A Methodology for Green Supplier Selection in Food Industries - Technology Management for Sustainable Production and Logistics - page 3

1 Introduction
Supplier selection is the process which companies identify, evaluate and contract
with suppliers (Beil 2010 ). Competitive international business circumstances made
many companies to focus on supply chain management and supplier selection.
Once a supplier becomes part of a well-managed and established supply chain,
the relationship between the buyer and supplier will have a viable effect on the
competitiveness of the entire supply chain. Also most of the companies have been
spending considerable amount of their revenues on purchasing, therefore supplier
selection process has become one of the most important issues for establishing an
effective supply chain management system (Singh et al. 2012 ).
Formerly companies made decisions just on price, but after study in the
supplier selection area started in 1960s, another criteria became determinant. The
suppliers selection is a complex decision making problem, which should include
both quantitative, and qualitative criteria, as well as global criteria to account
effectively for suppliers performance (Ho et al. 2010 ). Some researchers agreed
that a combination of factors should fit not only the technical requirements, but
also the company's strategy (Cheraghi et al. 2004 ).
Traditional supplier selection models focus on supplier's economic and techni-
cal efficiency while ignoring the ecological efficiency of the supplier. Nowadays
organizations should aim towards spreading environmental awareness amongst the
suppliers, along with offering incentives to them to become environment-friendly.
Organizations are now demanding that their suppliers reduce their environmental
impacts while doing so themselves (Kumar et al. 2014 ).
Packaging industry plays a vital role in terms of protection, storage and hygienic
handling of a product and it plays a key role in the marketing mix. A distinctive,
unmistakable and eye-catching appearance is a signal at the point-of-sale to which
all customers respond positively. During the packaging material supplier (PMS)
selection process, many factors need to be analyzed. A food manufacturer must
evaluate potential packaging suppliers according to some of the following delicate
characteristics when selecting a PMS (Levary 2007 ): availability of the techno-
logical base necessary to produce the packaging material; availability of the skilled
labor force necessary to produce the packaging material; a requisite standard of
quality program; technical support for maintaining the components; volume flexibil-
ity to manufacture different lot sizes; product flexibility to efficiently manufacture
many different products; effectiveness in protecting the manufacturer's proprietary
information; reliability of supplier and reliable suppliers supplying the manufac-
turer's supplier; reliable transportation companies serving the route between the
supplier location and that of the manufacturer; low country risk; which includes
political, natural or man-made disasters and currency convertibility risk; and risk of
disruption to the manufacturer's production.
Food companies are closely monitored by their customers who want to be
confident that the food being purchased is safe and environmental friendly.
In this regard, they are usually asked to pass an independent audit to check
good manufacturing, hygiene and environmental practice (Losito et al. 2011 ).