Assessing Suppliers beyond Cost and Quality

Abstract

Textile supply chain is complex and is responsible for significant social and environmental challenges. Due to an increase in consumer awareness, textile companies are scrutinized based on their ethical and environmental practices, and to become transparent, companies have included sustainability criteria in supplier evaluation. Sustainability reporting is mandatory for European companies, where large and publicly listed organizations comply with the Corporate Sustainability Reporting Directive (CSRD); whereas SMEs face challenges due to financial constraints, limited human capital, and a lack of administrative framework. Based on greenhouse gas (GHG) emissions data, the ten highest-contributing suppliers of a Swedish SME were evaluated using secondary data publicly available on supplier’s official websites and homepages, against indicators defined in accordance with VSME.

Results

The results indicate that no child labor, forced labor, discrimination, remuneration, disciplinary practices, and health and safety practices, are commonly disclosed social indicators; whereas, energy data, GHG emissions, pollution of air, water and soil, biodiversity water and waste management system, and circular economy initiatives are declared in environmental criteria. The extent of disclosure varies among suppliers depending on their size and geographic location. Small-medium sized suppliers lacked audited sustainability reports, whereas European supplier were more vocal about their sustainability efforts and claims than Asian suppliers.

The study shows the application of social and environmental sustainability criteria in supplier evaluation as well. The criteria can be applied during the pre-qualification phase through data collection and audits to verify compliance. Accordingly, companies can apply a structured model of multi-criteria decision making (MCDM) such as Analytic Hierarchy Process (AHP) and Stepwise Weight Assessment Ratio Analysis (SWARA), to assign weights and evaluate multiple indicators. Moreover, rough set theory and grey system theory can be used to handle vague, imprecise, and incomplete data. In the final step, the Technique for Order Preference by Similarity to an Ideal Solution (TOPSIS) can be applied to rank suppliers by comparing their performance against an ideal solution. The study contributes to the literature on sustainable supply chain management, where findings, and identified social and environmental sustainability indicators can be used by SMEs to improve supplier evaluation efforts, and the proposed application method can support their implementation.

Project details

Type of Study: Field Study

Tagline: Assessing Suppliers beyond Cost and Quality

Title: A structured model for supplier evaluation focusing on environmental and human rights risks across value chains.

Year: 2026

Language: English

Author: Bushra Nazir

Course: Textile Management Field Study

Program: Master Program in Textile Value Chain Management

Researcher / Supervisor: Jenny Balkow and Marianne Louwerse

Case company: Varnamo of Sweden