The Establishment of a Green Supplier Selection and Guidance Mechanism with the ANP and IPA

Chih-Chao Chung, Li-Chung Chao, Shi-Jer Lou
2016 Sustainability  
This study aims to establish a green supplier selection and guidance mechanism by integrating the features of an ANP (Analytic Network Process) and an IPA (Importance-Performance Analysis) to achieve sustainable management for green supply chains. Using an expert survey, this study developed green supplier selection criteria. It adopted an ANP, which allows for interdependencies and feedback between the various criteria, to select competitive green suppliers. Then, it used an IPA, which can
more » ... IPA, which can analyze the criteria's significance and performance levels, to provide green suppliers with direction for guidance and improvements. The green supplier selection and guidance mechanism featuring an ANP and IPA is thus established and validated through case studies. The research results showed the following: (1) the green supplier selection criteria comprise a total of 11 performance evaluation criteria from the three dimensions of operation, competence, and environmental consciousness; (2) as shown by the APN evaluation results, environmental benefits, environmental regulations, finance, technological competence, and delivery time are the top five among the overall green criteria of the company; the performance of the various suppliers is thus arranged in order, and the most competitive supplier is selected; (3) an IPA is used to analyze the criteria's significance and supplier performance levels and to provide the suppliers with suggestions on priority improvements, including implementing the requirements in the environmental regulations, establishing comprehensive financial management procedures, improving corporate technological competence, and consolidating customer service; (4) it is suggested that an ANP and IPA should be integrated in the applications, which could simplify the green supplier selection and guidance mechanisms and increase the efficiency of supplier management, thus creating a three-win situation for the clients, the company, and the suppliers. chain relations to meet the enterprise's needs and therefore achieve a win-win result for both suppliers and enterprises. Different enterprises have different corporate cultures and attributes and focus on various performance evaluation indexes; thus, enterprises should determine supplier performance evaluation indexes based on their own attributes, requirements, and experiences so as to find conforming suppliers [5] . In the era of the globalization of coexistence in which the sustainable operation of enterprises is emphasized, it is important to comply with the European Union's environmental protection requirements and focus on green trends for enterprises to improve competitiveness [6] . Therefore, it is necessary to incorporate a green environmental protection index into supplier performance evaluation indexes [7]; moreover, suppliers are required to respond and abide by these indexes to meet the requirements of green and environmental protection concepts if they are preparing to enter the European Union market. Next, among many green supplier performance evaluation indexes, there certainly exist correlations and interactions; moreover, different suppliers have different degrees of recognition of these indexes and express them in different ways. Therefore, in this paper, the ANP (Analytic Network Process) is suitable to solve multi-criteria decision problems, and the existence of dependence and feedback features is adopted as a tool for green supplier selection [8] . In addition, this study emphasizes the guidance-based improvement of suppliers; thus, the IPA (Importance-Performance Analysis) is able to analyze index importance, and performance relevance is adopted to further analyze each supplier's expression level of performance indexes so as to provide effective guidance and improvement suggestions [9,10]. Thus, the establishment of effective "Green Supplier Selection and Guidance Mechanism with ANP and IPA" and development of a complete sustainable management mode for green supply chains is expected to achieve a triple-win situation for customers, enterprises, and suppliers. Literature Review This paper first discusses the supply chain evolution and the establishment of supplier mode to understand the connotations of supplier relationship management; then, it discusses supplier selection and green supplier selection criteria to determine green supplier selection and a basis for guidance. Supply Chain Evolution With scientific and technological progress and the changes in market composition and range, there are diversified customer demands; therefore, the main body of the product supply chain is expanded from the individuals to the overall supply chain system for product production. According to the quasi integration theory set forth by Houssiaux [11], a long-term cooperative relationship can be achieved through investment in suppliers' or buyers' partial activities. Through the vertical integration between enterprises, the competitive advantages of their core careers are strengthened to seek maximization of quasi-rent [12, 13] . In this way, the cooperation mode, in which completely different technologies' production and distribution are integrated with other economic activities, has evolved into the organizational vertical market [14, 15] so that enterprises change operation modes from emphasizing professional work division and local optimization to instead improving overall integration performance. Thus, in the highly competitive environment of market globalization, to improve performance, increase profit, extend market occupancy rate, and strengthen competitive positioning, enterprises must perform well in supplier relationship management [16, 17] . According to the concept of cooperation set forth by Brandenburger & Nalebuff [18], an organization is faced with competition and cooperation in the market [19] . Through value creation and sharing, enterprises can gain knowledge and economic value [20] ; an opposing and short-sighted supplier relationship is thus transformed into a cooperative partnership between enterprises [21, 22] . This establishes a win-win pattern. However, it is quite complicated to establish a supplier partnership because the implementation effect is not as good Sustainability 2016, 8, 259 3 of 24 as expected; meanwhile, the new relationship is unable to be maintained in the long term. Under the supply chain architecture, each member of the supplier relationship will be highly involved in each other's sales and purchase systems to reduce the two parties' storage, insurance, management, disposition, and other inventory costs, therefore creating more economic value through information sharing and the operation mode of technological cooperation between enterprises and suppliers as well as customers [23, 24] . Only a partnership that is established on a powerful foundation can be sustainable [25] . Therefore, in this study, it is proposed that selecting a potential supplier is the first and foremost condition of successful supplier management. Sustainability 2016, 8, 259 7 of 24 Sustainability 2016, 8, 259 7 of 24
doi:10.3390/su8030259 fatcat:e5o5ldq45jb6fp4ht56ov5gaae