Supplier Performance Measurement System for Sustainable Supply Chain Management in Electronics Industry

Abstract

This work aims to clarify a sustainability implementation into supply chain and to develop a tool for measuring sustainability performance in supply chain and give the suggestions for improving the sustainability performance for electronic industry. This research has divided into three phases; the first phase is to develop a sustainability measurement framework in supply chain. This framework allows decision makers identifying the sustainability measures based on their interesting area in sustainability criteria. There are eight categories of sustainability criteria in this framework which are financial, nonfinancial, raw material, natural resources, energy, human health and safety, human resources development, and ethical issues. After developing the conceptual framework for measuring sustainability performance, this work has proposed an approach to construct the performance measurement model. This work enhances the valuable of adopting the value chain model and the process-based approach for constructing the sustainability measures model. This leads to an implementation of the proposed framework allowing decision makers to measure sustainability performance in any process or activity in the company and its supply chain. In order to implementing the proposed conceptual framework and the model construction method in practical situation, this work has selected the supplier performance evaluation problem for measuring sustainability performance. The second phase of this work is the development of the tool for measuring sustainability performance by focusing on supplier evaluation problem. The measurement tool is developed based on a fuzzy analytical hierarchy process (FAHP) approach. This thesis has proposed three FAHP methods by modified the extent analysis method (Method-I), modified the normalization approach (Method-II), and employed the weakest t-norm arithmetic (Method-III) for determining the fuzzy priority weight. These methods are easy to adopt in real-life problem in industry. The method-I is less complexity than method-II and method-III respectively, but the method-I also obtains the larger fuzzy spread than method-II and method-III respectively. It depends on the decision makers to select the proposed FAHP among these three methods for implementing in their situations. The results from supplier’s performance help manager for setting the direction to improve supplier’s sustainability by using the normalization rating from measurement model. The third phase of this thesis is an implementation of the proposed framework and proposed FAHP in the case study company in Thai electronics industry. The case study company aims to evaluate sustainability performance of their suppliers in order to manage and improve supplier’s performance. The sustainability performance measurement model consists of 10 indicators and 25 sustainability measures based on three dimensions (economic, environmental, and social). It is found that the importance weight of economic, environmental, and social dimension is 50.87%, 34.86%, and 15.14% respectively. It means that an economic performance is still the most important and the social performance is the less important of supplier’s evaluation. The case study company works with more than 200 suppliers. In term of assessing supplier’s performance, an absolute measurement approach is proposed because it is suitable for dealing with a large number of suppliers. However, this work has selected five suppliers as an example to implement and validate the proposed model. The result of implementation in the case study shows that the proposed FAHP can be adopted in the real-life situation and it is less complicate that the lambda-max method which is an accepted FAHP method.