Developing environmental and social key performance indicators for suppliers: case Wärtsilä

Thumbnail Image

URL

Journal Title

Journal ISSN

Volume Title

School of Business | Master's thesis

Authors

Date

2022

Department

Tieto- ja palvelujohtamisen laitos

Major/Subject

Mcode

Degree programme

Information and Service Management (ISM)

Language

en

Pages

66 +11

Series

Abstract

This master’s thesis aims to develop a set of environmental and social KPIs that can be used to evaluate suppliers’ sustainability performance in the manufacturing industry. Previous literature has identified a variety of different performance indicators for SSCM, but there is a lack of agreement on which are the most appropriate indicators for evaluating suppliers’ sustainability performance. Furthermore, the literature has recognized that the social dimension of sustainability has been researched considerably less compared to the economic and environmental dimensions. The literature review proposes five criteria for developing KPIs along with a list of 15 environmental and 18 social indicators that could be used to evaluate suppliers’ sustainability performance. The thesis is conducted as a single case study done for Wärtsilä, a global company operating in the marine and energy markets. The empirical data was collected through qualitative unstructured interviews, a survey, and the company’s internal documentation. In the qualitative unstructured interviews, five employees from the company’s sustainability and supply management functions participated and discussed the indicators proposed in the literature review. Based on the interviews, the most appropriate environmental and social indicators for the case company along with a description of how to measure the indicators were selected. A survey was then sent to a group of suppliers (n= 22) to get an understanding of which indicators the suppliers are already using and whether the selected indicators could be implemented. The findings indicate that both the environmental and social indicators proposed in the study need to be further analyzed and tested on a larger and more representative sample before the indicators could potentially be implemented by the case company. Nevertheless, the findings give the case company valuable insight into the suppliers’ current sustainability practices and offer an important first step in developing sustainability KPIs for the suppliers. The managerial implications of the thesis shed new light on the development of measurable environmental and social indicators for suppliers in the manufacturing industry.

Description

Thesis advisor

Kauppi, Katri

Keywords

SSCM, sustainability, performance measurement, KPIs

Other note

Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202206193966

Collections

[gradu] Kauppakorkeakoulu / BIZ