Refine
Document Type
Language
- English (2) (remove)
Has Fulltext
- no (2)
Is part of the Bibliography
- no (2)
Keywords
- Supplier selection (2) (remove)
Purpose
The purpose of this paper is to propose a comprehensive methodology and a problem-specific model for the configuration of the optimal strategic supplier portfolio in terms of traditional, performance-related objectives and sustainability targets.
Design/methodology/approach
To bridge the research gap, i.e., to align strategic supplier portfolio selection with corporate sustainability targets, a hybrid model of the analytic network process (ANP) and goal programming (GP) is developed. To validate the model, a case example is presented and managerial feedback is collected.
Findings
By enabling the integration of sustainability targets into strategic supplier portfolio configuration, the hybrid ANP-GP model contributes to research in the area of sustainable supply chain management. Results indicate that simplifying the model by omitting one or more details may lead to unfortunate actions.
Research limitations/implications
The model has been applied using a case example in the automotive industry. To strengthen the findings, it should be examined under other terms as well.
Practical implications
Integrating economic, environmental, and social targets into strategic supplier portfolio configuration reduces supply risks and promotes the achievement of the sustainability goals of the purchasing company.
Social implications
Strategic supplier selection counts among the decisions that have an impact on the environment and society for several years. Configuring economically rational, environmentally friendly, and socially responsible supplier bases supports worldwide efforts towards sustainable development.
Originality/value
Although sustainable supplier selection has gained importance in recent years, this is the first time that a comprehensive model for the determination of the optimal strategic supplier portfolio in terms of performance-related objectives and sustainability targets has been proposed.
This research presents a decision support methodology for the multi-criteria supplier selection and order allocation problem. The proposed approach supports purchasing managers in assembling mid-term supplier portfolios while making them aware of the trade-offs between the supplier sustainability, the purchasing costs, and the overall supply risk. First, we propose a multi-objective optimization model with three objectives: to maximize the supplier sustainability, to select the supplier portfolio with the lowest purchasing costs, and to minimize the supply risk. Our model extends existing mathematical approaches that follow the portfolio theory fathered by H. Markowitz by integrating the aspect ‘risk’ into the supplier selection problem. Secondly, since we allow for integer variables in our model—in contrast to the classical Markowitz portfolio theory—we use the ε-constraint method to visualize the efficient surface. The possibility of considering the non-dominated set of supplier portfolios is advantageous for purchasing managers as they gain a picture of the different optimal supplier portfolios and are able to analyze the trade-offs between the different purchasing goals before making a decision. Finally, we illustrate the applicability of the proposed methodology in a real-world supplier selection and order allocation case from the automotive industry. In the example case, we identify 1754 optimal supplier portfolios that may be assembled based on the eight available suppliers. Our analyses show that each optimal portfolio consists of two suppliers, with one specific supplier being included in each portfolio. Furthermore, four suppliers are not part of any optimal solution.