstrate the tool's applicability, and a number of conclusions and insights are provided on how to strengthen supply chain sustainability.