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A case study of using DEMATEL method to identify critical factors in green supply chain management
Applied Mathematics and Computation 256 (2015) 394–403
Contents lists available at ScienceDirect
Applied Mathematics and Computation journal homepage: www.elsevier.com/locate/amc
A case study of using DEMATEL method to identify critical factors in green supply chain management Hsin-Hung Wu a,⇑, Shih-Yu Chang a,b a b
Department of Business Administration, National Changhua University of Education, No. 2 Shida Road, Changhua City 500, Taiwan Quality Assurance Department, SDI Corporation, No. 260 Section 2, Chang Nan Road, Changhua City 500, Taiwan
a r t i c l e
i n f o
Keywords: Green supply chain management Decision making trial and evaluation laboratory Causal relationship Organization involvement Supplier management Top management support
a b s t r a c t This case study uses four dimensions and twenty factors developed by Hsu and Hu [5] suitable for electrical and electronic industries in Taiwan to identify the critical dimensions and factors and then construct the digraphs to show causal relationships among dimensions and factors within each dimension in green supply chain management (GSCM). Ten major customers of this case group were invited from international semiconductor packaging plants to evaluate dimensions and factors by decision making trial and evaluation laboratory. The results show that both organization involvement and supplier management are causes, and organization involvement is the most critical dimension in GSCM. Moreover, top management support and environmental policy for GSCM are the two critical factors in organization involvement that should be placed in highest priority when GSCM is to be implemented. In addition, establish environmental requirements for purchasing items and implementing green purchasing are the two important factors in supplier management. The decision maker can take actions on causal dimensions/factors in high priority in GSCM since the implementation on these causal dimensions/factors will have impacts on receiving dimensions/factors in GSCM implementation. Ó 2015 Elsevier Inc. All rights reserved.
1. Introduction Walker et al. [23] stated that there is an increasing role for organizations to minimize impacts on the environment by reducing packaging and waste, assessing vendors on the environmental performance, developing environmental friendly products, and reducing carbon emissions when goods are shipped. In addition, Kuo et al. [9] pointed out that energy and material optimization and environmental issues in the life-cycle have become critically important to both the general public and government agencies. More and more activities are demanding governments and companies to set up environmental friendly production technologies to avoid or reduce harmful emissions into air, water, and soil [4,8,10]. In order to survive for both reducing the costs and maintaining good environment, green supply chain management (GSCM) has emerged as an approach for organizations to balance these competitive requirements [1,14,15,17,30,31]. Toke et al. [21] and Testa and Iraldo [20] depicted that GSCM driven by the escalating deterioration of environment is not only about being environmental friendly but also about good business sense and higher profit. Hsu and Hu [5] emphasized that GSCM has been adopted by leading electronic industry companies such as Dell, IBM, Motorola, Sony, Panasonic, and Toshiba as a proactive strategy. Moreover, similar regulations have also been designed ⇑ Corresponding author. E-mail address: [email protected] (H.-H. Wu). http://dx.doi.org/10.1016/j.amc.2015.01.041 0096-3003/Ó 2015 Elsevier Inc. All rights reserved.
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throughout the world in the United States, China, Japan, and Korea. The emerging issue in green products has become a new trend in Asia since Japan, Taiwan, and Korea are the heralds in terms of green electronic products [2]. With GSCM, the organization can view it as the primary strategy to comply with the requirements of legislations, maintain competitive advantage, and increase market share through the process of improving the overall environmental impacts of products [13,16,32]. In Taiwan, most electrical and electronic manufacturers operate on the basis of original equipment manufacturing (OEM) and original design manufacturing (ODM) [5,6]. These companies could be very sensitive in emerging environmental directives such as WEEE (Waste Electrical and Electronic Equipment), RoHS (Restriction of Hazardous Substances), and EuP (Energy using Products) as a member of green supply chain management. A case study is presented in this research. This case group in electronic department has business in semiconductor lead frames (discrete/transistor, IC and other lead frames) and is a downstream supplier of the semiconductor packaging plants. In addition, since 2009, this case group has become the top five lead frame suppliers globally. With the emerging GSCM, this case electronic department has received ISO 14001: 2004 certification and has to follow the environmental regulations requested by the semiconductor packaging plants. In this study, a decision making trial and evaluation laboratory (DEMATEL) method is applied to identify critical factors and their causal relationships of case group in electronic department in green supply chain management. 2. Literature review 2.1. Critical factors of GSCM Hu and Hsu [7] used in-depth interviews with three senior quality assurance and product assurance representatives from the three companies to summarize critical factors of GSCM practices. In addition, through literature review, consultation experience, and interviews, twenty-five critical factors were identified as shown in Table 1. Hsu and Hu [5] further used these twenty-five factors to design the questionnaire and then sampled the members of Taiwan Electrical and Electronics Manufacturers Association (TEEMA) by the perceptions and experiences of GSCM-based companies in the Taiwanese electrical and electronics industries. By factor analysis, four dimensions were formed along with twenty factors left, and the detailed information is provided in Table 2 [5,6]. These four dimensions and twenty factors provide a better understanding and help identify the opportunities to implement green supply chain management. Hsu and Hu [5] applied fuzzy analytic hierarchy process (AHP) to prioritize the importance of four dimensions and twenty factors by assuming these dimensions/factors are independent with the underlying assumption of AHP. Nine industrial experts who have substantial experience in GSCM implementation in large and medium assembly manufacturers in Taiwanese electronics industries were invited to conduct the survey. The results show that supplier management is the most essential dimension with the weight of 0.4337, followed by organization involvement with the weight of 0.3234, life cycle management with the weight of 0.1228, and product recycling with the weight of 0.1161. For factors, establish an environTable 1 Twenty-five critical factors regarding GSCM practices. Element 1. Supplier meeting 2. Environmental auditing for suppliers 3. Suppliers environmental questionnaire 4. Requesting compliance statement 5. Asking for product testing report 6. Demanding bill of material 7. Establishing environmental requirements for purchasing items 8. Implementing green purchasing 9. Collaborative R&D with suppliers 10. Information system 11. Joining local recycling organizations 12. Collaboration on product recycling with the same sector industry 13. Product disassembly manuals 14. Green design 15. Environmental education and training 16. Top management support 17. Environmental policy for green supply chain management 18. Cross-function integration 19. Manpower involvement 20. Effective communication platform within companies and with suppliers 21. Establish an environmental risk management system for green supply chain management 22. Supplier evaluation and selection 23. Tracking the development of directives 24. Applying life-cycle analysis to carry out eco-report 25. Establish an environmental database of products
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H.-H. Wu, S.-Y. Chang / Applied Mathematics and Computation 256 (2015) 394–403 Table 2 Four dimensions with twenty critical factors. Dimension
Critical factors
Supplier management
1. 2. 3. 4. 5. 6. 7.
Product recycling
1. Joining local recycling organizations 2. Collaboration on products recycling with the same sector industry 3. Produce disassembly manual
Organization involvement
1. 2. 3. 4. 5. 6. 7. 8.
Life cycle management
1. Applying LCA to carry out eco-report 2. Establish an environmental database of products
Environmental auditing for suppliers Supplier environmental questionnaire Requesting compliance statement Asking for product testing report Demanding bill of material Establishing environmental requirements for purchasing items Implementing green purchasing
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 management system for GSCM Supplier evaluation and selection
mental database of products is the most critical factor, followed by asking for product testing report, top management support, demanding bill of material, and environmental auditing for suppliers. 2.2. DEMATEL method Decision-making trial and evaluation laboratory method was originally developed by the Science and Human Affairs Program of the Battelle Memorial Institute of Geneva and intended to study and resolve the complicated and intertwined problem by understanding the specific problem, the cluster of intertwined problem, and identification of workable solutions by a hierarchical structure [11,18,24,25,28]. The traditional techniques, such as analytic hierarchy process, require that the elements are independent, while DEMATEL method does not require this basic assumption. In contrast, this approach uses the structural modeling technique to identify the possible interdependence among the elements in a system by constructing digraphs to show the causal relationships and the strengths of influence among the elements [12,19,22,26,29]. The computational procedures of DEMATEL method are summarized into the following four major steps [3,18,25,26,27]: Step 1: Compute the average matrix. The direct influence between any two factors is evaluated by each respondent by an integer score of 0, 1, 2, and 3 representing ‘‘no influence’’, ‘‘low influence’’, ‘‘medium influence’’, and ‘‘high influence’’, respectively. The notation of xij indicates the degree to which the respondent believes factor i affects factor j. For i = j, the diagonal elements are set to zero, which indicates no influence. An n n non-negative matrix will be established for each respondent as Xk = ½xkij , where k is the number of respondents with 1 6 k 6 H, and n is the number of elements in the system. If there are H respondents, X1, X2, X3, . . ., and XH will be established. To aggregate all opinions from H respondents, the average matrix A = [aij] can be constructed as follows:
aij ¼
H 1X xk H k¼1 ij
Step 2: Calculate the normalized initial direct-relation matrix D by D = A S, where S =
ð1Þ 1P . n max16i6n aij j¼1
Each element in matrix
D falls between zero and one. Step 3: Compute the total relation matrix T by T = D(I D)1, where I is the identity matrix. Let r and c be n 1 and 1 n vectors representing the sum of rows and sum of columns of the total relation matrix T, respectively. Denote ri be the sum of ith row in matrix T, then r i summarizes both direct and indirect effects given by factor i to the other factors. Suppose cj be the sum of jth column in matrix T, then cj shows both direct and indirect effects by factor j from the other factors. When j = i, the sum (ri + cj) shows the total effects given and received by factor i. Thus, (ri + cj) indicates the degree of importance for factor i in the entire system. In contrast, the difference (ricj) represents the net effect that factor i contributes to the system. Specifically, if (ricj) is positive, factor i is a net cause, while factor i is a net receiver or result if (ricj) is negative. Step 4: Set up a threshold value to obtain the digraph. Matrix T might provide much information on how one factor affects another such that it is necessary for a decision maker to set up a threshold value to filter out some negligible effects by showing the effects greater than the threshold value in digraph. The threshold value can be set up by computing the average of the elements in Matrix T. The digraph can be acquired by mapping the dataset of (r + c, rc).
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3. A case study Hsu and Hu [5] have identified four dimensions and twenty factors as shown in Table 2 to effectively implement green supply chain management in Taiwan, which is very suitable in this case study. Thus, the designed questionnaire items were based on these four dimensions and twenty factors. Please refer to Appendix A for the detailed information of the designed questionnaire. In addition, this case group located in Taiwan has business with ten major customers of international semiconductor packaging plants. In order to identify critical dimensions and factors, ten questionnaires were issued by e-mail to the contractor windows of green supply chain management department from three Taiwanese companies, three Chinese companies, two Japanese companies, and two Malaysian companies of international semiconductor packaging plants. The respondents’ positions, departments, and affiliated countries are summarized in Table 3. From January 5, 2011 to February 15, 2011, ten questionnaires have been received and were all valid. All of the respondents said that a green quality management system has been built in its own company and a green supply chain management system has been built as well. Besides, all respondents agreed that they are going to choose the green product suppliers as a priority partner for their procurement policy. Moreover, six out of ten respondents strongly agreed and the other four respondents also agreed that the promotion of green supply chain will be helpful to drive the expansion and implementation of the global environmental protection. The causal relationship among four dimensions (supplier management, product recycling, organization involvement, and life cycle management) using DEMATEL method is depicted below. The computation is based upon these ten respondents, and these ten 7 7 matrices are
2
3 0 1 3 2 61 0 3 27 6 7 X1 ¼ 6 7; 43 3 0 35
2
3 0 1 3 2 61 0 1 37 6 7 X2 ¼ 6 7; 42 2 0 25
3 0 2 3 1 61 0 3 27 6 7 X3 ¼ 6 7; 43 2 0 15
3 0 2 2 3 62 0 3 27 6 7 X4 ¼ 6 7; 42 3 0 35
2 2 3 0 3 0 2 3 1 62 0 3 27 7 6 X5 ¼ 6 7; 43 3 0 25
1 3 2 0 3 0 3 3 3 63 0 2 37 7 6 X6 ¼ 6 7; 43 2 0 15
1 2 1 0 3 0 1 2 3 61 0 1 17 7 6 X7 ¼ 6 7; 42 1 0 25
3 2 3 0 3 0 2 3 2 62 0 2 37 7 6 X8 ¼ 6 7; 43 2 0 25
1 2 2 0 3 0 2 2 3 61 0 3 17 7 6 X9 ¼ 6 7; 43 3 0 25
2 3 1 0 3 2 0 1 2 3 61 0 1 27 7 6 and X 10 ¼ 6 7: 42 3 0 35
2
2
2
1 2 3 0
2
2
3 1 2 0
2
2
2 3 2 0
1 2 2 0
The average matrix A by aggregating ten respondents is described by the following equation:
3 0 1:7 2:6 2:3 6 1:5 0 2:2 2:1 7 7 6 A¼6 7: 4 2:6 2:4 0 2:1 5 2
1:7 2:2 2:1 0 The normalized initial direct-relation matrix D in Step 2 and total relation matrix T in Step 3 are as follows:
2
0
0:239 0:366 0:324
3
6 0:211 0 0:310 0:296 7 7 6 D¼6 7; 4 0:366 0:338 0 0:296 5 0:239 0:310
0:296 0
Table 3 Respondents’ positions, departments, and affiliated countries. Respondent
Position
Department
Country
1 2 3 4 5 6 7 8 9 10
Engineer Senior Engineer Manager Manager Manager Manager Manager Manager Manager Manager
Supplier Chain Quality Management Supplier Quality Management Quality Assurance Quality Management Quality Assurance and Reliability Supplier Quality Management Quality Assurance Environmental Quality in Products Supplier Quality Management Supplier Quality Management
Taiwan Taiwan Taiwan China China China Japan Japan Malaysia Malaysia
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H.-H. Wu, S.-Y. Chang / Applied Mathematics and Computation 256 (2015) 394–403
and
2
1:9697 2:2944 2:5034 2:3824
3
6 1:9446 1:8895 2:2437 2:1495 7 7 6 T ¼ DðI DÞ1 ¼ 6 7: 4 2:3375 2:4593 2:3512 2:4773 5 2:0045
2:1721 2:2858 1:9690
Table 4 summarizes the direct and indirect effects of four dimensions. Finally, the threshold value used in Step 4 is to compute the average of the elements in matrix T, which is 2.2146. The digraph of these four dimensions is shown in Fig. 1. From Table 4 and Fig. 1, organization involvement and supplier management are net causes due to positive (r c) values, while product recycling and life cycle management are net receivers because of negative (r c) values. Organization involvement has the highest (r + c) value indicating that this dimension is the most essential dimension. By further discussing the directions of arrows, organization involvement and supplier management have mutual interaction. That is, either one is going to affect the other. At the same time, pairs of ‘‘organization involvement and product recycling’’ and ‘‘organization involvement and life cycle management’’ have the mutual influences. Based on the above information, organization involvement is the most critical dimension to effectively implement green supply chain management. By the same token, the sum of effects given and received among seven factors of supplier management is summarized in Table 5, and the digraph is depicted in Fig. 2. Establishing environmental requirements for purchasing items is the most essential factor followed by supplier environmental questionnaire, asking for product testing report, and implementing green purchasing. However, supplier environmental questionnaire and asking for product testing report are both net receivers influenced by five and four factors, respectively. On the other hand, establishing environmental requirements for purchasing items and implementing green purchasing are both net causes and will affect five factors. That is, establishing environmental requirements for purchasing items is the most critical factor in supplier management followed by implementing green purchasing. Table 6 provides the sum of effects given and received among three factors of product recycling, and the digraph is shown in Fig. 3. Produce disassembly manual has the highest importance in terms of (r + c) value and has mutual influences on both joining local recycling organization and collaboration on products recycling with the same sector industry. Therefore, produce disassembly manual is the most critical factor in product recycling. The sum of effects given and received among eight factors of organization involvement is provided in Table 7, and the digraph is depicted in Fig. 4. Top management support, environmental policy for GSCM, and establish an environmental risk management system for GSCM is the three most important factors in terms of (r + c) values. From causal relationship viewpoints, top management support and environmental policy for GSCM are net causes, whereas establish an environmental risk management system for GSCM is a net receiver. Overall speaking, top management support and environmental policy for GSCM are the two factors that should be taken into account in highest priority in organization involvement since these two factors affect six factors. It is worth noting that no any factor influences manpower involvement. Besides, manpower involvement does not influence any factor. Table 4 The sum of influences given and received among these four dimensions. Dimension
r+c
r–c
Supplier management Product recycling Organization involvement Life cycle management
17.4062 17.0426 19.0094 17.4096
0.8936 0.5880 0.2412 0.5468
Fig. 1. The digraph of four dimensions.
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H.-H. Wu, S.-Y. Chang / Applied Mathematics and Computation 256 (2015) 394–403 Table 5 The sum of effects given and received among seven factors of supplier management. Dimension
r+c
r–c
Environmental auditing for suppliers Supplier environmental questionnaire Requesting compliance statement Asking for product testing report Demanding bill of material Establishing environmental requirements for purchasing items Implementing green purchasing
44.5132 45.6856 43.5154 45.4166 43.2088 45.8025 45.1699
0.6906 0.7918 1.9912 0.03 0.4392 0.6405 1.0427
Fig. 2. The digraph of seven factors of supplier management. Table 6 The sum of effects given and received among three factors of product recycling. Dimension
r+c
rc
Joining local recycling organization Collaboration on products recycling with the same sector industry Produce disassembly manual
8.1741 8.2907 10.11
0.3111 0.3883 0.0772
Fig. 3. The digraph of three factors of product recycling.
For life cycle management, there are two factors, namely applying LCA to carry out eco-report and establish an environ 0 2 , which indicates that these two mental database of products. Based on these ten respondents, the average matrix is 2 0 factors are equally important and mutually influenced. Thus, there is no need to further analyze the total effect and the digraph. Based on the above analyses, organization involvement is the most critical dimension and will affect the other three dimensions. Hsu and Hu [5] stated that supplier management is the most important dimension, but in our study supplier management ranks second in terms of causal relationships. The result is different to that of Hsu and Hu [5]. The reason is that using AHP to compute the importance of dimensions needs to assume that these dimensions are mutually independent. However, based upon our analysis, causal relationships do exist between dimensions.
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H.-H. Wu, S.-Y. Chang / Applied Mathematics and Computation 256 (2015) 394–403 Table 7 The sum of effects given and received among eight factors of organization involvement. Dimension
r+c
rc
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 management system for GSCM Supplier evaluation and selection
20.1048 21.8043 21.4387 20.0725 16.9354 20.1427 21.2727 19.6719
0.3458 0.2427 0.1765 0.7259 0.0174 0.3575 0.1753 0.2839
Fig. 4. The digraph of eight factors of organization involvement.
By further discussing the factors, if a dimension has more factors, the relative weight for each factor tends to be smaller. Establish an environmental database of products in the dimension of life cycle management is the most important factor followed by asking for product testing report, top management support, demanding bill of material, and environmental auditing for suppliers [5]. In our study, top management is the most important factor in dimension of organization involvement and establish environmental requirements for purchasing items has the highest importance in dimension of supplier management in terms of causal viewpoints. Moreover, our study provides the contextual relationships within each dimension. Therefore, the decision maker can easily identify critical dimensions and factors within each dimension and their relative cause-effect relationships. Therefore, to effectively implement green supply chain management, dimensions that belong to net causes should be placed in higher priority than those belonging to net receivers. Moreover, factors within each dimension that are net causes should be taken into consideration in higher priority as well. 4. Conclusions This study uses four dimensions and twenty factors developed by Hsu and Hu [5] as a basis to conduct a case study. The case group is a top five downstream supplier in lead frames for the semiconductor packaging plants. By asking their ten major customers of international semiconductor packaging plants, the results show that organization involvement is the most important dimension in order to implement green supply chain management effectively, and supplier management is the second important factor in terms of cause-effect relationships. Within organization involvement, top management support and environmental policy for green supply chain management are the two factors that should be implemented first. For supplier management, establish environmental requirements for purchasing items and implementing green purchasing should be implemented in highest priority. By using DEMATEL method, the decision maker can identify causal dimension(s) and factor(s) within each dimension and use the digraphs by understanding the relative cause-effect relationships between dimensions and factors. Therefore, this study provides another viewpoint to implement green supply chain management without assuming dimensions and factors are mutually independent. Any actions taken on net causes (either dimension or factor) will have direct/indirect effects on the corresponding net receivers (either dimension or factor). In fact, the decision maker can pay much attention and allocate resources to cause dimension(s) and factor(s) to effectively implement green supply chain management. Appendix A The designed questionnaire Evaluation for the influence relationships among four dimensions
Dimensions
Supplier management
Product recycling
Organization involvement
Life cycle management
Supplier Management Product Recycling Organization Involvement Life Cycle Management
Factors of supplier management
Environmental auditing for suppliers
Supplier environmental questionnaire
Requesting compliance statement
Asking for product testing report
Demanding bill of material
Establishing environmental requirements for purchasing items
Implementing green purchasing
Environmental auditing for suppliers Supplier environmental questionnaire Requesting compliance statement Asking for product testing report Demanding bill of material Establishing environmental requirements for purchasing items Implementing green purchasing
(0: No influence, 1: Low influence, 2: Medium influence, 3: High influence) Evaluation for the influence relationships among three factors of product recycling Factors of product recycling
Joining local recycling organizations
Collaboration on products recycling with the same sector industry
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(0: No influence, 1: Low influence, 2: Medium influence, 3: High influence) Evaluation for the influence relationships among seven factors of supplier management
Produce disassembly manual
Joining local recycling organizations Collaboration on products recycling with the same sector industry Produce disassembly manual
401
402
(0: No influence, 1: Low influence, 2: Medium influence, 3: High influence) Evaluation for the influence relationships among eight factors of organization involvement Factors of organization involvement
Green design
Top management support
Environmental policy for GSCM
Crossfunction integration
Manpower involvement
Effective communication platform within companies and with suppliers
Establish an environmental risk management system for GSCM
Supplier evaluation and selection
(0: No influence, 1: Low influence, 2: Medium influence, 3: High influence) Evaluation for the influence relationships between two factors of life cycle management
Factors of life cycle management
Applying LCA to carry out eco-report
Applying LCA to carry out eco-report Establish an environmental database of products (0: No influence, 1: Low influence, 2: Medium influence, 3: High influence)
Establish an environmental database of products
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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 management system for GSCM Supplier evaluation and selection
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Contents lists available at ScienceDirect
Applied Mathematics and Computation journal homepage: www.elsevier.com/locate/amc
A case study of using DEMATEL method to identify critical factors in green supply chain management Hsin-Hung Wu a,⇑, Shih-Yu Chang a,b a b
Department of Business Administration, National Changhua University of Education, No. 2 Shida Road, Changhua City 500, Taiwan Quality Assurance Department, SDI Corporation, No. 260 Section 2, Chang Nan Road, Changhua City 500, Taiwan
a r t i c l e
i n f o
Keywords: Green supply chain management Decision making trial and evaluation laboratory Causal relationship Organization involvement Supplier management Top management support
a b s t r a c t This case study uses four dimensions and twenty factors developed by Hsu and Hu [5] suitable for electrical and electronic industries in Taiwan to identify the critical dimensions and factors and then construct the digraphs to show causal relationships among dimensions and factors within each dimension in green supply chain management (GSCM). Ten major customers of this case group were invited from international semiconductor packaging plants to evaluate dimensions and factors by decision making trial and evaluation laboratory. The results show that both organization involvement and supplier management are causes, and organization involvement is the most critical dimension in GSCM. Moreover, top management support and environmental policy for GSCM are the two critical factors in organization involvement that should be placed in highest priority when GSCM is to be implemented. In addition, establish environmental requirements for purchasing items and implementing green purchasing are the two important factors in supplier management. The decision maker can take actions on causal dimensions/factors in high priority in GSCM since the implementation on these causal dimensions/factors will have impacts on receiving dimensions/factors in GSCM implementation. Ó 2015 Elsevier Inc. All rights reserved.
1. Introduction Walker et al. [23] stated that there is an increasing role for organizations to minimize impacts on the environment by reducing packaging and waste, assessing vendors on the environmental performance, developing environmental friendly products, and reducing carbon emissions when goods are shipped. In addition, Kuo et al. [9] pointed out that energy and material optimization and environmental issues in the life-cycle have become critically important to both the general public and government agencies. More and more activities are demanding governments and companies to set up environmental friendly production technologies to avoid or reduce harmful emissions into air, water, and soil [4,8,10]. In order to survive for both reducing the costs and maintaining good environment, green supply chain management (GSCM) has emerged as an approach for organizations to balance these competitive requirements [1,14,15,17,30,31]. Toke et al. [21] and Testa and Iraldo [20] depicted that GSCM driven by the escalating deterioration of environment is not only about being environmental friendly but also about good business sense and higher profit. Hsu and Hu [5] emphasized that GSCM has been adopted by leading electronic industry companies such as Dell, IBM, Motorola, Sony, Panasonic, and Toshiba as a proactive strategy. Moreover, similar regulations have also been designed ⇑ Corresponding author. E-mail address: [email protected] (H.-H. Wu). http://dx.doi.org/10.1016/j.amc.2015.01.041 0096-3003/Ó 2015 Elsevier Inc. All rights reserved.
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throughout the world in the United States, China, Japan, and Korea. The emerging issue in green products has become a new trend in Asia since Japan, Taiwan, and Korea are the heralds in terms of green electronic products [2]. With GSCM, the organization can view it as the primary strategy to comply with the requirements of legislations, maintain competitive advantage, and increase market share through the process of improving the overall environmental impacts of products [13,16,32]. In Taiwan, most electrical and electronic manufacturers operate on the basis of original equipment manufacturing (OEM) and original design manufacturing (ODM) [5,6]. These companies could be very sensitive in emerging environmental directives such as WEEE (Waste Electrical and Electronic Equipment), RoHS (Restriction of Hazardous Substances), and EuP (Energy using Products) as a member of green supply chain management. A case study is presented in this research. This case group in electronic department has business in semiconductor lead frames (discrete/transistor, IC and other lead frames) and is a downstream supplier of the semiconductor packaging plants. In addition, since 2009, this case group has become the top five lead frame suppliers globally. With the emerging GSCM, this case electronic department has received ISO 14001: 2004 certification and has to follow the environmental regulations requested by the semiconductor packaging plants. In this study, a decision making trial and evaluation laboratory (DEMATEL) method is applied to identify critical factors and their causal relationships of case group in electronic department in green supply chain management. 2. Literature review 2.1. Critical factors of GSCM Hu and Hsu [7] used in-depth interviews with three senior quality assurance and product assurance representatives from the three companies to summarize critical factors of GSCM practices. In addition, through literature review, consultation experience, and interviews, twenty-five critical factors were identified as shown in Table 1. Hsu and Hu [5] further used these twenty-five factors to design the questionnaire and then sampled the members of Taiwan Electrical and Electronics Manufacturers Association (TEEMA) by the perceptions and experiences of GSCM-based companies in the Taiwanese electrical and electronics industries. By factor analysis, four dimensions were formed along with twenty factors left, and the detailed information is provided in Table 2 [5,6]. These four dimensions and twenty factors provide a better understanding and help identify the opportunities to implement green supply chain management. Hsu and Hu [5] applied fuzzy analytic hierarchy process (AHP) to prioritize the importance of four dimensions and twenty factors by assuming these dimensions/factors are independent with the underlying assumption of AHP. Nine industrial experts who have substantial experience in GSCM implementation in large and medium assembly manufacturers in Taiwanese electronics industries were invited to conduct the survey. The results show that supplier management is the most essential dimension with the weight of 0.4337, followed by organization involvement with the weight of 0.3234, life cycle management with the weight of 0.1228, and product recycling with the weight of 0.1161. For factors, establish an environTable 1 Twenty-five critical factors regarding GSCM practices. Element 1. Supplier meeting 2. Environmental auditing for suppliers 3. Suppliers environmental questionnaire 4. Requesting compliance statement 5. Asking for product testing report 6. Demanding bill of material 7. Establishing environmental requirements for purchasing items 8. Implementing green purchasing 9. Collaborative R&D with suppliers 10. Information system 11. Joining local recycling organizations 12. Collaboration on product recycling with the same sector industry 13. Product disassembly manuals 14. Green design 15. Environmental education and training 16. Top management support 17. Environmental policy for green supply chain management 18. Cross-function integration 19. Manpower involvement 20. Effective communication platform within companies and with suppliers 21. Establish an environmental risk management system for green supply chain management 22. Supplier evaluation and selection 23. Tracking the development of directives 24. Applying life-cycle analysis to carry out eco-report 25. Establish an environmental database of products
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H.-H. Wu, S.-Y. Chang / Applied Mathematics and Computation 256 (2015) 394–403 Table 2 Four dimensions with twenty critical factors. Dimension
Critical factors
Supplier management
1. 2. 3. 4. 5. 6. 7.
Product recycling
1. Joining local recycling organizations 2. Collaboration on products recycling with the same sector industry 3. Produce disassembly manual
Organization involvement
1. 2. 3. 4. 5. 6. 7. 8.
Life cycle management
1. Applying LCA to carry out eco-report 2. Establish an environmental database of products
Environmental auditing for suppliers Supplier environmental questionnaire Requesting compliance statement Asking for product testing report Demanding bill of material Establishing environmental requirements for purchasing items Implementing green purchasing
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 management system for GSCM Supplier evaluation and selection
mental database of products is the most critical factor, followed by asking for product testing report, top management support, demanding bill of material, and environmental auditing for suppliers. 2.2. DEMATEL method Decision-making trial and evaluation laboratory method was originally developed by the Science and Human Affairs Program of the Battelle Memorial Institute of Geneva and intended to study and resolve the complicated and intertwined problem by understanding the specific problem, the cluster of intertwined problem, and identification of workable solutions by a hierarchical structure [11,18,24,25,28]. The traditional techniques, such as analytic hierarchy process, require that the elements are independent, while DEMATEL method does not require this basic assumption. In contrast, this approach uses the structural modeling technique to identify the possible interdependence among the elements in a system by constructing digraphs to show the causal relationships and the strengths of influence among the elements [12,19,22,26,29]. The computational procedures of DEMATEL method are summarized into the following four major steps [3,18,25,26,27]: Step 1: Compute the average matrix. The direct influence between any two factors is evaluated by each respondent by an integer score of 0, 1, 2, and 3 representing ‘‘no influence’’, ‘‘low influence’’, ‘‘medium influence’’, and ‘‘high influence’’, respectively. The notation of xij indicates the degree to which the respondent believes factor i affects factor j. For i = j, the diagonal elements are set to zero, which indicates no influence. An n n non-negative matrix will be established for each respondent as Xk = ½xkij , where k is the number of respondents with 1 6 k 6 H, and n is the number of elements in the system. If there are H respondents, X1, X2, X3, . . ., and XH will be established. To aggregate all opinions from H respondents, the average matrix A = [aij] can be constructed as follows:
aij ¼
H 1X xk H k¼1 ij
Step 2: Calculate the normalized initial direct-relation matrix D by D = A S, where S =
ð1Þ 1P . n max16i6n aij j¼1
Each element in matrix
D falls between zero and one. Step 3: Compute the total relation matrix T by T = D(I D)1, where I is the identity matrix. Let r and c be n 1 and 1 n vectors representing the sum of rows and sum of columns of the total relation matrix T, respectively. Denote ri be the sum of ith row in matrix T, then r i summarizes both direct and indirect effects given by factor i to the other factors. Suppose cj be the sum of jth column in matrix T, then cj shows both direct and indirect effects by factor j from the other factors. When j = i, the sum (ri + cj) shows the total effects given and received by factor i. Thus, (ri + cj) indicates the degree of importance for factor i in the entire system. In contrast, the difference (ricj) represents the net effect that factor i contributes to the system. Specifically, if (ricj) is positive, factor i is a net cause, while factor i is a net receiver or result if (ricj) is negative. Step 4: Set up a threshold value to obtain the digraph. Matrix T might provide much information on how one factor affects another such that it is necessary for a decision maker to set up a threshold value to filter out some negligible effects by showing the effects greater than the threshold value in digraph. The threshold value can be set up by computing the average of the elements in Matrix T. The digraph can be acquired by mapping the dataset of (r + c, rc).
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3. A case study Hsu and Hu [5] have identified four dimensions and twenty factors as shown in Table 2 to effectively implement green supply chain management in Taiwan, which is very suitable in this case study. Thus, the designed questionnaire items were based on these four dimensions and twenty factors. Please refer to Appendix A for the detailed information of the designed questionnaire. In addition, this case group located in Taiwan has business with ten major customers of international semiconductor packaging plants. In order to identify critical dimensions and factors, ten questionnaires were issued by e-mail to the contractor windows of green supply chain management department from three Taiwanese companies, three Chinese companies, two Japanese companies, and two Malaysian companies of international semiconductor packaging plants. The respondents’ positions, departments, and affiliated countries are summarized in Table 3. From January 5, 2011 to February 15, 2011, ten questionnaires have been received and were all valid. All of the respondents said that a green quality management system has been built in its own company and a green supply chain management system has been built as well. Besides, all respondents agreed that they are going to choose the green product suppliers as a priority partner for their procurement policy. Moreover, six out of ten respondents strongly agreed and the other four respondents also agreed that the promotion of green supply chain will be helpful to drive the expansion and implementation of the global environmental protection. The causal relationship among four dimensions (supplier management, product recycling, organization involvement, and life cycle management) using DEMATEL method is depicted below. The computation is based upon these ten respondents, and these ten 7 7 matrices are
2
3 0 1 3 2 61 0 3 27 6 7 X1 ¼ 6 7; 43 3 0 35
2
3 0 1 3 2 61 0 1 37 6 7 X2 ¼ 6 7; 42 2 0 25
3 0 2 3 1 61 0 3 27 6 7 X3 ¼ 6 7; 43 2 0 15
3 0 2 2 3 62 0 3 27 6 7 X4 ¼ 6 7; 42 3 0 35
2 2 3 0 3 0 2 3 1 62 0 3 27 7 6 X5 ¼ 6 7; 43 3 0 25
1 3 2 0 3 0 3 3 3 63 0 2 37 7 6 X6 ¼ 6 7; 43 2 0 15
1 2 1 0 3 0 1 2 3 61 0 1 17 7 6 X7 ¼ 6 7; 42 1 0 25
3 2 3 0 3 0 2 3 2 62 0 2 37 7 6 X8 ¼ 6 7; 43 2 0 25
1 2 2 0 3 0 2 2 3 61 0 3 17 7 6 X9 ¼ 6 7; 43 3 0 25
2 3 1 0 3 2 0 1 2 3 61 0 1 27 7 6 and X 10 ¼ 6 7: 42 3 0 35
2
2
2
1 2 3 0
2
2
3 1 2 0
2
2
2 3 2 0
1 2 2 0
The average matrix A by aggregating ten respondents is described by the following equation:
3 0 1:7 2:6 2:3 6 1:5 0 2:2 2:1 7 7 6 A¼6 7: 4 2:6 2:4 0 2:1 5 2
1:7 2:2 2:1 0 The normalized initial direct-relation matrix D in Step 2 and total relation matrix T in Step 3 are as follows:
2
0
0:239 0:366 0:324
3
6 0:211 0 0:310 0:296 7 7 6 D¼6 7; 4 0:366 0:338 0 0:296 5 0:239 0:310
0:296 0
Table 3 Respondents’ positions, departments, and affiliated countries. Respondent
Position
Department
Country
1 2 3 4 5 6 7 8 9 10
Engineer Senior Engineer Manager Manager Manager Manager Manager Manager Manager Manager
Supplier Chain Quality Management Supplier Quality Management Quality Assurance Quality Management Quality Assurance and Reliability Supplier Quality Management Quality Assurance Environmental Quality in Products Supplier Quality Management Supplier Quality Management
Taiwan Taiwan Taiwan China China China Japan Japan Malaysia Malaysia
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and
2
1:9697 2:2944 2:5034 2:3824
3
6 1:9446 1:8895 2:2437 2:1495 7 7 6 T ¼ DðI DÞ1 ¼ 6 7: 4 2:3375 2:4593 2:3512 2:4773 5 2:0045
2:1721 2:2858 1:9690
Table 4 summarizes the direct and indirect effects of four dimensions. Finally, the threshold value used in Step 4 is to compute the average of the elements in matrix T, which is 2.2146. The digraph of these four dimensions is shown in Fig. 1. From Table 4 and Fig. 1, organization involvement and supplier management are net causes due to positive (r c) values, while product recycling and life cycle management are net receivers because of negative (r c) values. Organization involvement has the highest (r + c) value indicating that this dimension is the most essential dimension. By further discussing the directions of arrows, organization involvement and supplier management have mutual interaction. That is, either one is going to affect the other. At the same time, pairs of ‘‘organization involvement and product recycling’’ and ‘‘organization involvement and life cycle management’’ have the mutual influences. Based on the above information, organization involvement is the most critical dimension to effectively implement green supply chain management. By the same token, the sum of effects given and received among seven factors of supplier management is summarized in Table 5, and the digraph is depicted in Fig. 2. Establishing environmental requirements for purchasing items is the most essential factor followed by supplier environmental questionnaire, asking for product testing report, and implementing green purchasing. However, supplier environmental questionnaire and asking for product testing report are both net receivers influenced by five and four factors, respectively. On the other hand, establishing environmental requirements for purchasing items and implementing green purchasing are both net causes and will affect five factors. That is, establishing environmental requirements for purchasing items is the most critical factor in supplier management followed by implementing green purchasing. Table 6 provides the sum of effects given and received among three factors of product recycling, and the digraph is shown in Fig. 3. Produce disassembly manual has the highest importance in terms of (r + c) value and has mutual influences on both joining local recycling organization and collaboration on products recycling with the same sector industry. Therefore, produce disassembly manual is the most critical factor in product recycling. The sum of effects given and received among eight factors of organization involvement is provided in Table 7, and the digraph is depicted in Fig. 4. Top management support, environmental policy for GSCM, and establish an environmental risk management system for GSCM is the three most important factors in terms of (r + c) values. From causal relationship viewpoints, top management support and environmental policy for GSCM are net causes, whereas establish an environmental risk management system for GSCM is a net receiver. Overall speaking, top management support and environmental policy for GSCM are the two factors that should be taken into account in highest priority in organization involvement since these two factors affect six factors. It is worth noting that no any factor influences manpower involvement. Besides, manpower involvement does not influence any factor. Table 4 The sum of influences given and received among these four dimensions. Dimension
r+c
r–c
Supplier management Product recycling Organization involvement Life cycle management
17.4062 17.0426 19.0094 17.4096
0.8936 0.5880 0.2412 0.5468
Fig. 1. The digraph of four dimensions.
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H.-H. Wu, S.-Y. Chang / Applied Mathematics and Computation 256 (2015) 394–403 Table 5 The sum of effects given and received among seven factors of supplier management. Dimension
r+c
r–c
Environmental auditing for suppliers Supplier environmental questionnaire Requesting compliance statement Asking for product testing report Demanding bill of material Establishing environmental requirements for purchasing items Implementing green purchasing
44.5132 45.6856 43.5154 45.4166 43.2088 45.8025 45.1699
0.6906 0.7918 1.9912 0.03 0.4392 0.6405 1.0427
Fig. 2. The digraph of seven factors of supplier management. Table 6 The sum of effects given and received among three factors of product recycling. Dimension
r+c
rc
Joining local recycling organization Collaboration on products recycling with the same sector industry Produce disassembly manual
8.1741 8.2907 10.11
0.3111 0.3883 0.0772
Fig. 3. The digraph of three factors of product recycling.
For life cycle management, there are two factors, namely applying LCA to carry out eco-report and establish an environ 0 2 , which indicates that these two mental database of products. Based on these ten respondents, the average matrix is 2 0 factors are equally important and mutually influenced. Thus, there is no need to further analyze the total effect and the digraph. Based on the above analyses, organization involvement is the most critical dimension and will affect the other three dimensions. Hsu and Hu [5] stated that supplier management is the most important dimension, but in our study supplier management ranks second in terms of causal relationships. The result is different to that of Hsu and Hu [5]. The reason is that using AHP to compute the importance of dimensions needs to assume that these dimensions are mutually independent. However, based upon our analysis, causal relationships do exist between dimensions.
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H.-H. Wu, S.-Y. Chang / Applied Mathematics and Computation 256 (2015) 394–403 Table 7 The sum of effects given and received among eight factors of organization involvement. Dimension
r+c
rc
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 management system for GSCM Supplier evaluation and selection
20.1048 21.8043 21.4387 20.0725 16.9354 20.1427 21.2727 19.6719
0.3458 0.2427 0.1765 0.7259 0.0174 0.3575 0.1753 0.2839
Fig. 4. The digraph of eight factors of organization involvement.
By further discussing the factors, if a dimension has more factors, the relative weight for each factor tends to be smaller. Establish an environmental database of products in the dimension of life cycle management is the most important factor followed by asking for product testing report, top management support, demanding bill of material, and environmental auditing for suppliers [5]. In our study, top management is the most important factor in dimension of organization involvement and establish environmental requirements for purchasing items has the highest importance in dimension of supplier management in terms of causal viewpoints. Moreover, our study provides the contextual relationships within each dimension. Therefore, the decision maker can easily identify critical dimensions and factors within each dimension and their relative cause-effect relationships. Therefore, to effectively implement green supply chain management, dimensions that belong to net causes should be placed in higher priority than those belonging to net receivers. Moreover, factors within each dimension that are net causes should be taken into consideration in higher priority as well. 4. Conclusions This study uses four dimensions and twenty factors developed by Hsu and Hu [5] as a basis to conduct a case study. The case group is a top five downstream supplier in lead frames for the semiconductor packaging plants. By asking their ten major customers of international semiconductor packaging plants, the results show that organization involvement is the most important dimension in order to implement green supply chain management effectively, and supplier management is the second important factor in terms of cause-effect relationships. Within organization involvement, top management support and environmental policy for green supply chain management are the two factors that should be implemented first. For supplier management, establish environmental requirements for purchasing items and implementing green purchasing should be implemented in highest priority. By using DEMATEL method, the decision maker can identify causal dimension(s) and factor(s) within each dimension and use the digraphs by understanding the relative cause-effect relationships between dimensions and factors. Therefore, this study provides another viewpoint to implement green supply chain management without assuming dimensions and factors are mutually independent. Any actions taken on net causes (either dimension or factor) will have direct/indirect effects on the corresponding net receivers (either dimension or factor). In fact, the decision maker can pay much attention and allocate resources to cause dimension(s) and factor(s) to effectively implement green supply chain management. Appendix A The designed questionnaire Evaluation for the influence relationships among four dimensions
Dimensions
Supplier management
Product recycling
Organization involvement
Life cycle management
Supplier Management Product Recycling Organization Involvement Life Cycle Management
Factors of supplier management
Environmental auditing for suppliers
Supplier environmental questionnaire
Requesting compliance statement
Asking for product testing report
Demanding bill of material
Establishing environmental requirements for purchasing items
Implementing green purchasing
Environmental auditing for suppliers Supplier environmental questionnaire Requesting compliance statement Asking for product testing report Demanding bill of material Establishing environmental requirements for purchasing items Implementing green purchasing
(0: No influence, 1: Low influence, 2: Medium influence, 3: High influence) Evaluation for the influence relationships among three factors of product recycling Factors of product recycling
Joining local recycling organizations
Collaboration on products recycling with the same sector industry
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(0: No influence, 1: Low influence, 2: Medium influence, 3: High influence) Evaluation for the influence relationships among seven factors of supplier management
Produce disassembly manual
Joining local recycling organizations Collaboration on products recycling with the same sector industry Produce disassembly manual
401
402
(0: No influence, 1: Low influence, 2: Medium influence, 3: High influence) Evaluation for the influence relationships among eight factors of organization involvement Factors of organization involvement
Green design
Top management support
Environmental policy for GSCM
Crossfunction integration
Manpower involvement
Effective communication platform within companies and with suppliers
Establish an environmental risk management system for GSCM
Supplier evaluation and selection
(0: No influence, 1: Low influence, 2: Medium influence, 3: High influence) Evaluation for the influence relationships between two factors of life cycle management
Factors of life cycle management
Applying LCA to carry out eco-report
Applying LCA to carry out eco-report Establish an environmental database of products (0: No influence, 1: Low influence, 2: Medium influence, 3: High influence)
Establish an environmental database of products
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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 management system for GSCM Supplier evaluation and selection
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