A Multi-Criteria Decision Approach to Select Contract Manufacturer for Sustainable Development of Automotive Products: an Integrated Framework

The increasing pressure on manufacturing organizations to produce eco-friendly products has led these organizations to select sustainable contract manufacturers for outsourcing their products. This study aims to develop an approach for selecting a contract manufacturer (CM), having the capability of producing environmentally sustainable automotive products for original equipment manufacturers (OEMs). A framework is proposed to achieve this task. This framework is developed by integrating two multi-criteria decision-making techniques (MCDM), viz. Analytical Hierarchy Process (AHP) and ViseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR). The selection of the CM for producing eco-friendly automotive products is based on certain criteria (i.e., different life cycle stages of products to be considered by CM) and sub-criteria (i.e., various ecodesign practices to be implemented by CM under each life cycle stage of products). A total of 22 sub-criteria are selected on the basis of literature and expert’s opinion from auto industry and academia. The application of the proposed research has been demonstrated through a case study which includes 4 alternative contract manufacturing companies related to automotive products. AHP method has been utilized to assign the weightage to different criteria and sub-criteria, whereas VIKOR approach has been utilized to evaluate the environmental performance of 4 CMs and to select the most efficient one. Results show that “Ensuring easy maintenance and repair,” “Improving durability and higher reliability,” and “Using alternative manufacturing techniques” are the top 3 criteria for the selection of sustainable CM. In addition, CM3 stands out to be the most sustainable among the four alternative CMs because of the ability to consider key environmental criteria especially during the selection of raw materials and manufacturing processes. The outcomes of this research may be utilized by the OEMs to understand the different criteria for selection of a sustainable contract manufacturer. Also, the proposed approach can lead the OEMs to evaluate the environmental performance of different contract manufacturers and to select the best one.