The Effect of Suppliers’ Green and Traditional Selection Criteria in Supply Chain Management on Purchasing Firms’ Performance

Abstract

In recent years, procurement managers have introduced environmental considerations into supplier selection and evaluation as a response to strict environmental regulations implemented by governments. Although previous research investigated the selection of eco-friendly suppliers, little research has been conducted on the significance of the wide range of selection criteria used by industrial customers. The aim of this study was to address this gap and examine the difference in the perceived importance of the selection criteria versus the performance achieved using the selection criteria, in addition to the difference in the business performance and the total supply performance. By investigating the selection criteria of manufacturers in the market environment, this study aimed to demonstrate how their business performance was affected by the performance of suppliers in relation to such criteria. To accomplish this task, this study conducted an empirical analysis based on the questionnaire responses of 72 purchasing managers working in the electrical/electronic and heavy chemical industries. Based on previous research, the following six supplier selection factors were identified: eco-friendliness, quality, relationship, flexibility, delivery, and price/finance. By using statistical analyses, including sample t-tests and multiple regression analysis, this study identified a correlation between supplier and manufacturer performance. The findings show that some factors, such as eco-friendliness, flexibility, price, and delivery, were statistically relevant to the performance of manufacturers, which added value to the decision-making strategy employed in supplier selection.