Designing a Framework of Green Supplier Selection, Case Study: Power Plant Industry Dewie Saktia Ardiantono (a*), Nugroho Priyo Negoro (a), Sofia Ramadhani (a), Muhammad Ubaidillah Al Mustofa (b)
a) Department of Business Management, Institut Teknologi Sepuluh Nopember, Surabaya, Indonesia, 60111 *saktiad[at]gmail.com b) Department of Economics and Business, Universitas Airlangga, Surabaya, Indonesia, 60286
Abstract
Supply chain management has an important role in conducting business. Meanwhile, the companys challenge is not always about supply chain, but also derived from environmental issues. Companies that have no concern on environmental issues could be rejected by the public and get fine from the government. Green supply chain management is the answer to these two requirements. One strategy that could be recommended for green supply chain management is to give attention to environmentally friendly suppliers or green suppliers. Green suppliers can reduce the risk of delays in the production process, provide benefits such as minimizing costs and improving quality, and supporting the value of the environment. In case of power plant industry, PT. Pupuk Indonesia Energi (PIE) is one of companies that needs framework to assess suppliers both in general and environmental aspects based on four conditions. First, PIE in 2019 will be fully responsible for the plant for PIE production activities including supplier selection. Secondly, PIE is bound by contracts with customers. If PIE does not provide products in accordance with the contract agreement, PIE could be fined. Third, PIE has environmental values in running out its business as stated in PIE mission and K3LH policy. Last, PIE has the general principle of procurement that is required to assess suppliers to be able to answer the companys needs and be accountable. Designing the framework will involve Analytical Hierarchy Process (AHP) method to get the weight of each factor and sub-factor for the assessment of the green supplier. The results showed there were seven factors and 26 sub-factors needed to form a green supplier assessment framework.
Keywords: Analytical Hierarchy Process, Green Supply Chain Management, Green Supplier Assestment
Topic: Urban Ecosystem, Habitats and Sustainability
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