methods. At this stage, there is no need for accurate quantitative evaluation of
suppliers, and the use of non-compensatory decision-making methods can be effective. Among the non-compensatory methods, the conjunctive satisfying method, by
specifying minimums for each indicator, can eliminate the options without these
minimums. At this stage, some companies also rank their suppliers. In previous
studies, the process of communicating with suppliers generally ended at this stage,
and these studies were limited to the ranking and selection of suppliers (Glock et al.
2017). But in practice and in recent approaches to supplier relationships, it has been
the focus of researchers and companies.
3.4 Supplier Segmentation Based on a Specific Approach
At this stage, after the qualified suppliers were identified, there is a need for
sustainable supplier segmentation. The sustainable supply chain has three main
economic, social, and environmental dimensions. The interaction between these
three dimensions also creates new economic-social, economic-environmental, and
socio-environmental dimensions. According to Carter and Rogers (2008), the main
goal of sustainable supply chain management is to achieve the strategic and transparent integration of business processes to achieve social and environmental goals to
improve the long-term economic performance of the whole chain. They developed a
model based on four factors of risk management, transparency, strategy, and culture
for a sustainable supply chain (Fig. 7.2).
Suppliers who pay particular attention to all of these three dimensions consider
the demands and needs of the customer with their optimal performance, so that they
protect the environment, have concern for community development, and contribute
to the economic prosperity. In other words, the companies emphasize on the
cooperation with sustainable suppliers that focus on all three social, environmental,
and economic dimensions. Companies that implement sustainability dimensions
strategically have higher economic performance compared to the companies that
only follow the goals of one or two dimensions of the triple dimensions (Carter and
Rogers 2008). Based on this model, the suppliers can be segmented from the
sustainability perspective. It is clear that any supplier can have a desired performance
in one, two, or all three dimensions of sustainability. For example, if a supplier has a
desired (high) performance in both economic and social dimensions, it will be
considered in the economic-social (equitable) segment. Of course, there are suppliers
that are not included in any of the triple dimensions of sustainability in the evaluation
and segmentation processes and do not meet the minimum requirements for cooperation; however, these suppliers are eliminated at the earlier stage. At this stage, the
suppliers need to be evaluated separately and based on the desired criteria for each
sustainability dimension. The criterion for high or low performance of suppliers in
each dimension is their scores. In this respect, for the scores below the threshold, the
performance is considered low, and for scores above the threshold, the performance
is considered high. Table 7.2 lists the supplier characteristics of each segment.
7 Sustainable Supplier Segmentation: A Practical Procedure
127
suppliers, and the use of non-compensatory decision-making methods can be effective. Among the non-compensatory methods, the conjunctive satisfying method, by
specifying minimums for each indicator, can eliminate the options without these
minimums. At this stage, some companies also rank their suppliers. In previous
studies, the process of communicating with suppliers generally ended at this stage,
and these studies were limited to the ranking and selection of suppliers (Glock et al.
2017). But in practice and in recent approaches to supplier relationships, it has been
the focus of researchers and companies.
3.4 Supplier Segmentation Based on a Specific Approach
At this stage, after the qualified suppliers were identified, there is a need for
sustainable supplier segmentation. The sustainable supply chain has three main
economic, social, and environmental dimensions. The interaction between these
three dimensions also creates new economic-social, economic-environmental, and
socio-environmental dimensions. According to Carter and Rogers (2008), the main
goal of sustainable supply chain management is to achieve the strategic and transparent integration of business processes to achieve social and environmental goals to
improve the long-term economic performance of the whole chain. They developed a
model based on four factors of risk management, transparency, strategy, and culture
for a sustainable supply chain (Fig. 7.2).
Suppliers who pay particular attention to all of these three dimensions consider
the demands and needs of the customer with their optimal performance, so that they
protect the environment, have concern for community development, and contribute
to the economic prosperity. In other words, the companies emphasize on the
cooperation with sustainable suppliers that focus on all three social, environmental,
and economic dimensions. Companies that implement sustainability dimensions
strategically have higher economic performance compared to the companies that
only follow the goals of one or two dimensions of the triple dimensions (Carter and
Rogers 2008). Based on this model, the suppliers can be segmented from the
sustainability perspective. It is clear that any supplier can have a desired performance
in one, two, or all three dimensions of sustainability. For example, if a supplier has a
desired (high) performance in both economic and social dimensions, it will be
considered in the economic-social (equitable) segment. Of course, there are suppliers
that are not included in any of the triple dimensions of sustainability in the evaluation
and segmentation processes and do not meet the minimum requirements for cooperation; however, these suppliers are eliminated at the earlier stage. At this stage, the
suppliers need to be evaluated separately and based on the desired criteria for each
sustainability dimension. The criterion for high or low performance of suppliers in
each dimension is their scores. In this respect, for the scores below the threshold, the
performance is considered low, and for scores above the threshold, the performance
is considered high. Table 7.2 lists the supplier characteristics of each segment.
7 Sustainable Supplier Segmentation: A Practical Procedure
127