A holistic approach to supplier evaluation and order allocation towards sustainable procurement

Purpose The purpose of this paper is to propose a holistic approach for supplier evaluation and purchasing order allocation among the ranked suppliers who meet acceptable levels of economic, environmental and social measures. Design/methodology/approach A mixed research method of case study and analytical approach is adopted in this research. A fuzzy analytical hierarchical process (FAHP) is applied for ranking of suppliers. Supplier ranks are validated using judgements from multiple decision makers. Purchasing order allocation among the ranked suppliers is determined using cost minimization subject to multiple criteria of economic, environmental and social conditions. A cement manufacturing case example demonstrates and validates the proposed approach. Findings The research shows that both economic and environmental considerations are significant when suppliers are evaluated for sustainable procurement within the best practice of supply management process. Ranking of suppliers, based on experts' opinions, indicates varying degrees of importance for each criterion. Adoption of sustainable procurement criteria for evaluating supplier in a cement manufacturing organization is explained by three organizational theories including resource-based, institutional and dynamic capabilities theories. Preferred suppliers from FAHP method are confirmed by judgements from multiple decision-makers. The analysis reveals that purchasing order allocation is different when suppliers are evaluated based on their relative importance and overall ranking. Social implications Suppliers' information on health and safety of their truck drivers are used in order allocation, thus emphasizing the importance of social dimension and encouraging better conditions and benchmarking for delivery drivers. Originality/value This paper extends the contribution to the literature by providing guidelines for managers to set strategies, benchmarks and policies within broader sustainable supply chain practices and demonstrates the applicability of the approach using a cement-manufacturing scenario in an emerging economy.