Incorporating dynamic concept into gradual efficiency: Improving suppliers in sustainable supplier development

Abstract

Sustainable supplier management goes beyond a simple compliance with standards and norms defined by a purchaser or being only effective in terms of economic performance in sustainable supply chain management context. Buying firms are seeking to adopt the sustainable supplier management in their supply chains as they are responsible for their suppliers' environmental and social performances. Previous researches on sustainable supplier management indicate that evaluation of suppliers' sustainability has attracted a great attention from practitioners while suppliers' sustainability development has been widely neglected. One of the development programs for suppliers is performance improvement. Two significant issues need to be considered for implementation of suppliers' improvement program; first, considering time in evaluation process and continuity in improvement, second, applying stepwise or gradual approach as sudden and huge changes in inputs and outputs may be impossible or troublesome. To this end, we propose a data envelopment analysis (DEA)-based model to incorporate dynamic concept into gradual improvement approach. Given proposed model, carry-overs between two consecutive periods are considered in a dynamic environment and also inefficient suppliers are projected to efficiency frontier step-by-step. An illustrative case study in machinery industry is proposed to indicate applicability of proposed model.