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Development of a Sustainability-Oriented KPI Selection Model for Manufacturing Processes

Author

Listed:
  • Kristo Karjust

    (Department of Mechanical and Industrial Engineering, Tallinn University of Technology, Ehitajate tee 5, 19086 Tallinn, Estonia)

  • Marmar Mehrparvar

    (Department of Mechanical and Industrial Engineering, Tallinn University of Technology, Ehitajate tee 5, 19086 Tallinn, Estonia)

  • Sergei Kaganski

    (Department of Mechanical and Industrial Engineering, Tallinn University of Technology, Ehitajate tee 5, 19086 Tallinn, Estonia)

  • Tõnis Raamets

    (Department of Mechanical and Industrial Engineering, Tallinn University of Technology, Ehitajate tee 5, 19086 Tallinn, Estonia)

Abstract

Modern manufacturing systems operate in a global and competitive environment, where sustainability has become a critical driver for performance. Performance measurement, as a method for monitoring enterprise processes, plays a central role in aligning operational efficiency with sustainable development goals. Recently, a number of different frameworks, systems, and methods have been proposed for small and medium enterprises. Key performance indicators (KPIs) are known to be powerful tools which provide accurate information regarding bottlenecks and weak spots in companies. The purpose of the current study is to develop an advanced KPI selection/prioritization model and apply it in practice. The initial set of KPIs are obtained based on a literature review. The expert’s knowledge, outlier methods, and optimization of the enterprise analysis model (EAM) are utilized for reducing the initial set of KPIs. A fuzzy analytical hierarchy process (AHP) is implemented for prioritization of the criteria. Five different MCDM (multi-criteria decision-making) algorithms are implemented for prioritization of the KPIs. The recently introduced RADAR method is extended to the fuzzy RADAR method, providing a flexible approach for handling uncertainties. An analysis and comparison of the rankings obtained by utilizing five MCDM algorithms is performed. The prioritized KPIs provide valuable input for improving KPIs with the highest impact in particular small and medium-sized enterprises (SMEs) when implementing sustainability-aligned performance metrics.

Suggested Citation

  • Kristo Karjust & Marmar Mehrparvar & Sergei Kaganski & Tõnis Raamets, 2025. "Development of a Sustainability-Oriented KPI Selection Model for Manufacturing Processes," Sustainability, MDPI, vol. 17(14), pages 1-21, July.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:14:p:6374-:d:1699779
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    References listed on IDEAS

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    1. Carolina Cruz Villazón & Leonardo Sastoque Pinilla & José Ramón Otegi Olaso & Nerea Toledo Gandarias & Norberto López de Lacalle, 2020. "Identification of Key Performance Indicators in Project-Based Organisations through the Lean Approach," Sustainability, MDPI, vol. 12(15), pages 1-19, July.
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    3. Md. Abdul Moktadir & Ashish Dwivedi & Akib Rahman & Charbel Jose Chiappetta Jabbour & Sanjoy Kumar Paul & Razia Sultana & Jitender Madaan, 2020. "An investigation of key performance indicators for operational excellence towards sustainability in the leather products industry," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3331-3351, December.
    4. Chang, Da-Yong, 1996. "Applications of the extent analysis method on fuzzy AHP," European Journal of Operational Research, Elsevier, vol. 95(3), pages 649-655, December.
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