A holistic approach to supplier evaluation and order allocation towards sustainable procurement

Procurement process risk and performance: empirical evidence from manufacturing firms

Purpose

This paper employs the positivism paradigm, quantitative approach and explanatory research design. It analyses primary data obtained from manufacturing firms via structured questionnaires and uses the partial least square-structural equation modelling technique to establish the effect of individual procurement process risk on procurement performance.

Design/methodology/approach

Procurement risks are inevitable in manufacturing procurement process; a situation that could undermine the performance of manufacturing firms if not properly managed. Yet, with procurement accounting of about 14–19% of developing countries gross domestic product, the effects of procurement process risk on performance remain scarce in manufacturing firms in developing countries. Therefore, the paper aims to investigate the effect of procurement process risk on procurement performance of manufacturing firms.

Findings

In this paper, five out of the six procurement process risks studied were found to be undermining procurement performance of manufacturing firms significantly. However, the risk threshold effect on the performance differs.

Research limitations/implications

Although this research is geographically/sector bias, several insightful managerial implications can be drawn to manage procurement process risk in manufacturing settings irrespective of the area of operation. The results of this research imply that manufacturing firms' procurement process is risk prone and the effect of risk surrounding each procurement process on procurement performance differs. Hence, the need to identify and analyse the risks surrounding each procurement process before making managerial decision to spend firms limited resources in response to the individual risk to improve procurement performance in the manufacturing sector.

Originality/value

This paper is the first to provide existing and future procuring practitioners/firms with in-depth empirical evidence of the effect of the procurement process risks on procurement performance in manufacturing firms operating in developing economies.

A Two Phase Integrated Fuzzy Decision-Making Framework for Green Supplier Selection in the Coffee Bean Supply Chain

In Vietnam, as more and more organizations are moving toward globalization, green supplier selection (GSS) has emerged as a strategic approach in supply chain management that requires supplier practices in lessening the environmental risks to society. Based on both conventional and environmental criteria, this paper aims to evaluate a set of suppliers by establishing a multi-criteria decision-making (MCDM)-based framework using an integrated fuzzy analytical hierarchy process (FAHP) with the VIseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR) method. Initially, five GSS criteria of the environmental aspect (wastewater treatment, solid waste generation, energy consumption, air pollution, corporate social responsibility) and conventional criteria (quality, cost, delivery, and technology) are identified from the literature and consulting field experts to employ the MCDM approach. The trustworthiness of the proposed integrated framework is presented by discussing a case study in the coffee bean supply chain in Vietnam. The FAHP is used to generate criteria weights in which fuzzy set theory is applied to translate the linguistic evaluation statements of experts, and VIKOR is used to rank the alternatives against the selected criteria. From FAHP findings, the most important criteria are quantity discount, solid waste generation, order fulfillment rate, logistics cost, and purchasing cost. A consistency test is performed to ensure the uniformity of the expert’s input. The best suppliers are determined through the final ranking of the VIKOR model for the case study. The work presented provides insight to decision-makers of supplier selection that helps determine significant GSS criteria and aids in the minimization of environmental risks to society arising from the supply chain on corporate sustainability standards.

Sustainable service supply chain management: from a systematic literature review to a conceptual framework for performance evaluation of service only supply chain

Purpose

Despite increasing attentions to sustainable service supply chain management (SSSCM), a framework for performance evaluation of sustainable service only supply chain management (SSOSCM) is still missing. This paper tries to fill this gap and provides a novel conceptual framework.

Design/methodology/approach

The articles related to SSSCM are fetched from the databases of SCOPUS and Web of Science. Analysis of 174 articles identified by the systematic literature review is further carried out.

Findings

This research identifies the sustainable practices for service only supply chain (SOSC) as environmental management, social management, economic management, customer management, health, safety and risk management, technical sustainability, institutional sustainability, information and technology management as well as two performance measurement criteria as operational performance and organizational performance. This paper provides a novel conceptual framework for the performance evaluation of SSOSCM. The results call for future exploration in the following three broad directions-(1) customer's perception, involvement and their behaviour towards sustainability in SOSC context; (2) trade-off, incentive mechanism and multilevel evaluation for achieving sustainability in SOSC and (3) sustainability in SOSC from various point of views.

Practical implications

The managers can use the framework to assess the performance of the organization while researchers can explore the discussed research gaps.

Originality/value

This is the first paper that provides a novel conceptual framework for the performance evaluation of SSOSCM as well as potential future research directions.

A stochastic fuzzy multi-criteria group decision-making for sustainable vendor selection in Indian petroleum refining sector

Purpose

This paper aims to select key criteria for sustainable vendor assessment and spare-parts supplies in the Indian petroleum refining sector using stochastic fuzzy technique for order of preference by similarity to ideal solution (SFTOPSIS).

Design/methodology/approach

The criteria for sustainable vendor evaluation and selection are identified from the review of the literature and further; it is finalized using the Delphi method. Eight supply chain (SC) experts from the Indian petro refining sector were identified as having more than five years of experience and agreed to participate in this study (known as decision-makers (DM)). Five vendors supplying spare-parts are shortlisted from the market with the discussion and consent of procurement experts from petroleum refineries. Subsequently, criteria and vendors are rated based on relative importance in linguistic terms from the group of eight DMs. As ratings involve uncertainties in the decision-making, the SFTOPSIS method is applied to determine criteria weight and vendor ranking at a distinct significance level (α). The ranking of the vendors is obtained for sustainable supply of spare-parts in the Indian petro refining sector using the SFTOPSIS method.

Findings

The ranking of sustainable vendors is obtained through the integrated application of the fuzzy and stochastic approach to capture the uncertainties in the ratings of DMs. The sensitivity analysis is carried out at distinct confidence limits of a normal distribution to obtain a robust ranking of the vendors. In this paper, a case application of SFTOPSIS in the Indian petro refining sector is presented in which key criteria and the vendor ranking are found to be changing with confidence limit for sustainable vendor evaluation.

Practical implications

The fuzziness and randomness in relative ratings collects from a group of DMs are taken in the proposed methodology. The distinct approaches are compared with changing significance-level under stochastic, fuzzy and deterministic TOPSIS to acquire robustness in the ranking. The proposed SFTOPSIS model can be useful to practitioners from the petroleum sector.

Originality/value

The originality of the paper contributes to an application of the SFTOPSIS method that is the extension of FTOPSIS in the petro refining sector of a developing country. The sensitivity analysis with distinct significance-level shows the uncertainties in the collected ratings from the DMs that supports robustness in the ranking. It might be helpful for SC professionals from the petro refining sector, who assess the rank of the vendors at different confidence limits for sustainable supply of spare-parts. Further research in the petroleum industry from emerging economies needs to be undertaken to broaden its scope and applicability.

The antecedents and consequences of green purchasing: an empirical investigation

Purpose

This study aims to examine the impact of the supplier's coercive and cognitive pressures on a manufacturer's green purchasing decision-making process and the resultant implications in terms of operational and environmental performances.

Design/methodology/approach

Path analysis is performed to test the hypothesized linkages.

Findings

This study finds that the supplier's coercive pressure, environmental focus and socio-cultural responsibility will lead a firm to more successful implementations of green purchasing, which, in turn, results in improved operational and environmental performances. The study findings reveal that the commercial values of green purchasing in addition to social and political obligations will promote the adoption of green purchasing in supply chain management practice.

Originality/value

This study helps business managers understand the impacts of the supplier's coercive and cognitive pressures on green purchasing and the manufacturer's resultant performances. In particular, coercive pressure is operationalized by the supplier's coercive pressure and environmental regulatory pressure, while cognitive pressure is reflected in the supplier's environmental focus and socio-cultural responsibility. This study contributes to the extant theories and enriches the literature on green purchasing.

Supplier selection and evaluation in e-commerce enterprises: a data envelopment analysis approach

Purpose

E-commerce refers to the facilitation and delivery of goods and services to the customers employing an electronic arrangement. For an e-commerce firm, the customer service level provided by its suppliers can make or break the firm. The purpose of this research is to help e-commerce enterprises in addressing the vast challenge of complex supplier selection and evaluation process that must be performed vigilantly.

Design/methodology/approach

The present study utilizes a three-pronged approach that integrates supplier management practices with the operational business practices of an e-commerce enterprise. In the first step, key performance factors for e-commerce capable suppliers are identified through an expert opinion and existing supplier management literature. Further, Data Envelopment Analysis (DEA) is employed to obtain the efficiency score for each supplier that enables their ranking on various performance parameters. Lastly, the suppliers are classified into different categories based on their performance and efficiency.

Findings

Under the proposed classification scheme, top five suppliers, i.e. supplier 1, 7, 9, 11 and 17 are categorized as HE (High Performance and Efficient). It is suggested that e-commerce enterprises must build long-term relationship with the identified top performing suppliers. The study also provides real insights into supplier's performance on a number of objective criteria. Further, the present study enhances the overall performance and productivity of an e-commerce firm by achieving input cost minimization and output quality maximization, simultaneously.

Research limitations/implications

The results are valid for e-commerce enterprises in general. However, the present DEA model can be further evolved when applied in case of any particular e-commerce enterprise depending upon the internal capabilities of that firm. The nuances related to a firm's own supply capability development can be further explored by practitioners and researchers.

Practical implications

The proposed approach is expected to motivate decision-makers to consider using more sophisticated approached like DEA in supplier evaluation processes. Also, as a benchmarking technique, the proposed supplier classification approach is expected to be highly useful for practitioners in real-life settings.

Originality/value

The novel contribution of this study includes the supplier evaluation, ranking and classification for e-commerce enterprises based on the real-life data. The insights would help the practitioners to formulate novel strategies for appropriately investing in supplier relationships.