An innovative integration of fuzzy-logic and systems dynamics in sustainable supplier selection: A case on manufacturing industry

• Fuzzy logic and system dynamics are integrated in sustainable supplier selection.
• A case study in a gear manufacturing industry is presented.
• Simulation runs are carried out in Vensim and compared with TOPSIS.
• Increase in sustainability investment causes exponential increase in total performance.

Globally, supply chains compete in a complex and rapidly changing environment. Hence, sustainable supplier selection has become a decisive variable in the firm’s financial success. This requires reliable tools and techniques to select the best sustainable supplier and enhance understanding about how supplier behavior evolves with time. System dynamics (SD) is an approach to investigate the dynamic behavior in which the system status alterations correspond to the system variable changes. Fuzzy logic usually solves the challenges of imprecise data and ambiguous human judgment. Thus, this work presents a novel modeling approach of integrating information on supplier behavior in fuzzy environment with system dynamics simulation modeling technique which results in a more reliable and responsible decision support system. Supplier behavior with respect to relevant sustainability criteria in the past, current and future time horizons were sourced through expert interviews and simulated in Vensim to select the best possible sustainable supplier. Simulation results show that an increase in the rate of investment in sustainability by the different suppliers causes an exponential increase in total sustainability performance of the suppliers. Also, the growth rate of the total performance of suppliers outruns their rate of investment in sustainability after about 12 months. A dynamic multi-criteria decision making model was presented to compare results from the systems dynamics model.