Abstract
The environmental pressure from various stakeholders, particularly in the selection of green suppliers in the industrial sector, is alarming. The companies are realizing the significance of incorporating green practices in their daily operations. This chapter proposes a framework on the criteria of GSCM practices using MCDM analysis to select green suppliers for an Indian electronics company. The authors have collected the data from a set of 10 available suppliers. The authors use fuzzy AHP and fuzzy TOPSIS approach to rank the suppliers based on the decision makers' preferences on the selection of green suppliers using GSCM practices. The three dominating criteria concluded by the results are the commitment of senior management towards GSCM; product design that incorporates three R's policy for component, materials, and energy; abidance with environmental laws and auditing programs. This chapter carries out a comparison between Fuzzy Analytical Hierarchy Process (FAHP) and Fuzzy TOPSIS method to enhance the quality of decision making and validate the rankings.
TopBackground
GSCM develops efficient environmental practices that encourage continuous improvements in the environmental practices of multiple organizations within the supply chain (Vachon and Klassen, 2006). It is the process of amalgamating the environmental concerns into supply chain management by taking into consideration various factors such as material sourcing and selection, product design, manufacturing, delivery of finished products, and the management of product life cycle (Srivastava, 2007) and the environmental issues at every stage of the aforementioned factors (Min and Kim, 2012). The GSCM practices that could be adopted by the suppliers, lack in environmental evaluation. Environmental performance is enhanced in the whole supply chain by suppliers who implement these practices. There are many companies who are struggling with eco-friendly supplier selection. Advancements in the GSCM strategies can help these companies. (Handfield et al., 2002).
In this research work, we have implemented multi-criteria decision making analysis (MCDM) analysis to evaluate best suppliers out of many who follows green practices. Some of those techniques include Analytical Hierarchy Process (AHP) (Noci, 1997; Handfield et al., 2002; Lu et al., 2007; Chiou et al., 2008; Lee et al., 2009; Grisi et al., 2010); Analytic Network Process (ANP) (Hsu & Hu 2009, Büyüközkan & Çifçi, 2010, 2011); the rough set methodology (Bai & Sarkis, 2010a, b); Data Envelopment Analysis (DEA) (Kumar & Jain, 2010); and fuzzy TOPSIS methodology (Awasthi et al., 2010).
Key Terms in this Chapter
Analytical Hierarchy Process (AHP): Developed by Thomas L. Saaty, this multi criteria decision making process makes use of the opinions of experts to find out the priority and calculate the rankings of the alternatives.
Spearman’s Rank Correlation Coefficient: A nonparametric measure of statistical dependence between two variables.
Triangular Fuzzy Number (TFN): A triplet ( m 1 , m 2 , m 3 ) is known as Triangular Fuzzy Number, where “ m 1 ” represents smallest likely value, “m 2 ” the most probable value, and “ m 3 ” the largest possible value of any fuzzy event.
Linguistic Variables: Variables whose values are expressed in linguistic terms using words or sentences of a language. When words or sentences of a language (linguistic terms) are used as variables, they are known as linguistic variables. By the use of a conversion scale, they can be converted to TFN.
Green Supply Chain Management (GSCM): Resource Utilization efficiency and environmental influence are taken into account in this modern supply chain management approach.
Fuzzy Analytical Hierarchy Process (FAHP): To handle the limitations of AHP such as uncertainty in decisions, a fuzzy extension of AHP was developed which is known as fuzzy Analytical Hierarchy Process.
Multi Criteria Decision Making (MCDM): Every alternative is compared with some criteria to decide the rank of alternatives in this methodology.