AN INTEGRATED MULTIPLE CRITERIA DECISION-MAKING MODEL FOR GREEN SUPPLIER SELECTION IN STEEL MANUFACTURING INDUSTRY: A CASE STUDY IN VIETNAM

The problem of global warming caused by manufacturing activities has received a lot of attention recently. Along with an increasing worldwide awareness of the environment, green manufacturing is a major challenge for almost all companies and will determine a manufacturer's long-term sustainability. A performance evaluation method for green suppliers thus is critical for determining the potential of suppliers to collaborate with the company. Thus, multi‐criteria decision-making (MCDM) models are a useful tool for resolving complicated selection problems involving multiple criteria and alternatives, especially in relation to qualitative factors. Thus, the author presents an MCDM model that combines the analytic hierarchy process (AHP) and the data envelopment analysis (DEA) approach to assess and choose the best green supplier in the steel manufacturing industry. The criteria are created for the evaluation of potential suppliers based on previous literature and expert interviews. The AHP model specifies the weight based on the opinion of an expert and the DEA is used to rank suppliers at a final stage. For criteria weighting results, "product cost", "supplier's reputation", "lead time", "warranty" and "green policies" with weights of 0.637, 0.669, 0.750, 0.731 and 0.512, respectively, were found as the most significant sub-criteria. The final ranking suggests GS-01 (KKC Metal JSC), GS-04 (Vnsteel-Vicasa JSC), GS-05 (Vietnam Germany Steel Pipe JSC), and GS-08 (Hoa Sen Group) are indicated to be the top four most suitable green suppliers. With the suggested approach, manufacturers can better understand the performance of their suppliers and can evaluate and choose the most appropriate green supplier for cooperation.