Sustainable Supplier's Management Using Differential Evolution

Sustainable Supplier's Management Using Differential Evolution

Sunil Kumar Jauhar (Indian Institute of Technology - Roorkee, India) and Millie Pant (Indian Institute of Technology - Roorkee, India)
DOI: 10.4018/978-1-4666-9885-7.ch012
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In today‘s world, highly competitive global operating environment have much concerns as well as attention is focused in the direction of climatic changes and additional ecological concerns. These concerns are not only articulated by campaigners or researchers, but by the common man as well, which has directed to the ultimatum for corporations to take action for sustainability. The public gradually holds corporations responsible for ecological misconduct in their supply chains. To counterbalance that threat companies, start fresh approaches to develop sustainable supply chain. In spite of that suppliers often are unsuccessful to appropriately contribute fresh approaches. This paper presents an approach which evaluates sustainable supplier's performance in supply chain management (SCM) using Differential Evolution to select the efficient suppliers providing the maximum fulfillment for the sustainable criteria determined. Finally, three illustrative cases on automotive & pulp and paper industry validate the application of the present approach.
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Sustainable supplier selection (SSS) is a vital segment of sustainable supply chain management (SSCM). Now a day, in view of the growing awareness concerning sustainability in business firm; the SSS would be the vital element in the process of managing a sustainable supply chain. Developing an efficient and robust sustainable supply chain is a crucial task for the success of a business firm. One of the most significant factors that help in building a strong sustainable supply chain is the SSS process. Traditionally, only the management aspects like lead time, quality, price, late deliveries, rate of rejected parts and service quality of the supply chain were considered for selecting a potential supplier. However, with the growing environmental issues researchers are also paying attention to factors like greenhouse effect, reusability, carbon-di-oxide (CO2) emission etc. jointly known as Carbon foot printing. The resulting problem is called ‘sustainable supplier selection’, where a balance is maintained between the management and environment concerns.

Various SSS methodologies have been suggested by the practitioners in earlier, to find a solution to the SSS problem. A SSS problem fundamentally is a multi-criteria practice. It is a judgment of tactical significance to enterprises. It is natural that for a particular product, huge amount of suppliers/ vendors is available in the market that fulfils some preliminary criteria. However, the real task is to determine the most suitable set of suppliers (or key suppliers) subject to management as well as environmental aspects.

Now, it is the duty of the purchasing managers to identify the most suitable clusters of sustainable suppliers for their product. Evaluation and above selection of sustainable suppliers is a complex process and depend on a large number of qualitative as well as quantitative factors to ensure a cost effective model without compromising with the quality. The nature of this decision usually is difficult and unstructured. Optimization practices might be useful tools for these types of decision-making problems. During last few years, Differential Evolution (DE) has arisen as a dominating tool used for solving a variety of problems arising in numerous fields. Differential evolution (DE) algorithm proposed by Stron and Price (1995).It is a population set based evolutionary algorithm that has been applied successfully to a wide-ranging issue (Plagianakos et al., 2008;Wangand Jang, 2000; Joshi and Sanderson, 1999;Ilonen et al., 2003; Ali et al., 2012).

The motive of this paper is to bring about to SSS approach. For this purpose, we present an approach to solve the multiple-criteria SSS problem with the application of DE, for Data envelopment analysis (DEA) based mathematical model, and validated this approach with the help of three cases on automotive &pulp and paper industry. In the current study we present first case used DE to solve the traditional supplier selection problem of automobile industry without considering environmental issues and then second and third case used DE for solving the supplier selection problem of automobile &pulp and paper industry with considering environmental issues (called as SSS problem).

This paper is organized in nine sections. Subsequent to the introduction in section one, the SSCM in automotive industry, sustainable supplier selection (SSS) and methodology are briefed in second, third and fourth sections respectively. Section fifth describes the Mathematical model formulation with DEA used in this article. Section sixth describes the DE algorithm for SSS and two cases on automotive industry discussed in seventh section, in addition the third case on pulp and paper industry discussed in eighth section. Finally, conclusion with summary drawn from the current research is given in last section.

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