INVESTIGATION THOUGHT DECISION-MAKING TRIAL AND EVALUATION LABORATORY _DEMATEL_ IN GREEN SUPPLY CHAIN MANAGEMENT by iaemedu

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International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 –
                RESEARCH Volume 3, Issue 2, July-December (2012), © IAEME
6979(Print), ISSN 0976 – 6987(Online)AND DEVELOPMENT (IJIERD)


ISSN 0976 – 6979 (Print)
ISSN 0976 – 6987 (Online)
Volume 3, Issue 2, July-December (2012), pp. 58-73
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    INVESTIGATION THOUGHT DECISION-MAKING TRIAL AND
 EVALUATION LABORATORY (DEMATEL) IN GREEN SUPPLY CHAIN
      MANAGEMENT INCLUDE REDUCING AND RECYCLING
      PHARMACEUTICAL WASTE FOR A PHARMACEUTICAL
                 MANUFACTURER IN INDIA

                                Ajay Verma 1 and Dr. Anshul Gangele 2
   1
       [Research Scholar] Department of Mechanical Engineering, Suresh Gyan Vihar University,
                                           Jaipur (Raj.) 302025
                                      E-mail: vajay9@yahoo.co.in
                 2
                   Institutes of Technology & Management, Gwalior (M.P.) 474001
                                   E-mail: anshulgangele@gmail.com



ABSTRACT

     This study presented an integrated approach for selecting appropriate suppliers in addressing
Pharmaceutical Green Supply Chain Management (PGSCM) of environment change via Multiple
Criteria Decision Making Method (MCDM). In this study, thirteen criteria of Pharmaceutical Green
Supply Chain Management with three dimensions were identified from literature review and
interview with three experts in a Pharmaceutical manufacturer. By considering the interrelationships
among criteria, the Decision-Making Trial and Evaluation Laboratory (DEMATEL) were applied to
deal with the importance and causal relationships among the evaluation criteria of supplier selection.
As indicated by the results, the four most important criteria are internal environmental management,
involvement in initiatives for negative economic, training related reducing waste management, and
green purchasing. The results also found that the top four criteria not only have potential
significance in the selection of green suppliers with waste management competencies, but also
affect the other twelve criteria, separately.


Keywords: Pharmaceutical Green Supply Chain Management, supplier selection, DEMATEL


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1. INTRODUCTION

     With increase in environmental concerns during the past decade, a consensus is growing that
environmental pollution issues accompanying industrial development should be addressed
together with supply chain management, thereby contributing to green supply chain management
(GSCM). [37] Since the Waste Electrical and Electronics Equipment (WEEE), Restriction of
Hazardous Substances (RoHS) and Eco-design for Energy using Products (EuP) directives were
passed by the European Union (EU), GSCM has been adopted as a proactive strategy by leading
Indian Pharmaceutical industry companies. Thus, it is inferred that GSCM practice can be
viewed as the primary strategy capable of complying with the requirements of legislations and
maintaining the competitive advantage. Therefore, GSCM is an operational initiative on the part
of many organizations, including those in Asia and South Asian region which are adopting to
address such environmental issues. [32] India is one of the most industrialized countries in the
Asia-Pacific region. Most Pharmaceutical manufacturers in India are involved in products
manufacturing. These companies play important roles in global markets as their products share a
substantial portion in market. Once, India was the largest producer of pharmaceutical products
the world. Pharmaceutical industries are subject to customer requests for green products and
green manufacturing that comply with emerging environmental directives. These directives,
especially the RoHS, directly impact the Pharmaceutical industries in India. These directives also
have a far-reaching influence on supply chain partners for multinational enterprises. [18]
Although, to the best of our knowledge, various investigations have proposed different
approaches to implement GSCM [22, 37, 4, 45, 31, 10, 48], there have been far less research on
identifying the consistency and priority approaches to GSCM investigation with the systematic
analysis, in Pharmaceutical industry. This is because the complexity of GSCM practices,
customer and cost pressures and regulation uncertainty, Investigating GSCM is considered as a
thankless task that increases overall product cost. For example, the RoHS directive lacks a
standardized test procedure and an updated exemption annex of chemicals. These shortcomings
result in significant problems when Investigating GSCM. Furthermore, increased regulations -
RoHS-EU, RoHS-Korea, RoHS-China and RoHS-India result in difficulties executing GSCM
practices. Hence, enterprises cannot determine whether their executive strategies conform to
regulations or ensure that current management approaches are working and have a low risk.
Consequently, enterprise embraces the appropriate approaches for Investigating GSCM practice
and it is significant to mitigate potential risks from green supply chain. The central purpose of
this study is to establish the consistency and priority approaches for Investigating GSCM in
response to environmental regulations of RoHS. The Decision-Making Trial and Evaluation
Laboratory (DEMATEL), which is applied to conduct the relative importance of different
approaches, is extremely crucial, since the results can be used by managers investigating and
adopting their own GSCM practices.
GSCM is generally understood to involve screening suppliers based on their environmental
performance and doing business only with those that meet certain environmental regulations or
standards. [31] Empirical investigations with identified supplier management as the most
important dimension for implementing GSCM or sustainable supply chain management (SSCM).
[15, 34]
An increasing number of authors have addressed supplier selection issues in green supply chain
viewed from environmental perspectives. [1, 8, 12, 14, 16, 17, 23, 28, 31, 41, 44, 46,] One of the

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biggest challenges faced by our planet is climate change, which is now recognized as the most serious
environmental threat for sustainable development. [19]
Nevertheless, to the best of our knowledge, green supplier selection specifically considering in
Pharmaceutical industry has never been found in previous literature. In addition, most of early literature
may be limited to exploring the broad environmental criteria of either quantitative or qualitative property
with regard to environmental cost, production process, product, and management system. Some typical
supplier selection models are illustrated below.
By incorporating green competence, environmental efficiency, green image, and life cycle cost into the
supplier selection, the framework proposed in designed green vendor rating systems for the assessment of
a supplier’s environmental performance. [36] As later pointed out in environmental consideration of
supplier selection is a key competitive issue for large and medium-sized enterprises, and thus it should be
taken into account to maintain the long-term relationships with these suppliers. Similarly, considering the
corresponding evaluation factors of environmental performances proposed an environmentally conscious
purchasing decision tool to assist managers in understanding the trade-offs between environmental
dimensions using analytic hierarchy process (AHP). [12, 46] Presently pointed out companies are
embracing the concept of greening of suppliers in the South East Asian region, aiming to provide an
insight of the extent of greening that has been implemented and the underlying reasons for Asia
companies to increasingly adopt. [31] As further pointed out in environmental principles applicable to
green supplier evaluation has been proposed by using the AHP and fuzzy logic. [44] Their study
considers the complete environmental impact of a product during its entire life cycle. By incorporating the
issue of hazardous substances into green supplier selection, utilized analytic network process (ANP)
method to construct an evaluation framework of supplier selection in a India Pharmaceutical company,
which included five main criteria, namely procurement management, R&D management, process
management, incoming quality control, and management system.[14] More currently, proposed an
integrated model that adopts environmental and non-environmental criteria for selecting green supplier in
high-tech industry, including the criteria of quality, technology capability, pollution control,
environmental management, green product, and green competencies. [23] Similarly, integrated a number
of sustainability factors into the model of supplier selection that include economic, environmental, and
social issues, particularly in the field of social dimension in which employment practices, health and
safety, local communities influence, contractual stakeholders influence, and other stakeholders influence
were included. [1] However, those previous studies may be still limited to either the broad environmental
criteria or integrating criteria without considering waste management issue on the operation of the
corresponding green supplier selection.
In this study, the interrelationship among criteria of green supplier selection and evaluation has to be
considered. Decision Making Trial and Evaluation Laboratory (DEMATEL) approach has been
considered as one of the best tools for dealing with the importance and causal relationships among the
evaluation criteria. [5, 11, 26, 25, 39, 44,] This is because that DEMATEL method can confirm
interdependence among variables and aid in the development of a directed graph to reflect the
interrelationships between variables. [24] In view of the significance of incorporating the waste
management into supplier selection as well as the limitation of previous studies, we utilized the
DEMATEL methodology to construct a waste management model for green supplier selection to be used
in Pharmaceutical industry. The main objective of this study is to recognize the criteria of supplier
selection and evaluation with respect to waste management competency in GSCM and to construct the
cognition map of evaluation criteria in accordance with the real situation where criteria are
interdependent.
The remainder of this paper is organized as follows. Section 2 discusses selection criteria for green
suppliers in terms of waste management competency. Section 3 discusses the DEMATEL approach.
Section 4 illustrates a case of appropriate supplier selection. Concluding remarks, along with the
conclusions and future research are given in Section 5.

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2. CRITERIA FOR PHARMACEUTICAL GREEN SUPPLY CHAIN MANAGEMENT

    Based on integrating the categories and criteria identified from the literature, an environmental
framework was designed for incorporating environmental criteria regarding the competency of
Pharmaceutical Green Supply Chain Management into supplier selection in GSCM. Thirteen criteria were
determined and categorized into three main clusters as follows:

2.1 PGSCM practices

 2.1.1 Internal environmental management
     • Commitment of PGSCM from senior managers
     • Support for PGSCM from mid-level managers
     • Cross-functional cooperation for environmental improvements
     • Eco-labeling of Products
     • Support of regulations environment
2.1.2 Green purchasing
     • Cooperation with suppliers for environmental objectives
     • Environmental audit for suppliers’ internal management
     • Suppliers’ ISO14000 certification
     • Second-tier supplier environmentally friendly practice evaluation
2.1.3 Eco-design
     • Design of products for reduced consumption of material/energy
     • Design of products for reuse, recycle, and recovery of material
     • Design of products to avoid or reduce use of hazardous substances their manufacturing process
     • Design of product for support regulation
     • Design the products that least capacity for decrease taking time, the area stores, and the energy
         between the transportation
     • Design the products to be easy set up for the users in the most energy saving way
     • Design usability of part particularly for Extend using products, repair easy and increase efficiency
2.1.4 Cooperation with customers
     • Cooperation with customer for eco-design
     • Cooperation with customers for cleaner production
     • Cooperation with customers for green packaging
2.1.5 Training related reducing waste management
     • Total quality environmental management
     • Environmental compliance and auditing programs
     • ISO 14001 certification
     • Environmental Management Systems exist
2.1.6 Reuse and remanufacturing management
     • Reduction of air emission
     • Reduction of waste water
     • Reduction of solid wastes
     • Reduction of electricity consumption
     • Reuse of waste water
     • Remanufacturing of waste material




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2.2 PGSCM performance
2.2.1 Environmental
    • Reduction of physical
    • Decrease of frequency for environmental accidents
    • Decrease of consumption for hazardous/harmful/toxic materials
    • Improve an enterprise’s environmental situation
2.2.2 Involvement in initiatives for Positive economic
    • Decrease of cost for materials purchasing
    • Decrease of cost for energy consumption
    • Decrease of fee for waste treatment
    • Decrease of fee for waste discharge
    • Decrease of fine for environmental accidents
2.2.3 Involvement in initiatives for Negative economic
    • Increase of investment
    • Increase of operational cost
    • Increase of training cost
    • Increase of costs for purchasing environmentally friendly materials
2.2.4 Supplier collaboration
    • ISO 14001 certification
    • Cooperation with suppliers for environmental objectives
    • Environmental audit for suppliers’ internal management

2.3 PGSCM pressure
2.3.1 Market and inventory
    • Export
2.3.2 Regulatory
    • Central governmental environmental regulations
    • Regional environmental regulations
    • Regulations: WEEE
    • Regulations: RoHS
    • Regulations: EuP
2.3.3 Competition
    • Competitors’ green strategies
    • Industrial professional group activities

3. DEMATEL

     DEMATEL is a comprehensive tool for building and analyzing a structural model involving causal
relationships between complex factors. [44] Developed by the Science and Human Affairs Program of the
Battelle Memorial Institute of Geneva between 1972 and 1976, DEMATEL has been used to research and
solve a group of complicated and intertwined problems. DEMATEL was developed in the belief that
pioneering and appropriate use of scientific research methods could improve understanding of the specific
problematic cluster of intertwined problems, thereby contributing to the identification of workable
solutions by a hierarchical structure. The methodology, according to the concrete characteristics of
objective affairs, can confirm the interdependence among the variables/attributes and restrict the
relationship that reflects the characteristic with an essential system and development trend. [6, 13,] The
product of the DEMATEL process is a visual representation (i.e., an individual map of the mind) that the
respondent uses to organize his or her own actions.

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• DEMATEL (Decision Making Trial and Evaluation Laboratory)
The DEMATEL method can be summarized in the following steps:

Step 1: Find the average matrix. Suppose we have H experts in this study and n factors to consider.
Each stakeholder is asked to indicate the degree to which he or she believes a factor i affects factor j.
These pair wise comparisons between any two factors are denoted by aij and are given an integer score
ranging from 0, 1, 2, 3, and 4, representing ‘No influence (0),’ ‘Low influence (1),’ ‘Medium influence
(2),’ ‘High influence (3),’ and ‘Very high influence (4),’ respectively. The scores by each expert will give
us a n x n non-negative answer matrix X k =[ xij ], with 1 ≤ k ≤ H . Thus X 1 , X 2 ,…, X H are the
                                                   k


answer matrices for each of the H experts, and each element of X k is an integer denoted by xij . The
                                                                                             k


diagonal elements of each answer matrix X k are all set to zero. We can then compute the n x n average
matrix A for all expert opinions by averaging the H experts’ scores as follows:
                    1 H k
                 aij =  ∑ xij                                                           (1)
                    H k =1
The average matrix A=[ aij ] is also called the initial direct relation matrix. A shows the initial direct
effects that a factor exerts on and receives from other factors. Furthermore, we can map out the causal
effect between each pair of factors in a system by drawing an influence map. Figure 1 below is an
example of such an influence map. Here, each letter represents a factor in the system. An arrow from c to
d shows the effect that c has on d, and the strength of its effect is 4. DEMATEL can convert the structural
relations among the factors of a system into an intelligible map of the system.



                                                       c

                                       4                          3



                                                   1
                               d                                          g


                                       3
                                                       e
                                                                      4




                                                       f



                                   Fig. 1 Example of an influence map




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Step 2: Calculate the normalized initial direct-relation matrix. The normalized initial direct-
relation matrix D is obtained by normalizing the average matrix A in the following way:

                     n              n  
Let s = max max ∑ aij , max ∑ aij 
            1≤i ≤ n j =1 1≤ j ≤ n i =1                                                (2)
                                       

                   A
       Then D =                                                                         (3)
                   s

Since the sum of each row j of matrix A represents the total direct effects that factor i gives to the
                            n
other factors, max ∑ aij represents the total direct effects of the factor with the most direct
                  1≤i ≤ n
                            j =1

effects on others. Likewise, since the sum of each column i of matrix A represents the total direct
                                               n
effects received by factor i, max ∑ aij represents the total direct effects received of the factor
                                   1≤ j ≤ n
                                              i =1
that receives the most direct effects from others. The positive scalar s takes the lesser of the two
as the upper bound, and the matrix D is obtained by dividing each element of A by the scalar s.
Note that each element d ij of matrix D is between zero and less than 1.

Step 3: Compute the total relation matrix. A continuous decrease of the indirect effects of
problems along the powers of matrix D, e.g. D 2 , D3 ,..., D∞ , guarantees convergent solutions to
the matrix inversion similar to an absorbing Markov chain matrix. Note that lim D m = [0]n×n
                                                                                 m →∞

and
lim( I + D + D 2 + D3 + ... + D m ) = ( I − D) −1 , where 0 is the n x n null matrix and I is the n x n
m →∞

identity matrix. The total relation matrix T is an n x n matrix and is defined as follow:
               T = [tij] i, j = 1, 2,…, n

Where

T= D + D2 + … + Dm
= D + D2 + ... + Dm = D( I + D + D2 + ... + Dm-1 )
= D[( I + D + D 2 + ... + D m-1 ) (1- D )](1- D )-1
= D (I-D)-1, as m → ∞              (4)

We also define r and c as n x 1 vectors representing the sum of rows and sum of columns of the
total relation matrix T as follows:




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                                         n
                        r = []in
                             r     ×1    ∑
                                      =  tij                                         (5)
                                        j =1   n×1




                                         n ′
                        c = [c j ]1×n =  ∑ tij 
                                  ′                                                    (6)
                                         i =1  1×n

where superscript denotes transpose.
Let ri be the sum of i-th row in matrix T. Then ri shows the total effects, both direct and indirect,
given by factor i to the other factors. Let cj denotes the sum of j-th column in matrix T. Then cj
shows the total effects, both direct and indirect, received by factor j from the other factors. Thus
when j = i, the sum ( rc+ ) gives us an index representing the total effects both given and
                          ii

received by factor i. In other words, ( rc+ ) shows the degree of importance (total sum of effects
                                         ii

given and received) that factor i plays in the system. In addition, the difference ( rc− ) shows the
                                                                                      ii

net effect that factor i contributes to the system. When ( rc− ) is positive, factor i is a net causer,
                                                            ii

and when ( rc− ) is negative, factor i is a net receiver (Tzeng et al. 2007; Tamura et al., 2002).
            ii


Step 4: Set a threshold value and obtain the impact-relations-map. In order to explain the
structural relation among the factors while keeping the complexity of the system to a manageable
level, it is necessary to set a threshold value p to filter out some negligible effects in matrix T.
While each factor of matrix T provides information on how one factor affects another, the
decision-maker must set a threshold value in order to reduce the complexity of the structural
relation model implicit in matrix T. Only some factors, which’s effect in matrix T is greater than
the threshold value, should be chosen and shown in an impact-relations-map (IRM). [42]
In this paper, the threshold value has been decided by experts. As long as the threshold value has
been decided, the final result can be shown in an IRM.

4. AN ILLUSTRATIVE FOR A PHARMACEUTICAL MANUFACTURER

       The case company is a leading provider of innovative products for both global and
domestic markets. Its primary objective for all product lines is to be number one in India and
within the top three in the global market. The case company’s distinguished reputation has its
beginnings in the India Pharmaceutical industry, where we have ranked number one for the past
20 years. Furthermore, it is also the world’s largest Pharmaceutical manufacturer, holding a 55%
global market share. GSCM is a significant issue for the Indians Pharmaceutical industry because
recent studies have shown that most of the world’s manufacturing will be relocated to Asia
within the next two decades. In adherence to the awareness of climate change in the green supply
chain, the consideration of supplier selection has been changed from broad environmental issues
into the specific issue of reducing and recycling pharmaceutical waste. India is one of the most
industrialized countries in the Asia-Pacific region, with numerous Pharmaceutical manufacturers.
The case company in this study is interested in incorporating reducing and recycling
pharmaceutical waste into supplier evaluation and selection for GSCM practice due to it suffer

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pressure from buyers and has become as the regard to reducing and recycling pharmaceutical
waste in green supply chain. In relation to the increased environmental regulations within climate
change, the study company wanted to implement a systematic method of selecting appropriate
suppliers based on competency in reducing and recycling pharmaceutical waste. Through
detailed analysis of the pertinent literature and in-depth interviews with three senior supply chain
and environmental management representatives from the company, thirteen criteria for waste
management were recognized as basis for the formulation of the selection framework for
selecting green suppliers as shown in Table 1.

  Table 1. Pharmaceutical Green Supply Chain Management criteria for green supplier
                                      selection

          Dimensions                                   Criteria
                            Internal environmental management (C1)

            PGSCM           Green purchasing (C2)
            practices       Eco-design (C3)
                            Cooperation with customers (C4)
                            Training related reducing waste management (C5)
                            Reuse and Remanufacturing management (C6)
                            Environmental (C7)
            PGSCM
          performance       Involvement in initiatives for Positive economic (C8)
                            Involvement in initiatives for Negative economic (C9)
                            Supplier collaboration (C10)
            PGSCM           Market (C11)
            pressure
                            Regulatory (C12)
                            Competition (C13)

Based on the previously identified pharmaceutical green supply chain management evaluation
criteria for supplier selection, we utilized the DEMATEL to construct the influence map in
accordance with the real situation in which criteria should be interdependent. Three senior
managers of the company were invited to fill out expert questionnaires using a five-point scale
(i.e., o= no influence, 1= low influence, 2= moderate influence, 3=high influence, 4= extreme
influence), indicating to what extent each criterion was practiced in their organization. Using the
13 x 13 pair wise comparisons, the averages of their opinions were calculated in accordance with
Eq. (1). The normalized initial direct-relation matrix was then generated by using Eqs. (2) and
(3). The total relation matrix was computed by using Eq. (4) through (6) as shown in Table 2.
The degree of influence on the criteria is given in Table 3. In order to make this framework
distinct, a threshold value of 0.26, based on the maximum value of the diagonal in the total
influence matrix, was adopted. The influence map of these 13 mutually interdependent criteria is
depicted in Figure 2.



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                                                  Table 2. Total influence matrix
         C1      C2             C3           C4       C5      C6      C7      C8       C9         C10         C11         C12         C13

   C1    0.260   0.341          0.341        0.308    0.287   0.329   0.313   0.300    0.292      0.341       0.278       0.297       0.303
   C2    0.326   0.241          0.309        0.277    0.258   0.282   0.282   0.270    0.263      0.301       0.256       0.267       0.272
   C3    0.186   0.184          0.141        0.167    0.148   0.162   0.178   0.162    0.158      0.201       0.159       0.169       0.172
   C4    0.207   0.206          0.198        0.144    0.167   0.191   0.191   0.183    0.178      0.190       0.179       0.173       0.184
   C5    0.355   0.352          0.353        0.335    0.237   0.333   0.348   0.326    0.317      0.361       0.320       0.323       0.337
   C6    0.280   0.278          0.271        0.256    0.231   0.201   0.260   0.250    0.235      0.270       0.245       0.239       0.244
   C7    0.283   0.281          0.281        0.267    0.256   0.297   0.211   0.259    0.253      0.289       0.255       0.257       0.254
   C8    0.271   0.269          0.261        0.247    0.231   0.260   0.259   0.189    0.242      0.277       0.244       0.238       0.251
   C9    0.362   0.359          0.351        0.333    0.311   0.339   0.338   0.324    0.240      0.351       0.310       0.321       0.327
   C10   0.286   0.276          0.285        0.270    0.244   0.275   0.266   0.247    0.241      0.216       0.250       0.245       0.257
   C11   0.278   0.276          0.285        0.262    0.237   0.275   0.275   0.247    0.249      0.276       0.191       0.261       0.249
   C12   0.274   0.272          0.272        0.258    0.233   0.271   0.263   0.252    0.245      0.264       0.247       0.190       0.245
   C13   0.266   0.264          0.256        0.243    0.234   0.247   0.255   0.244    0.230      0.264       0.240       0.234       0.187


                                        Table 3. Degree of influence on criteria
   Criteria                                                                              ri              ci          ri + ci        ri - ci
   Internal environmental management (C1)                                             3.990           3.635         7.625         0.355
   Green purchasing (C2)                                                              3.606           3.597         7.203         0.009
   Eco-design (C3)                                                                    2.188           3.606         5.794         -1.418
   Cooperation with customers (C4)                                                    2.390           3.369         5.759         -0.979
   Training related reducing waste management (C5)                                    4.297           3.074         7.371         1.223
   Reuse and Remanufacturing management (C6)                                          3.261           3.446         6.707         -0.185
   Environmental (C7)                                                                 3.424           3.438         6.862         -0.014
   Involvement in initiatives for Positive economic (C8)                              3.240           3.253         6.493         -0.013
   Involvement in initiatives for Negative economic (C9)                              4.268           3.144         7.412         1.124
   Supplier collaboration (C10)                                                       3.358           3.601         9.959         -0.243
   Market (C11)                                                                       3.362           3.175         6.537         0.187
   Regulatory (C12)                                                                   3.295           3.216         6.511         0.079
   Competition (C13)                                                                  3.167           3.291         6.458         -0.124


                         Fig. 2. Influence map of total relationship among criteria
                      1.5
                                                                                            C5
                                                                                                 C9
                         1


                      0.5

                                                                     C11                               C1
                                                                   C12
                         0                                        C8      C7            C2
                              5.5                 6             C13
                                                               6.5      C6    7                  7.5                  8
                                                                             C10
                      -0.5


                         -1             C4

                                             C3
                      -1.5




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5. RESULT AND DISCUSSION

      Considering the significance of pharmaceutical green supply chain management among the
criteria for supplier selection in Table 3, the importance can be prioritized as:
C1>C9>C5>C2>C10>C7>C6>C11>C12>C8> C13>C3>C4 in terms of degree of importance
(ri + ci). Incorporating the analysis of DEMATEL evidence, Internal environmental management
(C1), Involvement in initiatives for Negative economic (C9), and Training related reducing waste
management (C5) are the top three most important criteria with the values of 7.625, 7.412, and
7.371, respectively. Cooperation with customers (C4) and Eco-design (C3) are the least
important criteria with the values of 5.759 and 5.794, respectively. In contrast to the importance,
training related reducing waste management (C5), Involvement in initiatives for Negative
economic (C9), Internal environmental management (C1), Market and inventory (C11),
Regulatory (C12), Green purchasing (C2) are net causer, whereas Eco-design (C3), Cooperation
with customers (C4), supplier collaboration (C10), Competition (C13), Environmental (C7), and
Involvement in initiatives for Positive economic (C8) are net receivers in accordance with the
value of difference (ri - ci ).
As previously noted, Figure 2 shows that internal environmental management (C1), involvement
in initiatives for negative economic (C9), training related reducing waste management (C5), and
green purchasing (C2) are not only the net causes but also the top four most important criteria for
the selection of green suppliers with the competencies on waste management.
Corporate governance is critically important in determining how companies respond to climate
change. Companies that integrate climate change into their board and executive structures, as
well as their public reporting mechanisms, are far more likely to maintain the long-term
commitment and comprehensive approaches needed to address climate change risks and
opportunities effectively across their entire business structure.
With regard the criterion of pharmaceutical governance, pointed out that an increasing number of
suppliers have established governance within top management to ensure the completion of waste
reduction activities are properly set in place. Sixty percent of suppliers from the supply chain
report have elected a board committee member or executive to be responsible for waste
management and climate change issues demonstrated that top-management support is the most
important item for the successful implementation of GSCM practice in the Indian Pharmaceutical
industries. [15] This implies that enterprises have realized that senior manager support is
necessary and that this support plays a critical role in the successful adoption and implementation
of GSCM. By incorporating the issue of waste management into GSCM, waste governance must
be supported by top management because it is the foundation for further promoting the waste
management. Someone within the company must take responsibility for the whole organization
in directing the effort and recognizing the importance of waste management issues. Furthermore,
suppliers should have a person/team responsible for the identification of low- waste solutions
that can help buyers, accordance with waste regulations or standards. Waste governance has the
potential to significantly influence green supplier selection, as well as highlight the importance
of implementing and planning waste management practices to suppliers.
Based on the results of this study, a management system of waste information has been
determined as the second most important criterion. Effective waste management involves the
collection and incorporation of relevant information on each department within a company,
particularly concerning waste inventory and accounting. Based on the survey results of waste

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6979(Print), ISSN 0976 – 6987(Online) Volume 3, Issue 2, July-December (2012), © IAEME
management, argued that the majority of large companies have established the basic
management systems and processes necessary to effectively manage their waste and related
business risks. In order to disclose and manage waste data, suppliers need to establish a
management system as a platform to collect waste data from their organizational, which would
be first step towards managing waste. Suppliers will face great pressure and difficulty in
collecting comprehensive waste data if they do not have a waste management system in place.
Training related to waste management is the third most crucial criterion in evaluating green
suppliers. As pointed out, a wide range of training can enhance environmental management
capabilities of suppliers. Moreover, enterprises provide education on quality, environmental
performance, and other aspects simultaneously. [27] As a result, this can greatly improve
environmental awareness of the staff. [46] Companies initially encounter challenges when
implementing waste management initiatives related to GSCM practices. These practices are
generally very complex, and most employees are not aware of waste management associated
with GHG inventory, accounting, and regulations. In view of the importance of consciousness of
waste management for employees, education and training in waste issues need to be launched to
promote environmental awareness. As an example, regulations related to the emerging standards,
are used to collect and report waste data from either a product or organizational perspective. In
educational training, the necessary understanding of the principles of waste inventory and
accounting covers a host of topics ranging from waste legislation, implementing waste inventory
and accounting, waste footprint calculation, to waste data verification. As noted above, it is
evident that training related to corporate waste management can contribute to enhance waste
emission awareness of employees and promote the waste management initiatives.
The fourth most important criterion for selecting and evaluating green supplier is waste policy.
As indicated the order to deliver and raise the awareness of environmental issues among
suppliers, customers, and staff, the organization needs to draw up an environmental policy for
GSCM concerning its customers/suppliers. [45] The members have integrated waste policies into
their procurement departments, and a large majority of these members (90%) have an emissions
reduction plan in place. Thus, the company can facilitate waste management practices by
establishing a waste policy as a manifestation of its position regarding waste emissions
disclosure, waste reduction target certification, among others.

6. CONCLUSIONS

    The GSCM based conceptual framework and operational model for the incorporation of
Pharmaceutical Green Supply Chain Management into supplier selection have been presented.
After identifying the related criteria of Pharmaceutical Green Supply Chain Management
activities for the proposed framework, DEMATEL was applied to a Pharmaceutical company.
By using DEMATEL, the structure and interrelationships have not only been recognized, the key
criteria that influence the supplier selection with regard to Pharmaceutical Green Supply Chain
Management competencies have also been determined. Results indicate that the four most
important criteria are internal environmental management, involvement in initiatives for negative
economic, training related reducing waste management, and green purchasing. The results also
show that the top four criteria not only have potential significance in selecting green suppliers
with the competencies of Pharmaceutical Green Supply Chain Management, but also affect the
other twelve evaluation criteria.

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Compared with the previous investigations, the proposed method may have following
contributions. First, a new model for selecting suppliers with emphasis on Pharmaceutical Green
Supply Chain Management issues has been developed. Such a framework has never been found
in the previous literature. Second, the DEMATEL method was applied in selecting supplier in
PGSCM and it is rarely found from the previous studies. DEMATEL can deal with the
complicated and intertwined problems and determine the causal relationships among the
evaluation criteria. In this paper, the DEMATEL method is an appropriative method to delineate
the structure of a totally interdependent problem and find the foci for solving the problem. By
identifying the structure and interrelationships, the key criteria that influence green supplier
selection have been recognized. These results can be helpful for a decision-maker to rank
supplier with respect to waste management competencies.

ACKNOWLEDGMENT

    The authors would like to put on record appreciation to the anonymous referees for their
valuable suggestions, which have enhanced the quality of the paper over its earlier version.

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