Sustainable supplier selection based on industry 4.0 initiatives within the context of circular economy implementation in supply chain operations

Abstract

This study proposes a decision framework based on industry 4.0 initiatives within circular economy implementation to evaluate and select sustainable suppliers. In this context, sustainable supplier selection, industry 4.0, and circular economy have emerged as key topics of the contemporary operations management debate. The mix method approach of combining literature review and industrial expert’s inputs was adopted to identify four main categories and twenty-one sub-categories relevant to the supplier selection decision. A multi-criteria decision-making support tool composed of the ‘best-worst method’ (BWM) and VIKOR (VlseKriterijumska Optimizacija I Kompromisno Resenje) was applied to aid in the evaluation and selection of a sustainable supplier in Pakistan’s textile manufacturing company. The BWM approach was first applied to determine the relative importance weights, and then, VIKOR used to rank the suppliers. The findings of the study suggest that, the Pakistan’s textile manufacturing company places much emphasis and importance on “Technological and Infrastructure (TI)” with weight of 0.356 and “a positive organizational culture towards implementation of industry 4.0 and circular economy initiatives” (OG3) with global weight of 0.139 when embarking on such decisions, and ranked supplier 2 as the top sustainable supplier. Managerial and post-selection benchmarking negotiations and future research directions are also introduced.

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