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An integrated framework for sustainable supplier selection and evaluation in supply chains

Luthra, Sunil, Govindan, Kannan, Kannan, Devika, Mangla, Sachin Kumar, Garg, Chandra Prakash
Journal of cleaner production 2017 v.140 pp. 1686-1698
automobiles, business enterprises, expert opinion, managers, markets, occupational health and safety, product quality, professionals, selection criteria, stakeholders, supply chain, India
Due to increased customer knowledge and ecological pressures from markets and various stakeholders, business organizations have emphasized the importance of greening and sustainability in their supply chain through supplier selection. Therefore, a systematic and sustainability-focused evaluation system for supplier selection is needed from an organizational supply chain perspective. This work proposes a framework to evaluate sustainable supplier selection by using an integrated Analytical Hierarchy Process (AHP), ViseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR), a multi-criteria optimization and compromise solution approach. Initially, 22 sustainable supplier selection criteria and three dimensions of criteria (economic, environmental, and social) have been identified through literature and experts' opinions. A real world example of an automobile company in India is discussed to demonstrate the proposed framework applicability. According to the findings, ‘Environmental costs,’ ‘Quality of product,’ ‘Price of product,’ ‘Occupational health and safety systems,’ and ‘Environmental competencies’ have been ranked as the top five sustainable supplier selection criteria. In addition, out of the five sustainable supplier's alternatives, supplier number ‘three’ got the highest rank. The work presented in this paper may help managers and business professionals not only to distinguish the important supplier selection criteria but also to evaluate the most efficient supplier for sustainability in supply chain, while remaining competitive in the market. Sensitivity analysis is also conducted to test the proposed framework robustness.