Benchmarking Process of Screening Suppliers for Environmental Performance : Case: Modern Lumber Technology Ltd and UPM-Kymmene Oyj

Abstract

Green purchasing helps companies avoid potential environmental problems that might arise with their suppliers, which could in turn, threaten their own environmental performance. Modern Lumber Technology (MLT), one of the most dynamically developing wood-processing companies in Russia, takes care of the environment even when it selects suppliers. However, for companies there is always room for improvement and learning something from others. Therefore, the thesis focuses on performing benchmarking on a company’s process of screening suppliers for environmental performance against UPM-Kymmene.

The theoretical framework of the study concentrates on the benchmarking philosophy. Based on the proposed supplier selection model, a situation analysis of the process at UPM is examined. A situation analysis of MLT’s process is based on the proposed model and the analysis of UPM's process. SWOT analysis in the study allows identifying weaknesses in MLT’s process. Based on the weaknesses and the comparison with the UPM's process, suggestions for areas of possible improvement in the process of MLT are provided. The study adopts qualitative method in a deductive approach. To serve the final goal of the thesis, information is collected through various sources. Secondary data is acquired from topic related academic books, journals, the companys' reports and trusted internet sources. Primary data is collected through semi-structured interviews with representatives from the case companies.

The benchmarking study shows that there are weaknesses and threats which could negatively affect MLT’s process. To handle them, the company should create incentives for its employees, strengthen their Code of Conduct, implement an electronic tool to collect supplier data and include transportation as selection criteria.