Evaluating the Green Supply Chain Management of electronics and components manufacturers in Vietnam by using the AHP model

ABSTRACT:

This study is to evaluate the green supply chain management (GSCM) in Vietnam’s electronic components manufacturing industry. In this study, electronics and components manufacturers in Vietnam are selected as research samples. GSCM measurements are examined in terms of design, production and management perspectives. Data which is collected from electronics and components manufacturers in Vietnam via questionnaires is used to evaluate the weight of GSCM measures. In this study, the importance of GSCM measures in environment is assessed by using the analytic hierarchy process with the Saaty’s scale.

Keywords: green supply chain management, analytic hierarchy process (AHP), electronic components manufacturing industry.

1. Introduction

Vietnam's electronic components manufacturing industry has grown rapidly over the years and played an increasingly important role in the industrial production and export of the economy. According to calculations from enterprise survey data in 2019, there were about 2,319 enterprises  doing business in the electronics industry with an average size of about 371 employees/enterprise, a high level compared to other industries. In the period 2016 - 2020, Vietnam's electronics industry experienced a strong development, foreign direct investment projects in the electronics field increased, many major electronics firms in the world had invested in building construction and factories in Vietnam such as Samsung, LG, Foxconn [1].

In the period from 2016 to 2020, the import-export proportion of electronic goods and electronic components increased significantly. In 2020, the total export turnover of electronic goods and electronic components accounted for about 45% of the country's export turnover. Meanwhile, imports of electronic products và components account for about 43% of the country's total import turnover.

Import and export turnover of electronic products and electronic components between the EU and Vietnam tends to increase in the period 2016 - 2020. However, the share of these products in the total export turnover of Vietnam to the EU has gradually decreased. The main reson was the rising international awaraness of environmental issues. There have been many relevant legislations in the international arena, and Europe has recently formulated strict relevant regulations (such as WEEE and RoHS) for green products. Product recycling and restrictions on the use of hazardous substances are well documented. Environmental issues are also rapidly having a great impact on supply chain management.

Selling products to the European market, suppliers are also affected because they must provide green products or green processes. The construction of a green supply chain has become a major challenge and trend in providing green products and moving towards a sustainable society. GSCM requires that suppliers of components or raw materials must consider sustainable development in addition to the existing management mechanism. Thus, this research aims to evaluate the green supply chain management of some top electronicmanufacturing companies in Vietnam.

With the rising of environmental protection and sustainability, firms have to adopt green prectices and reduces the negative environmental effect, specialy manufacturing firms which cause a lot of problems to the environment. However, green supply chain management is still is new concept and it requies mutiple criteria to evaluate. The most challeging step in GSCM is to develop a set of criteria that are suitable for evaluating the green practices of diffferent firms.

In this section, we briefly discuss several multi-criteria decision making analysis (MCDA) applications in the environment, particularly in the subject of GSCM. Problems, success criteria, performance metrics, and barriers connected to the adoption and development of GSCM as a sustainable research topic were addressed in the majority of those applications. According to Huang et al. (2011) [2], the diverse applications of MCDA in the environmental field have seen considerable changes from 1990 to 2010.

The study of Muralidhar (2012) [3] applied AHP in evaluating the green supply chain management stategies of manufacturing industry based on 16 different criteria in which these 16 criteria were devided into 4 groups. The first group evaluated the green procurement with 4 cretia (Green logistics, Lead time, Cost of material and Fufillment of order). The second group was green manufacture with 4 criteria (information sharing, production schedule, back up system and quality level). The third group was about customer servive such as technical support, re-design, complaint response time and shortaage frequency. An the last group focused on environmental management with 4 evaluating criteria (raw material, resource recovery, reccycle of waste and emission).

Dey and Cheffi, (2013) [4] measured and compared the green supply chain performance of different manufacturing companies by applying AHP. In their study, the authors used three criteria to measure the environmental practice (environmental planning, environmental auditing and management commitment) and three indicators were used to access firm’s sustainable performance (environmental performance, economic performance and operational performance).

Freeman and Chen, (2015) [5] conducted a study in terms of green supplier by using AHP combined with other method such as TOPIS to evaluete and ranke selected firms in the context of green supply chain. In that study, five main criteria was employeed such as cost, green competency, quality, delivery and environmental management performance.

Zhou et al., (2019) [6] used 6 main indicators as (1) green design, (2) green purchasing, (3) green production, (4) green warehousing, (5) green logistics and (6) reverrse logistic to access the green practice of three gament manufacturers in Pakistan by using AHP method. The results of that study revealed that green design, gree production and green purchasing were ranked as the most important green indicators.

Some previous studies that focused on GSCM application areas such as the study of Govindan (2015) [7] which prposed a method for developing green performance and practices in GSCM. Mathiyazhagan et al. (2013) [8], propose a structural modeling approach  to analyse the barriers that prevent company from adopting GSCM. The research conducted by Luthra et al. (2014) [9] and Rozar et al. (2015) [10] focused on selecting the success factors of GSCM.

Despite the fact that corporations regard environmental management as a strategic priority, evaluating and analyzing the success of GSCM in terms of applied practices has received little attention, particularly when utilizing a multi-criteria decision framework based on AHP methodologies.

2. Research methodology

AHP is a decision-making technique that provides an overview of the sorting order of choices, from that the best possible final decision is made. AHP helps decision-makers find what is most appropriate for them and helps them understand their problems. Based on mathematics and psychology, AHP was developed by Saaty and has been applied widely and extended. AHP provides a precise framework for the structure of a problem to be solved. AHP use a pairwise comparison method to determine the importance level of different criteria, from that calculate the weight of them by using the Saaty scale with 9 levels of intensity [11] is applied which is presented in Table 1.

Table 1. Saaty scale of intensity of importance

Source: Saaty, (1980) [11]

Suppose that there are k experts who evaluate the importance of criteria. The average score of each criterion is calculated based on the average method as follow:

3. Research Results

Firstly, the main criteria and their sub-criteria were selected and presented in Table 3.1

Table 3.1. Criteria set in evaluating GSCM

Source: Compiled by the authors

In the next step, AHP method was applied to create the comparison matrix. Firstly, the geometric mean method was used to consider the answers from 10 people from 3 companies (LC, Samsung and Foxcom) as a whole, and after integrating these answers, their pairwise comparison matrix was created to obtain their eigenvectors and maximum eigenvalues as well as obtain the consistency index and Consistency ratio.

Table 3.2 to Table 3.4 show the pairwise comparison matrix of each criterion and the summary of of set will be present in Table 3.2 It can be seen from the order of importance in Table 3.2 that flexible change design > planning recycling/recycling process > confirming requirements, raw material characteristics and the impact of the process on the environment > easy disassembly when discarded.

Table 3.2. The comparison matrix of sub-criteria of Design

Source: Compiled by the authors

From the order of importance in Table 3.2, it can be seen that responsed, corrective/preventive measures for abnormal environmental shocks were found to have the highest score, which means that this was the most importance criterion in production process. It is understable that the first condition in the manufacturing process is to formulate measures to respond to environmental abnormalities, corrective and preventive measures, and with preventive measures "green" raw materials can be produced with peace of mind. Then, check whether the remaining materials in the production of green products can be recycled or whether they are too polluted to be used, and then start to separate bad green products to confirm that the products meet the needs of environmental protection.

Table 3.3 The comparison matrix of sub-criteria of Production process

Source: Compiled by the authors

Table 3.4. The comparison matrix of sub-criteria of Production process

Source: Compiled by the authors

According to the order of importance in Table 3.4, it can be seen that managers must first be familiar with environmental protection laws, green directives and customer needs, and then formulate relevant work specifications , cooperate with the regular assessment and review of environmental protection laws and green directives. Those who do not meet the requirements will take corrective measures and formulate relevant training plans to regularly review performance before they are eligible to obtain environmental management or green-related certification.

Table 3.5. Overal Weight

Source: Compiled by the authors

The overall weight (Table 3.5) shows that understanding environmental laws, green directives and customer needs ranks first. The reason is that when making green products, senior managers must first understand relevant laws and customer needs before designing products that meet their requirements of green product. The second-ranked flexible change design is used to meet the specifications required by different products, reducing the number of recycling and reuse. The third most important criterion is abnormal response, corrective/preventive measures, which are the key to timely resolve of the current green supply chain management difficuties. The fourth most important criterion is planning recycling/recycling process which can help to respond to the concept of green environmental protection. The fifth most important is to confirm the impact of demand, raw material characteristics and process on the environment, which is to avoid certain requirements and raw material characteristics that do not meet green standards and cause environmental damage. Green products and other common products are usually manufactured separately due to the material relationship, so as to avoid recycling materials that should not be recycled.

4. Conclusions and discussion

This research mainly uses the AHP to evaluate the importance of the environmental impact on green supply chain management, and uses three electronic manufacturers in Vietnam as the object to illustrate the actual case.

First of all, after reviewing the literature and referring to the key directions currently implemented in the industry, the green supply chain management is divided into three levels for analysis, namely the design aspect, the process aspect and the management aspect. On the design side, the main discussion is to confirm the requirements, the impact of raw material characteristics and processes on the environment, flexible design changes, easy disassembly when discarded, and planning recycling/reuse process. In terms of production process, the main discussion is to confirm that raw materials/suppliers meet environmental protection requirements, implement inspection, control treatment/recycle process pollution, segregation of poor "green" products, "green" raw materials/product isolation or independent production, and major environmental impact. In terms of management, the main topics discussed are regular assessment, inspection and review of compliance with environmental protection laws and green directives, responsible persons and operating specifications for environmental management substances, formulation of environmental protection-related training plans to regularly review performance, corrective and preventive measures for non-compliance, and acquisition. To achieve the research objective, in this study, Saaty's method is proposed on the AHP method, and the content discussed in the literature is established according to the hierarchical structure proposed by the AHP method.

After investigation and data analysis, the degree of importance given by component manufacturers were obtained. From Table 4.5, it can be seen that the importance of sixteen sub-criteria under three main directions were evaluated and ranked in order. Therefore, after the implementation of this research, it can be seen that the AHP is systematic and effective, because it can analyze complex problems systematically by using the hierarchical method, and can simplify the problems and increase the problems by using the hierarchical structure. The validity of the evaluation, and the evaluation through the AHP, can have specific numerical results, so that the analyst can make a clear decision.

In view of the experience after the whole research process, this study puts forward several suggestions, which can be used for future research:

- Applicable assessments of the impact of green supply chain management on the environment can be developed according to different industry categories.

- The AHP method has been widely used, but it limits on the number of experts and scholars or criteria. Too many experts and scholars or the selection criteria are biased, which will affect the consistency of the analysis results.

REFERENCES:

1. Ngoc, T. T. B., Binh, D. T. (2019). Vietnam's Electronics Industry: The Rise and Problems of Further Development. Humanities and Social Sciences Reviews, 7(4), 01-12.
2. Huang, I. B., Keisler, J., Linkov, I. (2011). Multi-criteria decision analysis in environmental sciences: Ten years of applications and trends. Science of the total environment, 409(19), 3578-3594.
3. Muralidhar, P., Ravindranath, K., Srihari, V. (2012). Evaluation of green supply chain management strategies using fuzzy AHP and TOPSIS. IOSR Journal of Engineering, 2(4), 824-830.
4. Dey, P. K., Cheffi, W. (2013). Green supply chain performance measurement using the analytic hierarchy process: a comparative analysis of manufacturing organisations. Production Planning and Control, 24(8-9), 702-720.
5. Freeman, J., Chen, T. (2015). Green supplier selection using an AHP-Entropy-TOPSIS framework. Supply Chain Management, 20(3), 327-340.
6. Zhou, Y., Xu, L., Muhammad Shaikh, G. (2019). Evaluating and prioritizing the green supply chain management practices in Pakistan: Based on delphi and fuzzy AHP approach. Symmetry, 11(11), 1346.
7. Govindan, K., Khodaverdi, R., Vafadarnikjoo, A. (2015). Intuitionistic fuzzy based DEMATEL method for developing green practices and performances in a green supply chain. Expert Systems with Applications, 42(20), 7207-7220.
8. Mathiyazhagan, K., Govindan, K., NoorulHaq, A., Geng, Y. (2013). An ISM approach for the barrier analysis in implementing green supply chain management. Journal of Cleaner Production, 47, 283-297.
9. Luthra, S., Qadri, M. A., Garg, D., Haleem, A. (2014). Identification of critical success factors to achieve high green supply chain management performances in Indian automobile industry. International Journal of Logistics Systems and Management 1, 18(2), 170-199.
10. Rozar, N. M., Mahmood, W. H. W., Ibrahim, A., Razik, M. A. (2015). A study of success factors in green supply chain management in manufacturing industries in Malaysia. Journal of Economics, Business and Management, 3(2), 287-291.
11. Saaty, T. L. (1980). The analytic hierarchy process McGraw-Hill. New York, 324.

Sử dụng AHP trong đánh giá công tác quản lý chuỗi cung ứng xanh

đối với công ty sản xuất sản phẩm và linh kiện điện ở Việt Nam

Lê Kế Đức

Khoa Điện - Điện tử, Trường Đại học Duy Tân

TÓM TẮT:

Nghiên cứu này nhằm đánh giá hoạt động quản lý chuỗi cung ứng xanh (GSCM) trong ngành sản xuất sản phẩm và linh kiện điện của Việt Nam với các mẫu nghiên cứu là các nhà sản xuất sản phẩm và linh kiện điện tại Việt Nam. Các biện pháp GSCM được đánh giá từ 3 quan điểm, gồm: thiết kế, quy trình sản xuất và quan điểm quản lý. Dữ liệu từ bảng câu hỏi của các nhà sản xuất sản phẩm và linh kiện điện tại Việt Nam được sử dụng để đánh giá trọng số của các thước đo GSCM. Tầm quan trọng của các biện pháp GSCM đối với môi trường được xác định bằng việc sử dụng quy trình phân tích thứ bậc (AHP) với thang đo Saaty.

Từ khóa: quản lý chuỗi cung ứng xanh, quy trình phân tích thứ bậc (AHP), ngành sản xuất sản phẩm và linh kiện điện.

[Tạp chí Công Thương - Các kết quả nghiên cứu khoa học và ứng dụng công nghệ, 

Số 10, tháng 5 năm 2022]