An Integrated Approach to Sustainable Supplier Selection by using Analytical Hierarchy Process and Grey Relational Analysis

Supply chain management includes the requirements to provide a well-organized supply process by continuous monitoring and controlling the process in order to guarantee that customers and organizational needs are met. In order to have an efficient SCM, good coordination must be established between all components of the supply chain. Traditionally, different qualitative and quantitative criteria including price, technical capability, delivery performance and quality affect Supplier selection process. [1-2]. Based on further studies supply chain sustainability can be improved by cooperation with environmentally, socially, and economically strong suppliers and it positively impacts sustainable development [3]. Large number of research papers were published in the traditional supplier selection area which considered the most important criteria including price and quality. These approaches were competitive and practical until the emergence of sustainability issues which has drawn the attention of managers and CEOs. During past 10 years considerable academic and business literature related to sustainability and green supply chain management has grown. The supplier selection decision has become more important for the companies that are looking for pure sustainable business practices along their upstream supply chain activities. Companies have been forced to incorporate sustainability initiatives on their supply chain processes in order to improve their sustainability profile and consequently maintain their competitive edges because of increasing public awareness, governmental regulations, and market pressure [4]. Further researches demonstrate that supply chain sustainability degree can be improved by cooperation with environmentally, socially and economically focused suppliers [5]. In addition to traditional criteria, sustainable criteria should be taken into account in the supplier selection problem. In other words, sustainable supplier selection can be described as a conventional supplier selection in which, amongst other criteria, environmental and social criteria are considered in order to select and monitor the suppliers performance[6]. Organization’s strategies, information technology, and organizational culture must be balanced with Sustainable supply chain management as it works towards sustainable development. By incorporating these key elements in supply chain efficient protection for organizations against market and environmental risks can be acquired