Measuring the Environmental Impact: Key Performance Indicators for Assessing Closed-Loop Supply Chain Sustainability

Abstract

This research addresses the critical need for effective measurement and assessment of environmental impact within closed-loop supply chains, driven by the escalating concerns over resource depletion and environmental degradation. The growing recognition of the significance of sustainable practices has prompted the development of key performance indicators (KPIs) tailored to evaluate closed-loop supply chain sustainability. The problem at hand revolves around the lack of a standardized framework for assessing the environmental impact of closed-loop supply chains, hindering the ability of organizations to gauge their progress toward sustainable practices. This manuscript proposes a comprehensive set of KPIs specifically designed for this purpose, considering the unique characteristics of closed-loop systems. The methodology employed involves a thorough review of existing literature on sustainable supply chain practices, life cycle assessments, and environmental impact measurement. Additionally, insights from industry experts and case studies of successful closed-loop supply chain implementations contribute to the development of robust KPIs. The key findings underscore the importance of recycling rates, reuse metrics, waste reduction initiatives, and energy efficiency measures in determining the sustainability of closed-loop supply chains. The manuscript emphasizes the significance of adopting a life cycle assessment approach and ensuring traceability of materials to effectively manage environmental impact throughout the supply chain. By adhering to these KPIs, organizations can not only evaluate their environmental performance but also implement targeted strategies for continuous improvement, ultimately contributing to a more sustainable and resilient global supply chain.