Evaluating the supplier selection process to improve sustainable practices : a case study of Raute Corporation

Abstract

Supplier selection is highlighted as one of the key factors in attaining the organizational sustainability goals and developing sustainable supply chain networks. Due to its significance, more evidence is needed to advance the knowledge and provide practical insights. Thus, this thesis research aims to evaluate the supplier selection process and its influence on the improving sustainability practices of a famous Finnish company Raute corporation. For the purpose of this research, a case study method is selected, and data is collected from the different sources such as interviews, archival data, and other sources. As the case company has many suppliers both domestically and internationally, in this thesis we focus on the supplier selection process in the (LVL) laminated veneer lumber and cutting-edge industries that make wood-based plates and bars for the building sector.

The research findings highlight the diverse selection criteria used and influenced by various factors including product nature, business area, company values, objectives, and supplier importance. Defining supplier selection criteria precisely can enhance business operations and competitiveness. Raute prioritizes a demanding and comprehensive supplier selection process to guarantee that its operations are aligned with its core principles and strategic goals. This includes a thorough evaluation of potential suppliers, considering sustainability and responsible business practices beyond typical metrics. Supplier selection significantly influences environmental, social, and governance (ESG) practices, impacting Raute's overall sustainability and ethical position. Moreover, selecting suppliers committed to sustainability can reduce the environmental impact of the manufacturing process. Selecting environmentally responsible suppliers corresponding with sustainable production approaches, which prioritize reducing consumption of energy and applying waste management measures across the supply chain. This research reinforces the significance of supplier selection for enhancing the company’s environmental, social, and governance practices and provides valuable insights for policy and practice.