Post on 16-Jan-2023
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Identifying the Relative Importance of Implementation Strategies in Green
Supply Chain Management (GSCM) Practices via Fuzzy Analytical
Hierarchy Process (FAHP)
Chia-Wei Hsua*, Allen H. Hub
a* Institute of Engineering Technology, National Taipei University of Technology,1,
Sec.3, Chung-Hsiao E. Rd., Taipei 10643, Taiwan, R.O.C.
E-mail addresses: s3679016@ntut.edu.tw
Tel.: 886-2-27712171 ext.4151
Fax: 886-2-27764702
b Institute of Environmental Engineering & Management, National Taipei University of
Technology,1, Sec.3, Chung-Hsiao E. Rd., Taipei 10643, Taiwan, R.O.C.
E-mail addresses:allenhu@ntut.edu.tw
Tel.: 886-2-27712171 ext.4151
Fax: 886-2-27764702
* Corresponding author
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Selection of priority approach for implementing green supply chain
management (GSCM) practices in Taiwanese electronics industry: From
Taiwanese perspective
Abstract
Green supply chain management (GSCM) has emerged and progressed as a proactive
approach for improving environmental performance of processes and products in
accordance with sustainable business, particular in electronics industry. This is because
that European Union (EU) legislated for novel directives with WEEE, RoHS, and EuP.
The concern of GSCM practice in electronics industry is how to select appropriate
measures to greening supply chain for comply with the requirements of regulations and
customer-firms. Although various studies have proposed a set of approaches for GSCM
practices, yet no investigation has identified the reliability and validity of such strategies
for electronics industry individually. Therefore, these approaches lacked consistency as
a guide to assist companies in developing best GSCM practice. This study aims to
recognize and select appropriate strategy for implementing GSCM in Taiwanese
electronics industry. Based on an extended literature review, twenty approaches were
identified via factor analysis to determine their reliability and validity and were
extracted into four dimensions. And the fuzzy analytic hierarchy process (FAHP) was
applied for determining relative importance and selecting appropriate approach in
GSCM practice. The findings of this study demonstrated that ‘supplier management’
was the most important dimension, followed by ‘organization involvement’, ‘life cycle
management’ and ‘product recycling’ from Taiwanese perspective. This result is
contributive to how the model assists in making decisions when implementing GSCM
practices. And the implications of GSCM practice in electronics industry are verified in
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刪除刪除刪除刪除: proposes a structure model for strategy selection for implementing GSCM in Taiwanese electronic industry using the fuzzy analytic hierarchy process (FAHP). The model is developed using factor analysis to extract the strategies based on an extended literature review. Twenty strategies were identified via appropriate tests to determine their reliability and validity. The FAHP was then utilized to determine the relative importance of implementing the strategies. This
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this work help decision-makers identify those GSCM areas where acceptance and
improvements can be made, and in prioritizing GSCM efforts.
Keywords: Green supply chain management; Strategy; Fuzzy analytic hierarchy process;
Factor analysis
1. Introduction
With the increase in environmental concerns during the past decade, a consensus is
growing that environmental pollution issues accompanying industrial development
should be addressed together with supply chain management, thereby contributing to
green supply chain management (GSCM) (Sheu et al., 2005). Recently, the Waste
Electrical and Electronic Equipment (WEEE), Restriction of Hazardous Substances
(RoHS) and Eco-design for Energy using Products (EuP) directives passed by the
European Union (EU) have prohibited use of hazardous substances and are responsible
for products recycling in electronics manufacturing. With these legal changes that have
directly impacted purchasing organizations, environment-related supplier initiatives
have become essential to firm’s strategies (Cousins et al., 2004). Consequently, GSCM
has become a necessary strategy for many companies in the electronics industry,
including Dell, HP, IBM, Motorola, Sony, Panasonic, NEC, Fujitsu, and Toshiba (Zhu,
and Sarkis, 2006). This phenomenon implies that company now recognizes that
environmental awareness can be a source of competitive advantage (Walton et al., 1998).
Due to the complexity of GSCM practices, customer and cost pressures, and regulation
uncertainty, implementing GSCM is considered a thankless task that increases overall
product cost. Therefore, the biggest challenge in GSCM practices for companies is to
select suitable strategies in accordance with the regulations and customers requirements.
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The issue of GSCM is significant for Taiwan’s electronics industry as recent studies
have shown that most of the world’s manufacturing will be relocated to Asia within the
next two decades (US-AEP, 1999). Therefore, GSCM is an operational initiative many
organizations, including those in Asia and South Asian region, are adopting to address
such environmental issues (Rao and Holt, 2005). Taiwan is one of the most
industrialized countries in the Asia-Pacific region. Most electrical and electronics
manufacturers in Taiwan are involved in Original Equipment Manufacturing (OEM) and
Original Design Manufacturing (ODM). These companies play important roles in global
markets as their products have substantial market share. For example, the Taiwanese
information industry has outpaced most of its international counterparts. At one time,
Taiwan was the third largest producer of information products globally (Chen, 2004).
Notably, in 2004, Taiwan was the leading provider of notebook PCs, liquid crystal
display (LCD) monitors and chip foundry services achieving 72%, 68% and 70%
market share, worth of $22 billion, $14 billion, and $8.9 billion, respectively
(BusinessWeek, 2005). Nevertheless, these industries are subject to customer requests
for green products and green manufacturing that comply with emerging environmental
directives (such as WEEE, RoHS, and EuP). These directives, particular the RoHS,
directly impact the electrical and electronic industries in Taiwan that export products to
the EU—exports in 2004 exceeded US$7.8 billion. More than 3,000 companies were
affected by the directives of EU. These directives also have far reaching influence on
supply chain partners for multinational enterprises (Huang, 2005). In addition, China is
developing its economy rapidly, while at the same time increasing its awareness of, and
actions associated with, environmental protection (Zhu et al., 2006). Consequently, the
Chinese government has instituted stringent environmental regulations (Wang et al.,
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2004), such as China’s RoHS and WEEE directives. These directives pose another
significant pressure for Taiwanese electrical and electronic industries as most
companies have moved their factories to China.
To date, GSCM remains a new management paradigm that lacks sound and
comprehensive theory. Although numerous studies have proposed various schemes for
implementing GSCM practices (Lamming and Hampson, 1996; Lippmann, 1999;
US-AEP, 1999; Bowen et al., 2001; Yuang and Kielkiewicz-Yuang, 2001; Rao, 2002;
Evans and Johnson, 2005; Zhu et al., 2005), no consensus exists regarding these
schemes due to the uncertainty of regulations. For example, the RoHS directive lacks a
standardized test procedure and an updated exemption annex of chemicals. These
shortcomings result in significant problems when implementing GSCM. Currently,
regulations lack consistent standards or practices for GSCM issues. Furthermore,
increased regulations—RoHS-EU, RoHS-Korea, and RoHS-China—result in
difficulties executing GSCM practices. Hence, enterprises cannot determine whether
their executive strategies conform to regulations or ensure that current management
approaches are working and have a low risk. Consequently, enterprises are at economic
risk when choosing appropriate and strategies for GSCM practices.
The analytical hierarchy process (AHP) method, introduced by Saaty (1980), directs
how to determine the priority of a set of alternatives and the relative importance of
attributes in a multi-criteria decision-making (MCDM) problem (Saaty, 1980; Wei et al.,
2005). The primary advantage of the AHP approach is the relative ease with which it
handles multiple criteria and performs qualitative and quantitative data (Kahraman et al.,
2004; Meade and Sarkis, 1998). However, AHP is frequently criticized for its inability
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to adequately accommodate the inherent uncertainty and imprecision associated with
mapping decision-maker perceptions to extract number (Kwong and Bai, 2003; Chan
and Kumar, 2007). It is therefore difficult to response to the preference of
decision-makers by assigning precise numerical values. To improve the AHP method
and recognize consistent strategies for implementing GSCM, this study applies the
fuzzy analytic hierarchy process (FAHP) (Erensal et al., 2006) and uses triangular fuzzy
numbers to express comparative judgments of decision-makers. A systematic approach
of FAHP to identify priority strategies for GSCM implementation was adopted based on
a complex and multi-criteria environment. As a result, the FAHP and its extensions are
developed to resolve alternative selection and justification problems. The main goal of
this study is to establish a consistent and prior strategy for implementing GSCM
reliability and validity via factor analysis (FA). Applying the FAHP to conduct the
relative importance of different strategies is extremely crucial, for the results can be
used by managers implementing and adopting their own GSCM practices.
The remainder of this paper is organized as follows. Section 2 describes the GSCM and
its practice in Taiwan. Section 3 discusses previous studies available in the area of the
strategies for GSCM practices. Section 4 presents the proposed methodology for
establishing a consistent framework for the FAHP model. Section 5 discusses the
priority weightings for different strategies for implementing GSCM practices. Section 6
presents conclusion and future directions for research, particularly in reference to
GSCM practices. 需要重新安排
Green supply chain management and its practices in Taiwan
Currently, the lack of consensus regarding a definition for GSCM and GSCM practices is
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not surprising, as GSCM is the conflation of corporate environmental management and
supply chain management, both of which are relatively new areas of study and practice
(Zhu and Sarkis, 2004). Furthermore, different studies (Green et al., 1996; Narasimhan
and Carter, 1998; Godfrey, 1998; Rao, 2002; Zhu and Sarkis, 2004) have defined
GSCM from different perspectives, driving forces and purposes (Rao, 2002), implying
that the definitions for GSCM and GSCM practices can be redefined for particular
industries, goals, and properties. In this study, GSCM is defined as the management of
raw materials, parts/components, processes, and services from suppliers to
manufacturers to customers and product take back with improvement to
environmental impacts though lifecycle stages. A number of strategies for implementing
GSCM practice have been proposed. These strategies are aimed at mitigating the risks
associated with supply chain interruptions or delays, and protecting a company’s
reputation and brand image from damaging public controversies. van Hock (1999) also
observed that GSCM has emerged as an important new archetype for achieving profit
and market share by reducing environmental risk and impact and increasing ecological
efficiency.
The original concept underlying the greening of supply chains in Taiwan was to
implement a corporate synergy system (CSS) model as an innovative approach for
promoting industrial waste minimization (IWM) among small and medium enterprises
(SMEs) (Rao, 2002). The CSS is a management mechanism that encompasses formation
of partnerships among firms in supply chains to attain specific objectives, and was
adopted as the primary mechanism for promoting cleaner production (CP) that reduces
the environmental impact from SMEs (Chiu et al., 1999). Currently, the Ministry of
Economic Affairs (MOEA) has adopted the CSS model to introduce GSCM practices
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for central firms and their satellite manufacturing suppliers, which are mostly SMEs that
have limited capital and manpower. The MOEA is thus promoting a Green Plan (GP)
and forming an inter-governmental RoHS Service Group to assist Taiwanese industry in
complying with EU regulations.
The GP, introduced at the end of 2004, includes three tasks: establish an information
management system for green supply chains; develop a recycling system and
management platform for green products; and, generate a certification database for
green parts and components that conform to environmental requirements (MOEA,
2005). Additionally, the Taiwan Electrical and Electronic Manufacturers Association
(TEEMA) have invited domestic certification and verification organizations, and
equipment suppliers, large electronics companies and academic and research institutions
to join the GP and assist industries in overcoming barriers to green technology. Another
group, the MOEA’s RoHS Service Group, is a technology-oriented group coordinated
by the Industrial Development Bureau (IDB) that provides diagnostic and guidance
services, as well as technological consultation, education and training and an
information service for Taiwanese electrical and electronics companies. To date, more
than 1,480 companies have received guidance and assistance (MOEA, 2005). The
RoHS Service Group and the Securities and Futures Bureau conducted general reviews
of companies listed on the Taiwan Securities Exchange Corporation (TSEC)/GreTai
Securities Market (GTSM) to determine how these companies and their suppliers
responded to the RoHS directive.
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2. Review and classification of green supply chain management practices
GSCM is progressing in electronics industry due to the EU passed the environmental
regulations with WEEE, RoHS, and EuP. Those directives now are indistinct and
incomplete so that consistent approach is inexistent. This has lead to so that
manufacturers can not ensure their measures of implementing GSCM whether can
comply with the requirements of directives. As a reason, GSCM practice in this study
focus mainly on the concern of EU directives and how to adopt appropriate strategy for
greening entire supply chain.
The WEEE directive aims to improve the environmental performance of electrical and
electronic equipment (EEE) which requires the implementation of systems for take-back
and treatment of electronic products (Directive, 2003). Currently the adoption of
take-back is mainly divided into two methods. One can argued that collaboration on
products recycling within the same industry sector. An example of IBM and Dell, as
multinational enterprises, embraced reverse logistics by streamlining the manner in
which they deploy old systems; and in the process make it easier for the customers to
refurbish existing computers or buy new parts (Ferguson, 2000). Second is to join local
recycling organization for achieving the recycling and recovery targets. Acer
Corporation in Taiwan, a top laptop brand in Europe, has worked with several recycling
systems in Europe, including Swiss Association for Information, Communications and
Organization Technology (SWICO) in Switzerland, E1-Kretse in Sweden, El-Retur in
Norway, Recupel in Belgium, Information & Communications Technology (ICT)
Producer Cooperative in Finland, ICT Milieu in The Netherlands and Ecotrel in
Luxemburg (Acer, 2005). Both take-back models for EEE can fulfill the requirements of
WEEE directive but the selected difference is determined by firms in the volume of
product recycling, capital and manpower investment, difference in recycling laws in
each EU state. Additionally WEEE directive requires that company have to submit
disassembly information to recycling disposal business while the products enter the
market in one year. Therefore company unitized design for disassembly (DfD) concept
to conduct disassembly report based on 3R (reuse, recycling, recovery) principle. This is
because DfD is a powerful approach for improving the product’s end-of-life (EOL)
‘disassemblability’ by appropriate design of the product itself rather than improvement
restricted to optimizing the disassembly processes and tasks for a given product
(Viswanathan and Allada, 2006).
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Viswanathan, S. and V. Allada, (2006), “Product configuration optimization for disassembly planning: A differential approach”, Omega 34, pp. 599 – 616. Directive 2002/96/EC of the European Parliament and of the Council of 27 January 2003 on Waste Electrical and Electronic Equipment (WEEE).
The EuP directive is the first directive requiring the incorporation of life-cycle-based
environmental considerations into the product development process (Kautto, 2007).
Several aims of EuP directive have stated: to ensure the free movement of energy-using
products within the EU, to improve the overall environmental performance of these
products and thereby protect the environment, to contribute to the security of energy
supply and enhance the competitiveness of the EU economy and to preserve the
interests of both industry and consumers (Commission, 2003). Various issues of
controversy during the preparation process have been debated among NGOs, industry
and its associations, and governments with respect to how to achieve ‘conformity
assessment’. Kautto (2007) pointed out that Eco-Management and Audit Scheme
(EMAS) and ISO 14000 based systems were accepted as ‘conformity assessment’, but
the final proposal for EuP states that ‘it is not obligatory to make a life cycle analysis
(LCA) according to relevant international standards’. Presently in practice
manufacturers attempted to utilize LCA to perform the ecological profile with the
inventory of environmental database for products. This is because that manufacturer
shall perform an assessment of the environmental impact of a product throughout its
lifecycle EuP directive required. From EuP directive,
Kautto, P. (2007), “Industry–Government Interaction in the Preparation of a New
Directive: Nokia, Industry Associations and EuP”, European Environment, 17,
pp.79-91.
Commission of the European Communities. 2003a. Proposal for a Directive of the European Parliament and of the Council on Establishing a Framework for the Setting of Eco-Design Requirements for Energy-Using Products and Amending Council Directive 92/42/EEC, COM (2003) 453 final. http://europa.eu.int/eur-lex/en/com/pdf/2003/com2003_0453en01.pdf [28 February 2007].
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說明目前歐盟三大指令衍生之問題與做法，說明目前整個實務做法的內容
A number of strategies for implementing GSCM practice have been proposed. These
strategies are aimed at mitigating the risks associated with green supply chain
interruptions or delays, and protecting a company’s reputation and brand image from
damaging public controversies. Strategies for GSCM practices have been identified by
various authors; they are briefly outlined below and summarized as Table I.
***Insert Table 1***
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Table I. Strategy for green supply chain management (GSCM) implementation in
response to EU directive emphasized by selected authors
Criteria factors Representative reference Suppliers meeting Lippmann, 1999; Yuang and Kielkiewicz–Yuang, 2001; Rao (2002) Environmental auditing for suppliers Lippmann, 1999, US-AEP, 1999; Yuang and Kielkiewicz–Yuang, 2001; Zhu et al., 2005 Suppliers environmental questionnaire Lamming and Hampson, 1996; US-AEP, 1999; Bowen et al., 2001; Rao, 2002; Evans and Johnson, 2005Compliance statement Yuang and Kielkiewicz–Yuang, 2001; Evans and Johnson, 2005 Product testing report Evans and Johnson, 2005 Bill of material (BOM) Evans and Johnson, 2005 Establishing environmental requirements for purchasing items
Lamming and Hampson, 1996; Lippmann, 1999; US-AEP, 1999; Yuang and Kielkiewicz–Yuang, 2001;and Johnson, 2005
Green purchasing Yuang and Kielkiewicz–Yuang, 2001; Rao, 2002; Zhu et al., 2005 Collaborative R&D with suppliers Lamming and Hampson, 1996; Lippmann, 1999, US-AEP, 1999; Bowen et al., 2001; Rao, 2002 Information system Yuang and Kielkiewicz–Yuang, 2001; Evans and Johnson, 2005 Joining local recycling organizations US-AEP, 1999; Bowen et al., 2001; Rao, 2002 Collaboration on products recycling with the same sector industry
Yuang and Kielkiewicz–Yuang, 2001
Produce disassembly manuals Lamming and Hampson, 1996; Rao, 2002 Green design US-AEP, 1999; Yuang and Kielkiewicz–Yuang, 2001; Rao, 2002 Environmental education and training Lippmann, 1999; Yuang and Kielkiewicz–Yuang, 2001 Top management support Lippmann, 1999; US-AEP, 1999; Evans and Johnson, 2005 Environmental policy for GSCM Lamming and Hampson, 1996; Lippmann, 1999; US-AEP, 1999; Yuang and Kielkiewicz–Yuang, 2001
-function integration Lippmann, 1999; US-AEP, 1999; Yuang and Kielkiewicz–Yuang, 2001; Evans and Johnson, 2005 Manpower involvement Rao, 2002 Effective communication platform within companies and with suppliers
Lippmann, 1999
Establish a environmental risk management system for GSCM
Bowen et al., 2001
Supplier evaluation and selection Lamming and Hampson, 1996; Yuang and Kielkiewicz–Yuang, 2001; Rao, 2002 Tracking the development of directives US-AEP, 1999 Applying LCA to carry out eco-report Lamming and Hampson, 1996; US-AEP, 1999; Rao, 2002 Establish an environmental database of products Lamming and Hampson, 1996
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Lamming and Hampson (1996) explored the concepts of environmentally-sound
management (e.g. life cycle analysis, waste management, product stewardship, and so
on), and linked them to supply chain management practices such as vendor assessment,
lean supply, collaborative supply strategies, establishing environmental purchasing
policy and working with suppliers to enable improvements.
Lippmann (1999) proposed various critical elements for the successful implementation
of supply chain environmental management. Those components include the production
of written GSCM policies, supplier meetings, training, collaborative R&D, top-level
leadership, cross-functional integration, effective communication within companies and
with suppliers, effective processes for targeting, evaluating, selecting and working with
suppliers, and restructuring relationships with suppliers and customers.
US-AEP (1999) improved understanding of industry approaches to supply chain
environmental management (SCEM) by focusing on seven major electronics firms.
Some of the common SCEM tools employed by these firms are summarized as follows:
(1) Prequalification of suppliers
(2) Environmental requirements during the purchasing phase
(3) Supply base environmental performance management
(4) Building environmental considerations into product design
(5) Cooperating with suppliers to deal with end-of-pipe consumer environmental issues
(6) Reverse logistics
(7) Influencing legislation to facilitate better SCEM policies
(8) Working with industry peers to standardize requirements (for suppliers and
purchasing items)
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(9) Informing suppliers of corporate environmental concerns
(10) Promoting the exchange of information and ideas.
Bowen et al. (2001) conducted an exploratory analysis of implementing patterns and
inductively derived three main types of green supply. The first type, greening the supply
process, represents adaptations to supplier management activities, including
collaboration with suppliers to eliminate packaging and recycling initiatives. The
second type, product-based green supply, attempts to manage the byproducts of supplied
inputs such as packing. The third type, advanced green supply, includes more proactive
measures such as the use of environmental criteria in risk-sharing, evaluation of buyer
performance and joint clean technology programs with suppliers.
Yuang and Kielkiewicz-Yuang (2001) presented an overview of current practices in
managing sustainability issues in supply networks. Cross-functional teams, consisting of
sales, environmental personnel, purchasing personnel, and personnel from other relevant
departments, can be found in organizations with the most advanced strategies for
sharing sustainability-oriented information. Organizations make available to their
customers/suppliers their sustainability purchasing policy, goals and future targets via
open days. Moreover, organizations have specific criteria as well as recognized
standards (ISO14001), technical (lead-free soldering) and performance specifications
that its suppliers must meet to be recognized as preferred suppliers. Additionally,
supplier performances can be enhanced through on-site third-party auditing or periodic
self-assessment by suppliers. Through collaboration with suppliers, training is not only
administered to companies that supply advice on sustainability issues in purchasing, but
is also delivered to suppliers to provide them with information on product life cycle.
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Rao (2002) argued that GSCM practices should include working collaboratively with
suppliers on green product designs, holding awareness seminars, helping suppliers
establish their own environmental programs, and so on. To green the supply chain, from
the perspective of practitioners, companies have to integrate the ideas of green
purchasing total quality management, in terms of employee empowerment, customer
focus, continuous improvement and zero waste; life cycle analysis; and environmental
marketing. Green purchasing comprises a number of environmentally-based initiatives,
including a supplier environmental questionnaire, supplier environmental audit and
assessments, environmental criteria for designating approved suppliers, requiring
suppliers to undertake independent environmental certification, jointly developing
cleaner technology/processes with suppliers, engaging suppliers in eco-design, and
product/process innovation.
Evans and Johnson (2005) suggested that manufacturers should install documented and
auditable systems to prevent noncompliant products from entering the EU. The
installation of such systems would involve three steps. The first step is to determine the
legal exposure of the company to EU Directives, and senior management must support
this initial exposure assessment. The next step is to assign the task to a corporate-wide
compliance team, due to the complex requirements of the RoHS Directive. The third
step is to develop a corporate compliance statement, which should include a date for
compliance and might also outline supplier requirements (i.e., testing, documentation,
and so on). Through assessing the supply chain exposure to the EU Directives,
companies can establish the material declaration process. However, companies should
also qualify suppliers to determine their level of RoHS preparedness via questionnaires.
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Zhu et al. (2005) described a number of GSCM practices implemented by Chinese
enterprises to improve their performance. Internal environmental management is a key
to improving enterprise performance in terms of senior manager commitment and
cross-functional cooperation. Commitment of senior managers is extremely conducive
to the implementing and adoption stages for GSCM, because without such upper
management commitment most programs are bound to fail. All GSCM practices are
integrative and require cross-functional cooperation rather than simply being oriented to
a single function or department. They suggested that green purchasing and eco-design
are two emerging approaches and companies should focus on the inbound or early
portions of the product supply chain. Currently, large customers have exerted pressure
on their suppliers to achieve better environmental performance, resulting in greater
motivation for suppliers to cooperate with customers for environmental objectives.
3. Fuzzy analytical hierarchy process
The FAHP was applied to determine weight for the four dimensions and 20 sub-items
for implementing GSCM practices, and provided the priority of those strategies for
enterprise to adopt and adjust their current GSCM practices. Some calculation steps are
essential and explained as follows:
Step 1: Establishing the hierarchical structure
Construct the hierarchical structure with decision elements, decision-makers are
requested to make pair-wise comparisons between decision alternatives and criteria
using a nine-point scale. All matrices are developed and all pair-wises comparisons are
obtained from each n decision-maker.
Step 2: Calculating the consistency
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To ensure that the priority of elements is consistent, the maximum eigenvector or
relative weights and maxλ is calculated. Then, compute the consistency index (CI) for
each matrix order n using Eq. (1). Based on the CI and random index (RI), the
consistency ratio (CR) is calculated using Eq. (2). The CI and CR are defined as follows
(Saaty, 1980):
1.. max
−−=
n
nIC
λ (1)
..
....
IR
ICRC = (2)
where
n is the number of items being compared in the matrix,
maxλ is the largest eigenvalue,
and RI is a random consistency index obtained from a large number of simulation runs
and varies upon the order of matrix (see Table 2).
Step 3: Construct a fuzzy positive matrix
A decision-maker transforms the score of pair-wise comparison into linguistic variables
via the positive triangular fuzzy number (PTFN). The fuzzy positive reciprocal matrix
can be defined as (Buckly, 1985)
[ ] (3) ~~ k
ijk AA =
where
kA~
: a fuzzy position reciprocal matrix of decision-maker k,
kijA
~: relative importance between i and j of decision elements
njiAAjiA kij
kij
kij ,.....,2,1, ,1
~ , ,1
~ =∀==∀=
Step 4: Calculate fuzzy weights value
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According to the Lambda-Max method proposed by Csutora and Buckley (2001), the
fuzzy weights of the hierarchy can be calculated. This process is described as follows.
� Let α=1 to obtain the positive matrix of decision-maker [ ]nxnijm
km aA
~ = . Then,
apply the AHP to calculate weight matrixkmW .
[ ] (4) ......., ,2 ,1 , niwW kim
km ==
� Let α=0 to obtain the lower bound and upper bound of the positive matrix of
decision-maker, [ ]nxnijl
kl aA
~ = and [ ]nxniju
ku aA
~ = . Then, apply the AHP to
calculate the weight matrix, klW and k
uW .
[ ] (5) ......., ,2 ,1 , niwW kil
kl ==
[ ] )6( ......., ,2 ,1 , niwW kiu
ku ==
� To ensure the fuzziness of weight, two constants, klS and k
uS , are calculated
as follows:
)8( 1 min
)7( 1 min
≤≤=
≤≤=
niw
wS
niw
wS
kiu
kimk
u
kil
kimk
l
The lower bound (*k
lW ) and upper bound (*k
uW ) of the weight matrix are defined as
[ ] )9( ........, ,2 ,1 , , ***
niwSwwW kil
kl
kil
kil
kl ===
� Aggregating *k
lW , *k
mW and *k
uW , the fuzzy weight for decision-maker k can be
acquired as follows:
( ) )11( ,.......... ,2 ,1 , , ,~ ***
niwwwW kiu
kim
kil
ki ==
� Applying the geometric average to incorporate the opinions of decision-makers
[ ] )10( ........, ,2 ,1 , , ***
niwSwwW kiu
ku
kiu
kiu
ku ===
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is defined as follows:
( ) )12( ~
.........~~1~
21 niiii WWWkW ⊗⊗⊗=
where
iW~
: the fuzzy weight of decision-makers i is incorporated with K decision-makers.
kiW
~: the fuzzy weight of decision element i of k decision-maker.
k: number of decision-makers.
4. Results and data analysis
5.1. Constructing the hierarchy of strategy of GSCM practices
This study focused on sampling the perceptions and experience of GSCM-based
companies in the Taiwanese electrical and electronics industries. Through a thorough
and detailed analysis of the pertinent literature, a tentative list of 25 strategies of GSCM
was developed and used as the basis for questionnaire development.
Data collection involved distributing questionnaires to various companies involved in
semiconductors and optoelectronics, communication and networks, electronics and
household appliances, and computers. Target respondents were selected from among the
members of Taiwan Electrical and Electronics Manufacturers Association (TEEMA).
Questionnaires were addressed to both the managing directors of the quality assurance
and purchasing departments of the target organizations. This was done because most of
the sample companies may lack green supply chain management representatives or
departments. A total of 300 questionnaires were mailed out and 87 were returned, of
which 84 were valid, representing a response rate of 28 percent (Table 4). According to
the study on development and validation of critical factors and environmental
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management, its response rate is 21.9 percent (Wee and Quazi, 2005). Furthermore,
Antony et al. (2002) also pointed out that their research got 16.5 percent, which was
normal and reasonable. This implies that the response rate of this study is acceptable,
and it reflects the virtue of novel issue of GSCM practice.
Factor analysis in this study was applied to extract the strategy for implementing GSCM,
which is based on the Eigenvalues are greater than 1. The deletion margin for analyzing
the factor loading in this study was 0.6, because of the considered high if the load is
above 0.6 (Kline, 1997). In this investigation, there are five items were eliminated after
factor analysis because they had loadings of less than 0.6. Consequently, the remaining
20 items (Var. 2, 3, 4, 5, 6, 7, 8, 11, 12, 13, 14, 16, 17, 18, 19, 20, 21, 22, 24 and 25)
were re-analyzed to extract 4 dimensions using the factor analysis, which denominated
supplier management, product recycling, organization involvement, and life cycle
management (Table 5).
21
***Insert Table 5***
Table 5 Factor analysis results
Dimension Item Item loading range
Eigenvalues Cumulative percentage
Cronbach’s alpha
Supplier management
1. Environmental auditing for suppliers 2. Supplier environmental questionnaire 3. Compliance statement 4. Product testing report 5. Bill of material (BOM) 6. Establishing environmental requirements for purchasing items 7. Green purchasing
0.657 0.722 0.828 0.842 0.619 0.747 0.830
12.504 50.02 0.9289
Product recycling
1. Joining local recycling organization 2. Collaboration on products recycling with the same sector industry 3. Produce disassembly manual
0.886 0.931 0.613
2.605 60.44 0.8338
Organization involvement
1. Green design 2. Top management support 3. Environmental policy for GSCM 4. Cross-function integration 5. Manpower involvement 6. Effective communication platform within companies and with suppliers 7. Establish a environmental risk management system for GSCM 8. Supplier evaluation and selection
0.624 0.618 0.658 0.750 0.769 0.677 0.727 0.639
1.325 65.74 0.9367
Life cycle management
1. Applying LCA to carry out eco-report 2. Establish an environmental database of products
0.830 0.829
1.032 69.87 0.9156
22
� Reliability test
The new Cronbach’s alpha values, ranging from 0.8338 to 0.9367, following the five
items were dropped. Generally, Cronbach’s alpha value exceeding 0.7 is considered to
have high internal consistency of scale (Lin et al., 2002). All the Cronbach’s alpha
values in this study are greater than 0.7, revealing the high internal consistency and
validity of our scales and demonstrating that all strategies have strong and relatively
high reliability scores.
� Content validity
The content validity of the questionnaire in this work is based on an exhaustive
literature review and detailed evaluations by three senior quality assurance and product
assurance practitioners. Consequently, we are confident that the critical strategies
constructed by the factor analysis have content validity.
� Construct validity
Factor analysis of this study was applied to assess construct validity. Bartlett’s test of
sphericity and the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy were
employed first to test the appropriateness of the data for factor analysis (Kaiser, 1974;
Bagozzi and Yi, 1988). The test results of KMO show that the compared value is 0.863,
significantly exceeding the suggested minimum standard of 0.5 required for conducting
factor analysis (Hair et al., 1995). The Bartlett’s test of sphericity in this study
demonstrated high value for all the four dimensions (p <= 0.000), which are suitable for
applying factor analysis based on the KMO and Bartlett’s test.
5.2. Determine the priority strategy for GSCM practices using FAHP
The fuzzy AHP framework of implementing GSCM practices is structured as a
hierarchy which includes three levels: goal, criteria (4 dimensions), and sub-criteria
23
(twenty items) for determining the priority strategy. A survey questionnaire was
developed from the extracted items via factor analysis process. In total, 9 senior
managers from internationally well-known IT manufacturers contributed their
professional experience assist in understanding GSCM priority strategies from a
practical perspective. After obtaining data from the 9 industrial experts who have
substantial experience implementing GSCM practices, the relative importance of
GSCM dimensions were computed. For 藥在說明一致性的內容
5. Discussion
5.1. Comparisons of the dimensions
5.2.
Analytical results demonstrate that supplier management (0.4337) was the most
important dimension, followed by ‘organizational involvement’ (0.3234), ‘life cycle
management’ (0.1228), and ‘product recycling’ (0.1161). As the GSCM encompassed
complicated matters and tasks related to suppliers, the excellent effects of supplier
management should mitigate possible risks and costs derived mainly from suppliers.
Thus, many multinational corporations have applied pressure on suppliers to improve
environmental performance, resulting in increased motivation for suppliers to cooperate
with customers for environmental objectives (Zhu et al., 2005). For the dimension of
supplier management, ‘product testing report’ (0.2026), ‘BOM’ (0.1917),
‘environmental auditing for suppliers’ (0.1625) and ‘compliance statement’ (0.1448)
were the strategies with the highest priorities.
Currently, wide-ranging approaches to supplier management for OEM/ODM companies
24
Taiwan embrace testing report, BOM, and compliance statement as requirements
essential to assuring that products do not contain hazardous substances, as those
approaches can recognize the responsibility when products violate environmental
legislation. When a product provided by a supplier is considered an available
component, it is assigned a green number. Then, OEM/ODM Company requests the
suppliers submit test reports to prove that the material conforms to regulations and can
be placed on the green material list. This procedure ensures that product and materials
meet regulations. Moreover, the test reports must be certified by third party to acquire
international standards (e.g., ISO17025). Manufacturers must deal with continuously
changing requirements worldwide, and suppliers must provide BOM data for products
when they contain any hazardous substances. The principal objective is to identify the
content of green products and components, and guarantee that all materials comply with
regulations with respect to hazardous substances. Consequently, this scheme is
considered of secondary importance within the supplier management dimension.
Manufacturers will incur a significant penalty when the amount of hazardous substances
in green products exceeds regulations limits. For this reason, manufacturers in Taiwan
typically ask suppliers to submit compliance statements as a guarantee for minimizing
losses and identifying the responsibilities of buyers or suppliers when products have
substances that exceed allowable limits. Compliance statements are currently
categorized as supplier compliance and product declarations. Supplier compliance is
incorporated into a legal document during business-to-business (B2B) transactions.
Such documents are generally drafted by legal affair units of the two companies, and are
signed by both companies. These legal contracts outline supplier responsibilities,
obligations, and the compensation plan when a contract is breached. Product
declarations suppliers unilaterally state that their products meet certain specifications.
25
Such declarations are generally submitted when a supplier cannot or is unwilling to
provide test reports. These declarations, which proclaim that certain products meet
customer requirements, are not legally binding.
Environmental auditing of suppliers is considered as the third priority within the
dimension of supplier management, which has been applied by Taiwanese
manufacturers to recognize and inspect the situation with respect to suppliers that have
implemented GSCM practices regularly. In practice, GSCM involves introducing and
integrating environmental issues and concerns into supply chain management processes
by auditing suppliers (Handfield et al., 2005). This approach can ensure that supplier
processes do not contravene the purchasing firm’s environmental posture (Zsidisin and
Siferd, 2001). The current focus of supplier auditing has a discrepancy in that various
categories of suppliers, which encompasses extensively environmental policy
compliance with regulations, environmental management plans, environmental
communication, green design, operational management, environmental monitoring, and
hazardous substances. Recently, various codes of conduct regarding social
responsibility issues have been incorporated into supplier auditing to attain sustainable
supply chain management (SSCM). For instance, HP, Dell and IBM released an
Electronic Industry Code of Conduct (EICC) that promotes industry standards for
socially responsible business practices across their global supply chains. The EICC is
aimed at ensuring that working conditions in the electronics industry supply chain are
safe, that workers are treated with respect and dignity, and that manufacturing processes
are environmentally responsible (EICC, 2005).
Regarding the dimension of organizational involvement, ‘top management support’
26
(0.2670) was the most important item, followed by ‘environmental policy for GSCM’
(0.1519), ‘cross-functional integration’ (0.1461), ‘effective communication platform
within companies and with suppliers’ (0.1446), ‘supplier evaluation and selection’
(0.1110), ‘manpower involvement’ (0.0924), ‘green design’ (0.0492), and ‘establish an
environmental risk management system for GSCM’ (0.0379). Numerous environmental
professionals of supply chain management at leading companies noted that top
management’s understanding of the value of, and support for, their company efforts was
crucial to the success of GSCM programs (Lippmann, 1999). Trowbridge (2001) also
pointed out that upper management can strongly support GSCM and risk management
as internal drives to strengthen cooperative mechanisms among various units. Because
of GSCM practices involve a broad scope and wide-ranging tasks, which lead to
complexity and difficulty for operation. Furthermore, GSCM practices are integrative
and need cross-functional cooperation rather than being oriented toward a single
function or department (Zhu and Sarkis, 2006). For instance, the requirements in the
RoHS directive are complex and their impacts are far-reaching, affecting product design,
manufacturing, distribution, procurement, disposal and sales. Consequently, various
departments should be involved in compliance teams and these teams should meet
regularly to assess the impact of legislation on current and future operations (Evans and
Johnson, 2005). Cross-functional teams, with personnel from product and quality
assurance, procurement and outsourcing, R&D, and legal affairs, have been organized
by Taiwanese manufacturers. Such teams are important for achieving optimal synergy.
As top management support is important to ensuring that cross-functional teams
successfully implement GSCM practices. Environmental policy for GSCM was
considered of secondary importance to organizational involvement which is aimed at
manifesting company’s position regarding manageable approaches, such as green
27
purchasing, green design, and supplier auditing; and this approach can contribute to
communication and awareness of environmental issues among suppliers, customers, and
staff. Furthermore, as the implementation of GSCM programs by Taiwanese
manufacturers apply to all global factories and suppliers, a comprehensive
communication platform must be devised that resolves barriers and gaps in information
distribution within a company and among suppliers. Generally, quality assurance or
environmental units in Taiwan are responsible for GSCM initiatives and take leading
roles in ensuring overall planning performance and offer continuous positive
reinforcement for those embracing GSCM practices.
Within the dimension of life cycle management, ‘establish an environmental database of
products’ (0.750) was the first priority, followed by ‘applying life cycle assessment
(LCA) to generate an eco-report’ (0.250). The EuP directive requires manufacturers to
integrate eco-design considerations into the product design stage and establish
eco-profiles for products via a lifecycle approach. The approach with the highest
priority is inventory environmental data for products throughout their lifecycles as a
foundation for generating ecological profiles. Hence, ‘establish an environmental
database of products was deemed a prior strategy for implementing GSCM, which is
also the foundation of implementing LCA. Currently, one practical approach for
generating an ecological profile is to use LCA software; however, Taiwanese
manufacturers have minimal experience using LCA software. This phenomenon can
refer to the difficulties encountered when operating software and taking data inventory
and company must invest enormous time and money. In additional, the LCA tool
conforms to EuP directive; however, the database of software has a discrepancy exists
regarding regional characteristics of environmental databases between international (e.g.,
28
Simapro, GaBi) and local (Doitpro in Taiwan) software. This discrepancy implies that
regulation uncertainty makes selecting a standard approach difficult. As long as the EuP
directive does not publish clear and definitive standards regarding the criteria of
eco-design, the ‘applying LCA to carry out an eco-profile’ will always be weighted low
in lifecycle management. However, some exemplary enterprises that received
governmental funding or technical assistance have attempted to use LCA software to
generate eco-profiles for their own products, and are committed to sharing their
experience with other firms in the future.
The dimension with the lowest weighting for implementing GSCM practices was
‘product recycling’ (0.1161). As most Taiwanese manufacturers are ODM, OEM, or
electrical manufacturing services (EMSs), they do not directly impacted by the WEEE
directive, for the take-back and environmentally-friendly obligation of disposal for the
WEEE directive are focused mainly on OBM enterprises. However, this condition does
not indicate that product recycling is an unimportant approach for GSCM. Consequently,
most OBM enterprises deemed ‘joining a local recycling organization’ (0.3692) more
important than ‘collaboration on products recycling within the same industry sector’
(0.1241). This phenomenon could be imputed to there are relatively few Taiwanese
OBM firms, and encompasses the volume of product recycling, capital and manpower
investment, difference in recycling laws in each EU country. Therefore, ‘joining local
recycling organizations’ would be suitable for Taiwanese OBM firms in gaining
competitive advantage in EU countries. For instance, the Acer corporation in Taiwan, a
top laptop brand in Europe, has worked with several recycling systems in Europe,
including Swiss Association for Information, Communications and Organization
Technology (SWICO) in Switzerland, E1-Kretse in Sweden, El-Retur in Norway,
29
Recupel in Belgium, Information & Communications Technology (ICT) Producer
Cooperative in Finland, ICT Milieu in The Netherlands and Ecotrel in Luxemburg (Acer,
2005). Furthermore, IBM and Dell have, as multinational enterprises, embraced reverse
logistics by streamlining the manner in which they deploy old systems; and in the
process make it easier for the customers to refurbish existing computers or buy new
parts (Ferguson, 2000). The Global Asset Recovery Services (GARS) organization at
IBM’s Global Financing Division has integrated some key components into its reverse
logistics network to support and enhance environmental performance (Grenchus et al.,
2001). Enterprises can therefore implement a reverse logistic approach to resolve the
pressure of regulation, increase corporate image (Carter and Ellram, 1998) and acquire
competitive advantage (Newman and Hanna, 1996; Marine, 1998). ‘Product
disassembly manual’ (0.5067) was considered the most important item for product
recycling as the WEEE directive requires that a disassembly manual must accompany
each product. Consequently, most ODM/OEM enterprises in Taiwan adopted a way of
writing disassembly manual in order to conform to requirements of customer and
legislative. In addition, end-of-life disassembly is encouraged for its environmental
benefit, the goal of which is to recover as much original functionality as possible
(Lambert, 2007). A disassembly manual, hence, can be used as a guide for obtaining
intact parts and acquire higher revenues compared with materials recycling.
6. Conclusion
Supply chain management practices that consider environmental factors as threats or
opportunities are still limited to conforming to environmental regulations. However,
uncertainties in current regulations have resulted in difficulties implementing GSCM
practices. Consequently, enterprises cannot ensure that current management approaches
30
are working or have risks and continue to maintain sustainable operations and
advantage in the future. This study utilized FA and FAHP approaches to identify the
priority of strategies when implementing GSCM practices. The main contribution of this
study is to recognize the consistency and priority strategies of GSCM implementation in
electronics industry that can assist enterprises in mitigating risk, reducing cost, and
adopting strategies in response to customer and legislative needs. This study can also
help enterprises in enhances sustainable performance programs already in place.
Therefore, the proposed framework permits managers to improve their understanding of
GSCM practices, and enables decision makers to assess the perception of GSCM in
their organization.
Notably, GSCM has emerged as a useful strategy for leading electronics companies,
indicating that interest is growing at organizations for implementing GSCM to enhance
industrial environmental performance. However, its practice and implementation still
has lots of doubtful points. Even though this study provides some insight into GSCM
implementation, manufacturers have much to learn regarding the effect of effective
communication on GSCM. Moreover, management approaches for implementing
GSCM need to be transformed to accompany changes of regulations and customers in
the future; further studies should continue exploring for acquiring competitive
advantage through GSCM practices.
31
Table 2 Random index (Saaty, 1980) N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 R.I. 0 0 0.58 0.90 1.12 1.24 1.32 1.41 1.45 1.49 1.51 1.48 1.56 1.57 1.58 Table 3 Triangular fuzzy numbers (Lee et al., 2006)
Linguistic variables
Positive triangular fuzzy number Positive reciprocal triangular fuzzy number
Extremely strong (9, 9, 9) (1/9, 1/9, 1/9) Intermediate (7, 8, 9) (1/9, 1/8, 1/7) Very strong (6, 7, 8) (1/8, 1/7, 1/6) Intermediate (5, 6, 7) (1/7, 1/6, 1/5) Strong (4, 5, 6) (1/6, 1/5, 1/4) Intermediate (3, 4, 5) (1/5, 1/4, 1/3) Moderately strong (2, 3, 4) (1/4, 1/3, 1/2) Intermediate (1, 2, 3) (1/3, 1/2, 1) Equally strong (1, 1, 1) (1, 1, 1)
Table 4 Distribution of survey respondent enterprises Profile of respondents Number Percentage Sector Semiconductors and optoelectronics Electronics and household appliances Communication and networks Computers Total
15 22 16 31 84
17.8 26.2 19.0 37.0 100
Table 5 Construct and measurement properties of factor analysis
Construct Total number
of items Eigen values
% of Variance
Cumulative %
Cronbach’s alpha
Item loading
Dimension 1: Supplier management Environmental auditing for suppliers Questionnaire survey Compliance statement Product testing report Bill of material (BOM) Establishing environmental requirements for purchasing items Green purchasing
7 12.504 50.016 50.02 0.9289
0.6572 0.7222 0.8281 0.8420 0.6197 0.7469
0.8303
Dimension 2:Product recycling Joining local recycling organization Collaboration on products recycling with the same sector industry Produce disassembly manual
3 2.605 10.420 60.436 0.8338
0.8856 0.9305
0.6125
Dimension 3: Organization involvement Green design Top management support Environmental policy for GSCM Cross-function integration Manpower involvement Effective communication platform within companies and with suppliers Establish an environmental risk
8 1.325 5.300 65.736 0.9367
0.6244 0.6183 0.6582 0.7504 0.7685 0.6765
0.7268
32
management system for GSCM Supplier evaluation and selection
0.6394
Dimension 4: Life cycle management Applying LCA to carry out eco-report Establish an environmental database of products
2 1.032 4.127 69.863 0.9156
0.8303 0.8287
Note. Scale: 1 = not at all important, 2 = not important, 3 = moderate, 4 = important, and 5 = extremely important
33
Table 6 The priority weighting and ranking of strategy for GSCM practices
Dimensions Priority
weighting Rank Items
Priority weighting
Ranking
Environmental auditing for suppliers 0.1625 3 Questionnaire survey 0.0408 7 Compliance statement 0.1448 4 Product testing report 0.2026 1 Bill of material (BOM) 0.1917 2 Establishing environmental requirements for purchasing items
0.1178 6
Supplier management
0.4337 1
Green purchasing 0.1398 5 Joining local recycling organization 0.3692 2 Collaboration on products recycling with the same sector industry
0.1241 3 Product recycling
0.1161 4
Produce disassembly manual 0.5067 1 Green design 0.0492 7 Top management support 0.2670 1 Environmental policy for GSCM 0.1519 2 Cross-function integration 0.1461 3 Manpower involvement 0.0924 6 Effective communication platform within companies and with suppliers
0.1446 4
Establish an environmental risk management system for GSCM
0.0379 8
Organization involvement
0.3234 2
Supplier evaluation and selection 0.1110 5 Applying LCA to carry out eco-report 0.2500 2 Life cycle
management 0.1228 3
Establish an environmental database of products 0.7500 1
* C.I. and C.R. value of above hierarchy < 0.1
34
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