A decision-making model for sustainable supplier evaluation and selection

  • Napat Srinual

Student thesis: Doctoral Thesis

Abstract

With the growing concerns in sustainability, manufacturers have been obliged by various stakeholders to embed environmental and social concerns into their supply chain activities. In recent years, sustainability practises have become a major topic of conversation for automobile manufacturers. One of the necessary components of a car is tyres, and the most important raw material to produce car tyres is rubber. The tyre industry dominates rubber consumption, and Thailand is currently the largest natural rubber producer based on value, accounting for 37% of global production (IRSG, 2021). Although there is a lot of research on other car parts such as gear box, car seat, digital technology, and battery from an academic perspective, tyre rubber still lacks comprehensive knowledge on sustainability. Moreover, tyres are rapidly becoming a new issue in both environment and social, which will affect the automotive industry. This led this research to start not only evaluating and selecting the suppliers’ economic abilities, but also their competencies in environmental and social aspects. Sustainable supplier evaluation and selection is based on well-established criteria that can differ between economic dimensions, environmental dimensions, and social dimensions as selection criteria drive the decision process. The aim of this research is to propose a combined multicriteria decision making model by using Fuzzy Analytic Hierarchy Process (FAHP) and Fuzzy Technique for Order Preference by Similarity to Ideal Solution (FTOPSIS) applied in the sustainable supplier evaluation and selection process in the tyre rubber industry in Thailand. In this research, there are three main objectives: (1) identify the set of main- and sub-criteria in sustainability for supplier evaluation and selection, (2) prioritise the order of main- and sub-criteria for evaluating and selecting sustainable suppliers, and (3) examine and validate a proposed decision-making model of sustainable supplier evaluation and selection. Additionally, this research also aimed to reveal differences in sustainable supplier selection between two tier size of suppliers, Tier 1 large-sized firms (LEs) and Tier 2 small and medium-sized local firms (SMEs). This research provides a framework of the sustainable selection criteria for suppliers in the tyre rubber industry. This framework consists of three main criteria (economic, social, and environment), fourteen sub-criteria level 1, and forty-six sub-criteria level 2. The model is a part of the multiple criteria decision-making (MCDM) model. This combined multicriteria decision making model consists of two parts: sustainable criteria weights determination and LEs and SMEs suppliers ranking. The proposed method combines the strength of the fuzzy set in handling the uncertainty that are associated with human being’s subjective judgement. Fuzzy AHP is applied to obtaining sustainable criteria weight and Fuzzy TOPSIS for suppliers ranking. To achieve the above goals, this research employed a mixed research method. It used qualitative (interviews) and quantitative (questionnaires) research methods. These supplier selection decision makers consisted of fifty managers including purchasing managers, supply chain managers, finance manager, production and quality managers, logistics managers, general managers and chief executive officer with higher level of experience. After analysing the collected data, a result of main criteria weight from the pair-wise comparisons in FAHP showed that the economic criterion was significantly highest with a weight of 41%, environment with 37% and social aspects with a weight of 22%. The social attributes of suppliers in tier 2 local suppliers were the least important selection criteria compared with the economic criteria. However, tier 1 suppliers identified that environmental and social dimensions are more concerned for being sustainability. For the sub-criteria level 1, there was agreement or decision similarity between the two tiers about their importance criteria in the cost and price, the environmental management, financial stability, employee’s welfare and right, and green product. In an opposite way, this research noticed that there were two criteria that had contradictions between the two groups of decision makers. These are ethics and pollution control. Then, for sustainable supplier ranking, Fuzzy TOPSIS is used in this problem area to select the most appropriate sustainable supplier of tyre rubber in Thailand. From twenty suppliers in two tiers, there are three suppliers from tier 1 and two suppliers from tier 2 local. The ranking of them was determined in terms of closeness index values. The result implies that both tier 1 and tier 2 suppliers are likely to take actions to adopt sustainable practices in the tyre rubber industry in Thailand. For sensitivity analysis, the criteria weights and rank of tyre rubber suppliers rarely changed when changing the values of attitudes and fuzzification factors. The results indicated that the proposed multicriteria decision making model is robust. For future research, a comparative study between decision makers from tyre rubber industry and other industries in Thailand and/or other countries that have less of a relationship with the sustainability should consider. Also, it would be beneficial to have government interviewees involved in this study as their insights could help address policy issues or problems of high concern at the country level.
Date of Award10 May 2023
Original languageEnglish
Awarding Institution
  • University Of Strathclyde
SupervisorJorn Mehnen (Supervisor), Kepa Mendibil (Supervisor) & Athanasios Rentizelas (Supervisor)

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