This study integrates the D-numbers analytical hierarchy process (D-AHP) and technique for order preference by similarity to ideal solution (TOPSIS) methods to select the supplier with the best performance by considering environmental criteria in the Indonesian plywood industry. The D-AHP method is used to assess the criteria for selecting green suppliers, while the second method, TOPSIS, is used to select the best alternative supplier. Two respondents are experts in the procurement field and know each supplier's performance. The results obtained show that the priority criteria in the selection of green supplier's quality criteria with sub-criteria, namely the appropriate shape, length, and diameter of the wood. Meanwhile, the best supplier has been successfully selected based on the best performance in this study using the combination of those approaches. The results of the weighting of criteria and sub-criteria in this study can be used as recommendations for selecting green suppliers. It also provides essential insight for organizations to improve environmental performance continuously.
TopIntroduction
Along with the development of the existing industrial world, in recent years, consumer awareness of environmental issues has increased from time to time. However, some consumers are always selective in choosing supply chains to support environmental sustainability, known as green consumers (Ferraro, 2009). Preserving the environment can be done by selecting suppliers with the right criteria. The selection of suppliers influences the production process and the company's image in paying attention to environmental sustainability. One of the factors in the success of a company is the selection of suppliers. Determining appropriate suppliers can reduce selling costs and enhance the company's competitiveness. Choosing the right supplier also ensures the availability of raw materials to sustain the production process (Deshmukh, Sunnapwar, & Resources, 2013). Due to outsourcing initiatives, companies are becoming more dependent on suppliers, so it is crucial to select and evaluate the performance of their suppliers.
A supplier is a party that provides inputs in the form of commodities required for production activities (Pujawan & Mahendrawathi, 2010). Supplier selection criteria include price, quality, delivery, technology, flexibility, culture, and supplier relationships (Amin & Zhang, 2012). However, this aspect no longer meets the requirements of the Indonesian regulations, Law no. 05 of 1984 article 3 concerning attention on respecting environmental sustainability and raising public awareness of the importance of protecting the environment. Therefore, concept, i.e., the applicable environmental aspects of supplier selection are considered.
This multi-criteria decision-making (MCDM) research case study on the selection of green suppliers was carried out in the Indonesian plywood industry. The problems that arise from each supplier to the plywood industry are in terms of environmental sustainability. Some suppliers do not protect the environment and do not prioritize sustainability even though the plywood raw material itself is a sector that is quite essential for the environment. Therefore, environmental criteria are needed for companies in the supplier selection process. The criteria for green supplier selection include price, quality, delivery, service, and the environment. In addition, the company's problem with supplier selection still does not have a correct selection process. Supplier selection is purely decision-making without weighting. So far, the company in selecting suppliers is only based on the price and quality assessment of the plywood raw material itself without compromising the environmental impact that will be caused. One of the impacts that can be caused is the loss of forest sustainability resulting from the logging process by suppliers; it can cause an ecosystem imbalance.
Green suppliers help companies balance corporate performance and the environment, reduce the environmental impact of their products and services, and promote their environmental image (Sarkis, 2001). For example, plywood is one of the export goods, so the company commits to continuously improving its performance in helping to preserve the environment and reduce the impact of globalization. Thus, it is necessary to do the right strategy to balance the company's goals and the environment. One strategy is integrating the company's criteria with a green supplier strategy.