Fuzzy-based sustainability evaluation method for manufacturing SMEs using balanced scorecard framework

Sustainability has become a necessity, partly due to the threats created by traditional manufacturing practices, and due to regulations imposed by stakeholders. Performance evaluation is an important component of sustainability initiatives in manufacturing organizations. This study proposes a sustainability evaluation method for manufacturing SMEs using integrated fuzzy analytical hierarchal process (FAHP) and fuzzy inference system (FIS) approach. The performance indicators are identified from literature considering the characteristics of SMEs. Balanced scorecard framework is used to categorize the indicators among its four aspects. The linguistic variables are used to collect the opinions of decision makers about the performance ratings and importance of the aspects and corresponding indicators. The FAHP method is applied to determine the relative weights of measures and indicators. The performance ratings of the organization with respect to indicators and relative weights of indicators are combined to obtain the weighted performance ratings. The weighted performance ratings are considered as inputs to FIS. The hierarchal FIS is applied to derive the overall sustainability performance. Using a case study of manufacturing SME, the sustainability score of the organization was elicited in accordance with this procedure. Consequently, a sensitivity analysis of the proposed method reveals the most important basic indicators affecting overall sustainability, identifying areas which decision makers should place special attention. This method can also assist managers of larger enterprises to assess the effectiveness of their sustainability strategies, especially when dealing with suppliers from the SMEs.