Designing the Green Supply Chain Performance Optimisation Model

Abstract

There is a growing concern that business enterprises and their supply chains focus on economic activities while ignoring their impact on the environment. An attempt is made here to develop a green supply chain to address this concern. With the objectives of achieving economic growth and environmental protection, the paper develops a green supply chain performance measures and proposes a partner selection and flow allocation decision making model. An integrated methodology of structural equation modeling (SEM), analytical hierarchy process (AHP), and multiobjective linear programming (MOLP), has been applied to the proposed model. To assess green performance of a supply chain, a scale is developed that includes qualitative as well as quantitative measures. Using the scale and the survey data of 278 business organizations from Indian apparel industry supply chain network, the SEM model is developed to estimate the weights of the green constructs and their measures. Based on the measures, relative scores of different supply chain alternatives (i.e. suppliers, manufacturing plants, distribution and logistics) are calculated by the AHP. The weights estimated by the SEM approach are combined with AHP relative scores to obtain weighted relative scores of different available alternatives. These weighted relative scores are then used in MOLP problem formulation for partner selection and flow allocation decision making. To illustrate the use of the optimization model, real-time data from an apparel manufacturer are presented.