A two-dimensional model for supplier sustainability rating : integrating analytic hierarchy process (AHP) and weighted sum method (WSM) for environmental sustainability performance and compliance evaluation
Gunaratne, Kalani (2025)
Pro gradu -tutkielma
2025
School of Business and Management, Kauppatieteet
Kaikki oikeudet pidätetään.
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2025061668711
https://urn.fi/URN:NBN:fi-fe2025061668711
Tiivistelmä
Monitoring and evaluating a supplier’s sustainability position is a crucial proactive measure for maintaining a sustainable value chain in the long term and avoiding sustainability-related risks. Accordingly, this study designs an Excel-based comprehensive supplier rating system to monitor suppliers' environmental sustainability. The rating system consists of two dimensions: Environmental Sustainability Performance Rating and Compliance Rating. The performance rating indicates the supplier’s current performance on environmental sustainability criteria, while the compliance rating reflects whether the supplier has the necessary foundation to maintain this performance.
The criteria used to quantify each dimension were defined with input from experts at the case company to ensure alignment with both internal and external requirements. The Analytic Hierarchy Process (AHP), using weighted expert opinions, was employed to calculate the weights of the criteria. Scorecards were designed in accordance with the company’s standards to ensure that the ratings reflect each supplier’s individual performance rather than their relative performance. Ratings are calculated by summing the weighted scores of all criteria within each dimension.
The model includes a dynamic weighting mechanism, where criteria weights automatically adjust based on the relevance set by the user for different material class. This feature allows the model to be applied across a complete supplier base, even when suppliers operate in different industries. As part of the compliance rating, the model includes a document verification criterion; scoring how many verification-documents the supplier has submitted and a data quality criterion that identifies outliers among submitted values using the Interquartile Range (IQR) method. The model includes a Power Query, connected to SharePoint folders to gather data for the model, enabling automated updates and facilitating company-wide integration. As output, the model generates a consolidated table showing each supplier’s environmental sustainability performance and compliance ratings, along with an interactive dashboard for visual support.
The criteria used to quantify each dimension were defined with input from experts at the case company to ensure alignment with both internal and external requirements. The Analytic Hierarchy Process (AHP), using weighted expert opinions, was employed to calculate the weights of the criteria. Scorecards were designed in accordance with the company’s standards to ensure that the ratings reflect each supplier’s individual performance rather than their relative performance. Ratings are calculated by summing the weighted scores of all criteria within each dimension.
The model includes a dynamic weighting mechanism, where criteria weights automatically adjust based on the relevance set by the user for different material class. This feature allows the model to be applied across a complete supplier base, even when suppliers operate in different industries. As part of the compliance rating, the model includes a document verification criterion; scoring how many verification-documents the supplier has submitted and a data quality criterion that identifies outliers among submitted values using the Interquartile Range (IQR) method. The model includes a Power Query, connected to SharePoint folders to gather data for the model, enabling automated updates and facilitating company-wide integration. As output, the model generates a consolidated table showing each supplier’s environmental sustainability performance and compliance ratings, along with an interactive dashboard for visual support.