Selecting sustainable supplier countries for Iran's steel industry at three levels by using AHP and TOPSIS methods

• Published in: Resources policy 2018-08, Vol.57, p.30-44
• Main Authors: Azimifard, Arezoo, Moosavirad, Seyed Hamed, Ariafar, Shahram
• Format: Article
• Language: English
• Subjects: AHP; Analytic hierarchy process; Carbon dioxide; Case studies; Component and supplier management; Consumption; Criteria; Decision makers; Decision making; Hierarchies; Iron and steel industry; Macroeconomics; Metal industry; Mining industry; Sensitivity analysis; Social factors; Steel industry; Supplier selection; Suppliers; Supply; Supply chain management; Supply chains; Sustainability; Sustainability management; Sustainable development; TOPSIS; Water consumption
• ISSN: 0301-4207; 1873-7641
• DOI: 10.1016/j.resourpol.2018.01.002

Supplier selection as a multi-criteria decision-making problem that highly depends on the decision makers’ vision has a major issue among supply chain (SC) managers. SC sustainability, which pays attention to the environmental, economic, and social aspects in SC, has been recently highlighted in the evaluation process undergone by the SC managers. Suppliers, as the basic components of the SC, play a significant role in creating a sustainable SC. Hence, the first aim of this research is to determine the weights of sustainability criteria by using analytical hierarchy process. The second aim of this study is to evaluate suppliers based on four main criteria, CO2 emissions, the number of employees in the suppliers’ country industry, water consumption and distance from supplier's country to the destination at three SC levels and the macroeconomic (international) level. In order to address the second goal of this research, the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) method as a multi-criteria decision-making method has been applied. In this research, Iran's steel industry has been selected as the case study. Results show that the Iranian mining industry is the best sustainable supplier for Iran's steel industry. In addition, Iran was found as the best sustainable supplier country for most suppliers in Iran's steel industry SC based on the three SC sustainability criteria at three levels. Finally, a sensitivity analysis has been applied according to the different weights of the sustainability criteria. The results of this research can help managers in the steel industry to deal with the supplier selection problem at the macro-level. Furthermore, the presented approach in this research can assist managers of other industries to select and evaluate their suppliers. •Suppliers as the basic components of the supply chain play a significant role in creating a sustainable supply chain.•In sustainable supplier selection, the weights of sustainability criteria can be obtained by using AHP.•TOPSIS method has been applied for ranking the suppliers’ countries of Iran steel industry at three levels of supply chain.•Results show that the Iran mining industry is the best sustainable supplier for the Iran steel industry.•Iran is found as the best sustainable supplier country for the most suppliers of Iran steel industry chain at three levels.