Measurement of green productivity and its improvement

The measurement framework of the green productivity (GP) of a product system, or process, and its improvement are discussed. Two types of GP indicators are developed to help understand the practical concept and executive approaches of GP, using environmental management tools such as life cycle assessment (LCA) and total cost assessment (TCA). GP index is defined as the ratio of productivity of a system to its environmental impacts. This index is intended for estimating the GP performance of an existing product or process and comparing it with other equivalents. Specifically, the GP index is a measure of the GP performance of a product system throughout its entire life cycle. The “overall” GP index can be divided into a “direct” GP index and an “indirect” GP index which are intended to analyze the GP performances of direct production processes and indirect upstream processes, respectively. For internal managerial decision, GP ratio is developed to select one alternative out of a list of contenders in order to improve the GP performance of an existing system. In addition, GP portfolio is drawn up to check the strengths and weaknesses of alternatives. A case study of a petrochemical company in Korea is provided as an example for illustrating the feasibility of the indicators developed here (GP index and GP ratio) for the measurement of GP and its improvement.