Ranking suppliers by using the Sustainable Supplier Evaluation Criteria (SSEC) and Multi-Criteria Decision Making (MCDM) methods

Abstract: Background: Despite the competition for achieving lower costs and higher profits, companies are nowadays becoming increasingly aware of the environmental and social impacts of their operations. This is unveiled by growing numbers of sustainable activities in companies’ reports. Companies’ are also under more pressure from authorities and public to increase their business’s environmental performance, a so-called sustainable management process. Besides the pressure for developing environmental responsible activities, companies still remain with their low cost measures. Hence, they are concerned with the issue of identifying suitable measures to assess their sustainability.Supplier selection, processes by which companies evaluate, select and maintain their suppliers, regarded as one of the major operations affecting companies sustainable performance. While supplier selection was often performed in the past using conventional measures, there is an essential need to develop a framework for sustainable supplier selection in supply chain. By doing this research the company can ensure its operations are in line with environmental and social regulations and requirements. Research questions: - What is the important and applicable sustainable supplier evaluation criteria (SSEC) that could be applied? - What Multi criteria decision making method (MCDM) is suitable for evaluating and ranking the suppliers? - How would Renault group in Iran rank the supplier against the sustainable supplier evaluation criteria (SSEC)? - Which Sustainable supplier evaluation criteria (SSEC) could help the lowest ranked supplier to improve its sustainability performance? Purpose: The purpose of this research is to develop important and applicable sustainable supplier evaluation criteria (SSEC) and find out the multi criteria decision making method (MCDM) for ranking the suppliers. Furthermore, it also suggests to the manger to improve the sustainability performance of lower ranked suppliers. Method: The empirical data and the conclusions made from Renault Group in Iran are based on qualitative case study. This thesis is written from a positivistic perspective with a deductive approach. Conclusions: The main conclusions of this study are as below: - Developing a comprehensive list of attributes including the most important and applicable Sustainable Supplier Evaluation Criteria (SSEC) for evaluating sustainability performance of supplier for Renault Company in Iran. - TOPSIS is evaluated MCDM method to rank the suppliers against SSEC in Renault group in Iran. - The suppliers of the company are ranked and the best and the weakest supplier are determined using the TOPSIS. - The lowest ranked supplier is showed which SSEC could improve its performance by applying a parametric analysis.