Flexible procurement systems is key to supply chain sustainability

Abstract

Background: In this dynamic business environment, manufacturers are focusing primarily on delivery performance and competitive pricing to win orders. It is essential that manufacturers adopt flexible procurement systems (FPSs) in such an uncertain environment for business sustainability.

Objectives: The purpose of the study is to identify the elements of FPSs and model the interrelationships between elements of FPSs and, finally, to understand how FPSs are linked with supply chain sustainability.

Method: Besides providing a brief conceptual review of FPSs, the study largely illustrates the use of an innovative multi-criteria decision-making approach called total interpretive structural modelling (TISM).

Results: The total interpretive structural modelling–based model evaluates the causality and illustrates elements with interpretation of relations and suggests that bottom-level elements are vital for sustainability in FPSs and avert risks. Secondly, strategic sourcing is positively influencing supplier integration. Thirdly, supplier integration positively influences supplier responsiveness. Fourthly, skills of flexible procurement workforce positively influence supplier integration. Fifthly, it is found that supplier integration positively influences flexible transportation. The sixth finding suggests that supplier integration positively influences eco-friendly packaging. The seventh finding highlights that supplier integration positively influences ISO 14001 certifications. The eighth finding explains that supplier responsiveness positively influences customer satisfaction. It is also observed that flexible transport reduces operational cost and environmental costs. The second last finding explains eco-friendly packaging and reduction in environmental cost by careful selection of packing material and chemicals. Lastly, it is found that ISO 14001/environmental certifications reduce environmental costs by greening suppliers and pressurises them to follow environmental norms. This helps in reducing wastage and developing alternate raw materials, which are eco-friendly in nature. Environmental certifications of suppliers help in improving the image of the buyer firm in the business environment and attract more customers.

Conclusion: It is found that FPSs have a positive relationship with supply chain sustainability. In the end, the author highlights implications for supply chain practitioners and researchers.

Keywords: Flexible Procurement; Sustainability; Supply chain network; TISM