Selecting the Most Appropriate Supplier in the Green Environment: A Hybrid Multi-Criteria Decision-Making Application

Introduction

Nowadays, organizations started to become more environmentally-conscious in their supply chain activities. The greening process adds supply chain practices new way of thinking according to green standards. When compared with the traditional one, green supply chain management (GSCM) is concerned with greening in design of systems, procurement, logistics, operational, organizational, and marketing activities.

In a broader definition, green supply chain management (GSCM) aims to reduce or eliminate the environmental impacts of the products through integrating the greening process to the supply chain activities, decreasing the usage of harmful materials, and improving the concepts of recycling and reuse (Diabat et al., 2013). According to the Kazancoglu et al. (2018), GSCM is an optimal balance of environmental, economic, operational, logistics, organizational, and marketing performance indicators. In order to assess the performance of the GSCM, the companies need to consider this holistic view.

In a narrower and more specific definition, Jabbour and de Sousa Jabbour (2016) are more focused on the procurement activities, emphasizing especially recycling, and reusing. Shi et al. (2012) emphasized GSCM as the adoption of green procurement activities, and especially highlighted the purchasing of harmless materials, reducing the usage of the materials, and minimizing the environmental impacts. Within this perspective, green procurement is an activity aiming to decrease, or eliminate the waste and pollution in purchasing activities. When decision-makers deal with procurement from the suppliers, they have to take into account the environmental factors in association with traditional factors such as cost, quality, performance (Eltayeb et al., 2011). Therefore, the main purpose of managers responsible for green procurement activities is to select the suppliers considering the environmental factors.

Supplier selection can be admitted as one of the most tedious processes of the organizations, because the process is a complex decision-making problem which involves many conflicting criteria. Since the main aim is to increase the capital gain while improving the quality levels, the traditional supplier selection frameworks are mainly involving quality, cost, and performance criteria. In addition, according to Govindan et al. (2017), the environmentally-friendly, green products help the organizations enhance the customer satisfaction, and gain competitive advantage. Also, various environmental and social pressure from stakeholders oblige organizations to take into account the environmental considerations. Therefore, some environmental criteria have to be added to the supplier selection framework.

The objectives of this chapter are 1) to identify the relevant criteria for green supplier selection process, 2) determine the causal relationships between the criteria, 3) establish the importance weights of relevant criteria, and 4) select the best supplier with respect to the criteria weights. Within this context, in this chapter, firstly, a comprehensive list of the criteria for green supplier selection was determined. Then, fuzzy Decision Making Trial and Evaluation Laboratory (DEMATEL) method was used to identify the causal relationships between the main criteria. Then, fuzzy Analytic Network Process (ANP) method was used to find the respective criteria weights. Finally, fuzzy VlseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR) method was used to rank the various supplier alternatives to select the best one.

The application was conducted in cement manufacturing company. The main reason for selecting this company to implement green supplier selection process is the attention paid for non-renewable, non-recyclable, and environmentally harmful raw materials. Also, the company is trying to maximize their efforts to prevent pollution. They control all wastes since 2005 through adapting Waste Management System. In addition, the company is involved in some responsible and sustainable business activities. In cement manufacturing plants, the usage of large amounts of non-renewable, non-recyclable, and environmentally harmful raw materials causes large amounts of carbon dioxide; therefore, the need to reduce possible emissions arises. Therefore, there is a need for an analytic approach, which considers all relevant factors for supplier selection process.