A green supplier selection model for high-tech industry

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Abstract

With growing worldwide awareness of environmental protection, green production has become an important issue for almost every manufacturer and will determine the sustainability of a manufacturer in the long term. A performance evaluation system for green suppliers thus is necessary to determine the suitability of suppliers to cooperate with the firm. While the works on the evaluation and/or selection of suppliers are abundant, those that concern environmental issues are rather limited. Therefore, in this study, a model for evaluating green suppliers is proposed. The Delphi method is applied first to differentiate the criteria for evaluating traditional suppliers and green suppliers. A hierarchy is constructed next to help evaluate the importance of the selected criteria and the performance of green suppliers. Since experts may not identify the importance of factors clearly, the results of questionnaires may be biased. To consider the vagueness of experts’ opinions, the fuzzy extended analytic hierarchy process is exploited. With the proposed model, manufacturers can have a better understanding of the capabilities that a green supplier must possess and can evaluate and select the most suitable green supplier for cooperation.

Introduction

With increasing government regulation and stronger public awareness in environmental protection, firms today simply cannot ignore environmental issues if they want to survive in the global market. In addition to complying with the environmental regulations for selling products in certain countries, firms need to implement strategies to voluntarily reduce the environmental impacts of their products. The integration of environment, economic and social performances to achieve sustainable development is a major business challenge for the new century (Verghese & Lewis, 2007).

Environmental management is becoming more and more important for corporations as the emphasis on the environmental protection by organizational stakeholders, including stockholders, governments, customers, employees, competitors and communities, keeps increasing. Programs such as design for the environment, life cycle analysis, total quality environmental management, green supply chain management and ISO 14000 standards are popular for environmentally conscious practices (Sarkis, 1998). Both proactive and reactive methods have been implemented to protect the environment. For instance, environmentally conscious design and manufacturing (ECD&M) is a proactive method that aims to reduce the resource consumption, hazardous emission and energy usage by reengineering the design and manufacturing process and selecting appropriate materials (Zhang, 2004). On the other hand, end-of-life (EoL) strategy and management is a reactive method that provides technology and methodologies to handle the wastes which are already present (Zhang, 2004).

As environmental awareness increases, buyers today are learning to purchase goods and services from suppliers that can provide them with low cost, high quality, short lead time, and at the same time, with environmental responsibility. Legislative and regulatory initiatives have also emerged in developed countries, especially in Europe and Japan. Some pioneer enterprises have already joined the trend of green supply chain long before the EU environmental orders were enforced. In order to have a long-term success in the global market, a firm not only should stress on financial terms in evaluating suppliers, but also should take various criteria, including pro-environmental concerns, into consideration. Therefore, green procurement approach must be compliant with customers, laws and regulations, and a green supplier evaluation system is necessary for a firm in determining the suitability of a supplier as a partner in the green supply chain.

The rest of this paper is organized as follows. Section 2 reviews some recent works on environmental management and green supplier evaluation. Analytic hierarchy process (AHP), fuzzy set theory and fuzzy-extended AHP (FAHP) are presented in Section 3. Section 4 proposes a FAHP model applied to evaluate green suppliers. Some concluding remarks are made in the last section.

Section snippets

Environmental management

People are increasingly aware of the strong links between the economy and the environment these days. Exploiting the synergies between the two is essential to maximize both well-being and economic growth. As a result, many countries have started to enforce environmental legislations and regulations for controlling the use of products, processes and wastes that may be detrimental to the environment. For instance, EU has set a range of environmental policies such as RoHS and WEEE. The RoHS

Analytic hierarchy process (AHP)

The analytic hierarchy process (AHP) was first proposed by Saaty in 1971, and it is one of the most commonly used methods for solving multiple-criteria decision-making (MCDM) problems in political, economic, social and management sciences (Saaty, 1980). Through AHP, opinions and evaluations of decision makers can be integrated, and a complex problem can be devised into a simple hierarchy system with higher levels to lower ones. The qualitative and quantitative factors can then be evaluated in a

Green supplier selection model

Many works have been done on issues about supply chain and suppliers; however, limited literatures are found on green supplier and green supply chain until recent years. While some recent studies have stressed on the green supplier selection problem, they considered environmental attributes solely, but not the traditional criteria. In this paper, a comprehensive green supplier selection model is proposed by considering the important criteria in various aspects for evaluating green suppliers.

Case study

Global environmental concern is a reality, and an increasing attention is focusing on the green production in various industries. Regarding the current production facilities in TFT–LCD industry, many different materials are procured and included in the products. A TFT panel (with TFT-array substrate, liquid crystal and color filter substrate), a driving-circuit unit (with LCD driver IC (LDI) chips, multi-layer PCBs and driving circuits) and a backlight & chassis unit (with backlight, lamp,

Conclusion

Environmental protection and sustainable development are getting more and more attention in industry. In order to extend the product life cycle and to pursue enterprise perpetuity, a firm needs to emphasize environment protection and green production as a critical part of its social responsibility. A good green supplier selection model in a dynamic competitive and regulatory environment can help lessen the environmental and legal risks and increase the competitiveness of a firm. This paper

Acknowledgement

This research is supported in part by National Science Council, Taiwan, under Grant NSC 96-2416-H-216-002.

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