Sustainable supplier selection for SMEs based on an extended PROMETHEE Ⅱ approach

Abstract

Small and medium-sized enterprises (SMEs) play a very important role in national production, and provide more than 60% of the employment opportunities for the society. The benign development of small and medium-sized enterprises determines the sustainability of economic operation. In recent years, small and medium-sized enterprises have faced increasing operational pressure. Due to scale limitations, insufficient funds and weak bargaining power, small and medium-sized enterprises are often at a disadvantage when dealing with suppliers. One the one hand, large suppliers rely on the imbalance of bargaining power to increase the transaction costs of small and medium-sized enterprises; On the other hand, small and medium-sized suppliers with poor reputation may use legal loopholes to commit fraud, which may even threaten the survival of small and medium-sized enterprises in severe cases. However, the existing literature focuses more on the situation of large organizations facing complex and diverse suppliers. Therefore, this paper constructed a supplier selection evaluation framework for small and medium-sized enterprises, and proposed an extended PROMETHEE Ⅱ method to achieve sustainable supplier selection process. First, establish a sustainable supplier selection evaluation framework from the three dimensions of product and service capability, cooperation degree and risk factors; Second, combine the PROMETHEE Ⅱ approach with subjective preference parameters and probability language term set (PLTS) to obtain an extended PROMETHEE Ⅱ approach; Last, use the methodology of this paper to implement sustainable supplier selection for a small and medium-sized enterprise (M company) in China. The practical case and sensitivity analysis showed that the evaluation framework and method proposed in this paper were applicable and effective. Actual cases and sensitivity analysis showed that cost, credit and corporate irregularities were the three most important aspects for small and medium-sized enterprises to evaluate supplier performance.