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Abstract
Conventionally, the focus during supplier evaluation has been to assess cost, quality and delivery effectiveness due to their impact on profitability. In recent years, there has been increased emphasis on promoting more sustainable business practices that focus on reducing environmental impact and improve societal well-being, in addition to economic benefits. However, most of the existing supplier evaluation methods in literature as well as those used by leading companies fall short of comprehensively assessing suppliers from a triple bottom line perspective. This paper presents a review and selection of metrics for economic, environmental and societal sustainability evaluation.
Keywords
Sustainability, supply chain, supplier evaluation, metrics, QFD
1. Introduction
Historically, corporate supplier relationships have been transactional and based on the economic impact of the collaboration (Dixon, 1966). Recently, supplier selection and evaluation practices have evolved beyond this financial and transactional relationship into reviewing the environmental (Humphreys et al, 2003) and societal (Badurdeen et al, 2009) ramifications of having a relationship. However, the environmental and societal review still typically occurs after the choice of a supplier has already occurred and tends to be very qualitative in nature.
Increasingly more consumers and therefore retailers are seeking out products that are sustainability compliant. This trend can be clearly illustrated by Wal-mart's recent announcement (Wal-mart corporate website) of Supplier Sustainability Assessments (SSA). Fifteen questions divided into four categories, Energy and Climate (ascertaining a supplier's greenhouse gas emissions and whether or not there is any effort underway to reduced said emissions), Material Efficiency (packaging and water waste), Nature and Resources (whether a supplier to Wal-mart has looked into its supply chain for regulatory compliance with environmental certifications for production and products) and People and Community (reviews company's awareness to the societal impact of a company's supply chain) are included in the SSA. Though not very quantitative, the SSA signals the retail giant's focus on sustainability and the demands that are likely to be placed on suppliers.
Despite the increased emphasis on sustainability considerations (Lamming et al, 1996) most supplier evaluation methods-those practiced by companies as well as reported in literature-still have a heavy economic emphasis (Sonmez, 2006). However, if business practices are to be more sustainable, it is necessary that companies begin evaluating supply chain partner compliance across the triple bottom...