Design of Key Performance Indicators (KPI) for Sustainable Supply Chain Management (SSCM) Palm Oil Industry in Indonesia

Abstract

This paper aims to design key performance indicators (KPIs) for evaluating sustainable supply chain management (SSCM) for palm oil processing industry in Indonesia. Supply chain sustainability is the management of environmental, social and economic impacts, and the encouragement of good governance practices, throughout the lifecycle of goods and services. The method in designing KPIs using a triangulation method, ie combining of theory (literature study) with field surveys and validate with the opinion of the expert (expert judgment) as well as compatibility with existing regulations (Indonesian sustainable palm oil / roundtable on sustainable palm oil). There are 29 proposed KPIs for measuring SCM’s sustainable palm oil in Indonesia based on literature and expert judgment. In order to obtain a more precise performance, then the importance level of KPI will be measured using Analytic Hierarchy Analysis (AHP) method. According to the preferences of some managers of palm oil using AHP method showed that the economic factor is the most dominant indicator (62,92%), followed by environmental (18,93%) and social factors (18,15%). In subsequent studies, the results of the KPIs will be used to measure the index of sustainability in the palm oil’s supply chain industry in Indonesia.