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Assessment of green supply chain risk based on More Like This

circular economy Knowledge Sharing for Supply Chain

Management Based on Fuzzy Ontology on
Publisher: IEEE Cite This  PDF the Semantic Web
2008 International Symposiums on
Information Processing
Zhen-kun Yang ; Jian Li All Authors
Published: 2008

 
Research on the Innovation of Supply Chain
10
Paper
627
Full Alerts Management Based on the Enterprise's
Citations Text Views Strategic Alliance
Manage Content Alerts 2006 IEEE International Conference on
Service Operations and Logistics, and
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Published: 2006

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Abstract Abstract:Circular economy is the main direction of the development of world
economy, and now it is the economy developing pattern of our country. This
Document paper describes the operatio... View more
Sections
 Metadata
I. INTRODUCTION
Abstract:
II. METHODOLOGY Circular economy is the main direction of the development of world economy,
and now it is the economy developing pattern of our country. This paper
III. OPERATION describes the operation of green supply chain, and re-assesses the risk system
MODE
of green supply chain, and then use Fuzzy-AHP comprehensive evaluation
IV. RISK model to make an assessment for the Green Supply Chain Risk to provide a
ASSESSMENT reliable basis and assurance for the Supply chain selection and risk control of
OF GREEN enterprise.
SUPPLY
CHAIN
Published in: 2010 IEEE 17Th International Conference on Industrial
MANAGEMENT
Engineering and Engineering Management
V. CONCLUSION

Date of Conference: 29-31 October INSPEC Accession Number:

PDF
2010 11677120
Authors Help

Date Added to IEEE Xplore: 29 DOI: 10.1109/ICIEEM.2010.5645996

Figures November 2010
Publisher: IEEE

References  ISBN Information:

Conference Location: Xiamen, China

Citations

Keywords
SECTION I.
Metrics
INTRODUCTION
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More Like This
 The process of industrialization created the amazing human
social wealth and a high degree of modern material; However, Contents
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the subsequent is the world facing the severe form of the increase
PDF 
of population, shortage of resources, environmental pollution
and ecological evolution [1]. To this end, the management of the

green supply chain management is followed by the community's
attention. Supply chain to participate in the main, cross-regional,
multi-link feature, the supply chain is vulnerable to the external
environment and internal entities adverse factors to form the
supply chain risk because of its feathers of the participation in
the main, cross-regional and multi-link. In recent years, most
scholars focus on the research, production and operation of green
supply chain model, corporate relations and performance
evaluation, only a small amount of research on green supply
chain management and related issues discussed. This paper will
apply model to assess the risk to green supply chain risk for and
provide a reliable basis for the company's green supply chain
choices and risk control and assurance.

SECTION II.
METHODOLOGY
Supply chain risk management is to identify potential risks and
take appropriate action to avoid or eliminate the risk. It can be
defined as aiming to reduce the vulnerability of the whole supply
chain through the collaboration between members of the supply
chain to identify and manage internal and external risks of the
supply chain”[2].

Supply chain risks often cause companies not a continuous

operation, resulting in decreased market share. If the supply
chain risk causes a great loss, it may endanger the survival and
development of enterprises. Therefore, it is very important for
the company to prevent risk. If an effective supply chain risk
management can be carried out, then the enterprise will be able
to make a rapid response to the change of the dynamic business
environment. It can not only prevent risks, but also improve the
ability to seize market opportunities, enhance the overall
competitiveness [3].

Supply chain risk management theory and methods are divided

and developed from general Supply chain risk management
theory [4]. As shown in Figure 1, what the supply chain risk
management system should be included was summed up
according to supply chain management process elements,
combined with the actual situation of supply chain management.

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 
Fig 1: Management of Supply chain risk process Contents
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SECTION III.
OPERATION MODE
Cycle logistics system is composed of forward and reverses
interconnected green supply chain interconnected. The
development of the forward green supply chain as well as the
reverse supply chain green Composed by the waste materials
recovery, recycling of renewable resources, Forming a closed-
loop supply chain management model from the Green Design-
Green Purchasing of raw materials-products green production-
green marketing and green recycling, in order to achieve optimal
in the entire supply chain in the harmonization of environment-
friendly management system environment through the
production chain between enterprises and between enterprises
within the sector to work closely[5]. The operation mode of green
supply chain Based on the theory of circular economy was shown
in Figure 2.


Fig 2: The operation mode of green supply chain Based
on circular economy

It is shown in Figure 2, Green supply chain operation can be

summarized as: Manufacturers of green manufacturing,
production of green products flow through the process, to reach PDF
consumers, and green consumption. This is the positive Green Help

supply chain logistics activities required to achieve resource use

reduction. Green supply chain Reverse logistics activities refers
to the products, resources which do not meet requirements of
Green consumers, marketing back to the manufacturer hands, it
was called The return logistics. when Green products was used by
the Green Consumer, after Recycling of waste products was
inspected and sorted, the products which still has use value were
reusable link back to marketing, a fixed value of the waste, can
then create links back to marketing, the products which can not
be repaired or re-manufactured products enter into the material
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material
 reduction session of Useful materials. After detection and
selection, the useless was burned or landfilled, making a good Contents
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Effort to make the sound back to nature and ecosystems.
PDF 
Decomposition link recovery is reverse recovery of green supply
chain activities, namely recycling logistics


SECTION IV.
RISK ASSESSMENT OF
GREEN SUPPLY CHAIN
MANAGEMENT
A. Setting principles of index system
Green Supply Chain is a large complex system with the features
of many complex variables. For the realization of the purpose and
right risk state's describe the evaluation, monitoring and early
warning and planning regulation, and other basic functions of the
Index System, and the existence of problems in risk assessment
index system, the design of green supply chain Risk Valuation
Index System should be followed as scientific rationality,
feasibility, hierarchy, independence and the principle of
representation of wedlock, in addition to the following principles
in particular Emphasized[6].

1. The overall principle. We should select indicator system

from the perspective of system theory to supply chain
operations, risks involved in all aspects of information
reflects, Then according to the methods need to adopt
certain key risk factors are extracted into the target system.
Hence, the ideal result is an index system meets the design
representation, but also to meet the comprehensive.

2. Dynamic principle. Supply chain risk assessment itself is a

dynamic process, an objective requires the establishment of
the dynamic nature of the index system. The choice of
indicators should not only reflect the status of supply chain
risk, but also on the risk to predict future changes in
trends. In addition, the index system should also be flexible
enough to adapt to the changing needs of business reality
[7]– [8].

B. Risk evaluation index system

Different companies have different risk preferences. The same
risk was not at the same level to the enterprises which have
different risk preference. Enterprise's Preference to the risks can
be divided into three categories: Risk-loving type, risk aversion
type, risk-neutral type. The same risk may be considered
acceptable risks in the risk-loving type of supply chain; however,
PDF
it may be considered a very serious risk in the risk aversion type.
Because of the presence of risk preference, when we carry out Help

supply chain risk index assessment, different supply chain risk

assessment on the same choices may be different results. In The
following, we combine the actual situation, given a more
integrated system, a reasonable supply chain risk assessment
system, Specific indicators include:

Organizations risk: supply chain management emphasizes the

system optimization, but due to goal conflicts, the interests of all
members of the supply chain must be contradictions.
IEEE websites placeOrganizations risk includes
cookies on your devicethe
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moral hazard.
 System of control risk: try to ensure the supply chain in good
control policies and procedures, these policies and procedures Contents
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have also been a good implementation. Internal control risk
PDF

improper factors include inventory control risk, financial control
and taxation risk, information risk management, risk and

emergency control risk should be so.

Market risk: the industry's turmoil will run a risk the ownership
of the industry's supply chain, the competitive situation between
the supply chains to supply chain will greatly influence survival.
When the competitor is better than their operating efficiency and
cost, then the business risk increased.

Supply risk: the risk of supply mainly come from the uncertainty
of suppliers and logistics distribution, including supplier quality
risk, the risk of purchasing costs, risks and key logistics provider
risk of failure[9]~ [10].

Demand risk: in the pull-based supply chain, demand determines

production, too large or small demand will run a crucial impact
on the supply chain or even on survive. From the nature of risk,
demand risk is divided into market forecast risk, distributor
selection risk, the risk of the bullwhip effect and key customers
risk of failure. The risk factors above can be expressed in figure 3.


Fig 3: Supply chain risk evaluation index system

PDF
Help
C. Fuzzy—AHP Comprehensive Evaluation Model
Analytical Hierarchy Process(AHP) classify the factors contained
according to the nature and requirements of problem, and form a
hierarchical structure on target, rule, and sub-criteria layer, then
determine the relative weight on the target layer through the
comparing with the factors within the same level. Go on analysis
until the last layer. All factors are given relative to the overall
objectives, and then make a sort according to the level of
importance of them. Its main feature is that it is reasonable to
combine qualitative and quantitative decision-making, making
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the thinking, the law of the psychological. Fuzzy comprehensive
 evaluation is a very effective of multi-factor and decision-making
methods to make a comprehensive assessment to those things Contents
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affected by many factors. Characterized by evaluation results are
PDF 
not absolutely positive or negative, but in a fuzzy set to represent.
Its feather is that evaluation results are not absolutely positive or

negative, but in a fuzzy set to represent. In this paper, green
supply chain risk is assessed by the analytic hierarchy process
and fuzzy comprehensive evaluation methods; we established the
model Evaluation System according to the Evaluation System.

1. Establish index set

B = {B1 , B2 , B3 , B4 }, B1 = {E 11 , E 12 , E 13 , E 14 }, B2 = {E

= {E 31 , E 32 , E 33 , E 34 }, B4 = {E 41 , E 42 , E 43 , E 44 }, B5 = {E

is the reviews set, V = {V , V , V , V , V } , in which V1

1 2 3 4 5

represent Very high risk, V2 represent High risk, V3

represent General risk, V4 represent Low risk, V5represent
Less risk.

2. Comprehensive Evaluate For each Bi

(i = 1, 2, 3, 4) ,
because Eij can not have direct access to the raw data of
quantitative, judging the level rij of Eij belonging to Vij
conducted by the Delphi method or a random survey
according to reviews set V, and thus construct Matrix Ri.

r111 r112 r113 r114 r114

⎡ ⎤

⎢ r121 r122 r123 r124 r125 ⎥

R1 = ⎢ ⎥,
⎢r r132 r133 r134 r ⎥
131 135

⎣ ⎦
r141 r142 r143 r144 r145

r211 r212 r213 r214 r214

⎡ ⎤

⎢ r221 r222 r223 r224 r225 ⎥

R2 = ⎢ ⎥,
⎢r r232 r233 r234 r235 ⎥
231

⎣ ⎦
r241 r242 r243 r244 r245

r211 r212 r213 r214 r215

R3 = [ ],
r221 r222 r223 r224 r225

View Source

r411 r412 r413 r414 r414

⎡ ⎤

⎢ r421 r422 r423 r424 r425 ⎥

R4 = ⎢ ⎥,
⎢r r432 r433 r434 r435 ⎥
431

⎣ ⎦
r441 r442 r443 r444 r445

r511 r512 r513 r514 r514

⎡ ⎤

⎢ r521 r522 r523 r524 r525 ⎥

R5 = ⎢ ⎥.
⎢r r532 r533 r534 r ⎥
531 535

⎣ ⎦
r541 r542 r543 r544 r545

View Source

3. Determine weights set w = {w1 , w2 , ⋯ , wn } through

AHP. According to scaling theory, establish the Matrix PDF
A = (A ) ij
, and Normalize the matrix by the column
n×n Help
n

b ij = a ij / ∑ a ij (i, j = 1, 2, ⋯ , n) , Row-sum
i=1
n

c i = ∑ b ij (i, j = 1, 2, ⋯ , n) , And normalization were

j=1

wi = c i / ∑ c i (i = 1, 2, ⋯ , n), wi is an approximate
i=1

value for the feature vector, which scores the relative

importance of evaluation factors.

4. Making a consistency test, if the consistency test pass, Wi

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of these level of evaluation
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the evaluation factors. Error consistency index
 (AW )
, in which
λ . Random
λmax −n 1 i
CI = = ∑[ ]
 Contents
max
n−1 n Wi

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consistency ratio C R =
CI

RI
, in which RI is the average
PDF
consistency index, when CR < 0.1 , Judgement 
consistency was acceptable.

5. Obtain comprehensive evaluation model through the
synthesis of operation by fuzzy matrix, then make the
whole supply chain risk management assessment. Make a
fuzzy computing to the fuzzy evaluation matrix R and the
factor weight matrix W and the fuzzy operations are
normalized, obtain the quality of the fuzzy comprehensive
evaluation.

r11 r12 ⋯ r1
⎡

⎢ r21 r22 ⋯ r2
Q = W × R = (w1 , w2 , ⋯ wn ) × ⎢
⎢
⎢ ⋮ ⋮ ⋮
⎣
rn1 rn2 ⋯ rn

View Source

Determine the rating level based on the weighted average, it is

assumed that implementation of supply chain risk evaluation
is the system of 10 points, including the evaluation of Very
high risk, High risk, General risk, Low risk, Less risk,
recording as 10,9,8,7 and 6, Vector was obtained by
V = (10, 9, 8, 7, 6) . Assuming Evaluation results was S, so
S = Q × V.9 < S ⩽ 10 represent Very high risk; 8 < S ⩽ 9

represent High risk; 7 < S ⩽ 8 represent General risk;

6 < S ⩽ 7 represent Low risk; 0 < S ⩽ 6 represent Less risk.

D. Application examples
Take the indicators and score as shown in figure 3 for example to
make a comprehensive evaluation of The Green Supply Chain
risk. Under Expert score, two index weight coefficient matrix:

0.8 0.2 0 0 0
⎡ ⎤

′ ⎢ 0.9 0.1 0 0 0⎥
R1 = ⎢ ⎥,
⎢ 0.4 0.6 0 0 0⎥
⎣ ⎦
0.5 0.5 0 0 0

0.8 0.2 0 0 0
⎡ ⎤

′ ⎢ 0.8 0.1 0.1 0 0⎥

R2 = ⎢ ⎥,
⎢ 0.4 0.5 0.1 0 0⎥
⎣ ⎦
0.5 0.5 0 0 0

′
0.2 0.2 0.3 0.1 0.2
R3 = [ ],
0.1 0.1 0.3 0.2 0.3

0.3 0.3 0.3 0.1 0

⎡ ⎤

′ ⎢ 0.2 0.4 0.3 0.1 0 ⎥

R4 = ⎢ ⎥,
⎢ 0.1 0.2 0.3 0.3 0.1 ⎥
⎣
0.5 0.5 0 0 0
⎦ PDF

0.1 0.1 0.1 0.4 0.3 Help

⎡ ⎤

′ ⎢ 0.2 0.3 0.3 0.1 0.1 ⎥

R5 = ⎢ ⎥,
⎢ 0.1 0.2 0.3 0.3 0.1 ⎥
⎣ ⎦
0.2 0.2 0.2 0.2 0.2

View Source

What Can be drawn from the Q i

′
= W i R i [i = 1, 2, 3, 4, 5] is:

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 Q1 = [0.69, 0.31, 0, 0, 0];

 Q2 = [0.63, 0.33, 0, 0, 0];

Contents
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Q3 = [0.15, 0.15, 0.3, 0.15, 0.25];
PDF 
Q4 = [0.26, 0.35, 0.27, 0.11, 0.01];

Q5 = [0.385, 0.238, 0.228, 0.27, 0.150]. 

View Source

And because W = [0.2, 0.15, 0.35, 0.2, 0.1] , we obtained

T
Q = W × (R1, R2, R3, R4, R5)

Q = W × R = [0.2  0.15  0.35  0.2  0.1]

0.69 0.31 0 0 0
⎡ ⎤

⎢ 0.63 0.33 0 0 0 ⎥
⎢ ⎥
× ⎢ 0.15 0.15 0.3 0.15 0.25 ⎥ .
⎢ ⎥
⎢ ⎥
⎢ 0.26 0.35 0.27 0.11 0.01 ⎥
⎣ ⎦
0.385 0.238 0.228 0.27 0.15

= (0.66  0.45  0.41  0.34  0.15)

View Source

From the above model, we can see that Organizations risk is the
most reliable Throughout the supply chain, Enterprises should be
strengthened in the Demand risk's input and improvement.

SECTION V.
CONCLUSION
Green Supply Chain Risk assessment is an important part of
supply chain management, the services it provides is still a lack of
norms to be followed. The green supply chain risk assessment
system mentioned in this paper designed the objectification of
subjective estimates through the use of AHP and fuzzy evaluation
method of combining, improve risk assessment of green supply
chain accuracy considered all things from a system point of view.
Provide decision makers with the risk of the current status of
each link, realize the stability of the supply chain, what can
provide the most direct reference for enterprises whether to join
the supply chain, or to detect and replace high-risk enterprise,
against any part of the supply chain problems. With these as a
improve production efficiency and product efficiency indicators,
creating the industry's products regulate and promote the healthy
development of the industry in the focus of recycling economy
and making the continuous improvement of the green supply
chain.

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