Towards sustainable supply chains: an SDG-informed framework for managing supplier-related risks

Source abstract

Abstract Accepted by: Aris Syntetos Supplier selection is not only a strategic decision impacting a company's performance but also has ramifications for global sustainable economic growth as outlined in the sustainable development goals (SDGs), particularly SDG 8 and SDG 12. This study aims to propose an SDG-informed framework that guides firms in selecting suppliers that not only fulfill cost and risk considerations but also contribute to sustainable growth. Three multi-criteria decision-making methods combined with a multi-period bi-objective Mixed Integer Linear Programming model are used to determine the optimal supplier(s) and the ideal quantities based on both cost and risk. Sensitivity analysis examines the impact of fluctuating purchasing cost, supplier capacity, and risk tiers on the optimal solution(s). Findings underscore the inherent trade-off between cost and risk, demonstrating that reducing costs often entails accepting higher risks and vice versa. The proposed framework enables firms to optimize supplier selection and order allocation dynamically, considering economic, environmental, and social risks. Managerial insights highlight the importance of integrating sustainability into supply chain decisions, considering multi-period planning for long-term goals, and implementing flexible strategies to address market fluctuations. This research provides guidance for enhancing supply chain resilience while contributing to sustainable economic growth.