A framework for green supply chain management in the construction sector: A case study in Indonesia

Journal of Industrial Engineering and Management JIEM, 2021 – 14(4): 788-807 – Online ISSN: 2013-0953 – Print ISSN: 2013-8423 https://doi.org/10.3926/jiem.3465 A Framework for Green Supply Chain Management in the Construction Sector: A Case Study in Indonesia I. Putu Artama Wiguna1, Farida Rachmawati1, M. Arif Rohman1, Larashati B’tari Setyaning2 1Institut Teknologi Sepuluh Nopember (Indonesia) 2Universitas Muhammadiyah Purworejo (Indonesia) [email protected], [email protected], [email protected], [email protected] Received: December 2020 Accepted: September 2021 Abstract: Purpose: In order to implement green supply chain management (GSCM) to support the effort in reducing the environmental impact of the supply chain processes, a framework needs to be developed. This study aimed to propose a conceptual and holistic GSCM framework that represents a roadmap towards GSCM implementation by integrating all green supply chain practices by various stakeholders of the construction sector in Indonesia. Design/methodology/approach: Green supply chain management practices were obtained from an extensive literature review. A questionnaire survey of GSCM stakeholders in the construction sector was conducted to obtain the preference regarding green supply chain variables as the proxy for variable weighting and ranking. Pairwise comparison (PWC) and technique for others preference by similarity to ideal (TOPSIS) were adopted to analyze the weight and to rank the green practices, respectively. The findings from the PWC and TOPSIS were used to develop the framework. Findings: The framework for GSCM in the construction sector in Indonesia primarily focuses on reducing the use of hazardous materials, the management of waste at the project site, selling products and components that are no longer used, using video conferencing both interand intra-organization meetings, and support from the management level in the form EMS and ISO 14001 certification. Research limitations/implications: This study did not include other GSCM performances as criteria, such as operational and logistical performance. Practical implications: An efficient evaluation technique developed through the framework could be used in decision making policies by policy makers and organizational stakeholders that can identify and prioritize the green practices for adoption of GSCM in the construction sector. Social implications: A good framework can connect the benchmarking concept with practical applications because the framework can guide organizations in adopting and implementing benchmarking activities more systematically, comprehensively, and in a timely manner Originality/value: The originality of this research is that the GSCM framework was developed with most relevant green practices based on ranking and weighting criteria, as well as the preferences of the main stakeholders. Keywords: GSCM, framework, construction sector, PWC, TOPSIS -788- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 To cite this article: Wiguna, I.P.A., Rachmawati, F., Rohman, M.A., & Setyaning, L.B. (2021). A framework for green supply chain management in the construction sector: A case study in Indonesia. Journal of Industrial Engineering and Management, 14(4), 788-807. https://doi.org/10.3926/jiem.3465 1. Introduction Sustainability is a major issue for the majority of industries. Climate change and environmental pollution have been some of the greatest concerns for businesses and governments, driving them to evaluate the environmental impacts of their activities (Nurunnabi, 2016). Green Supply Chain Management (GSCM) integrates environmental factors into conventional supply chain management, starting from the process of design, material purchasing, production, distribution, through to end-of-life management (Zhu, Sarkis & Geng, 2005). According to Shipeng (2011), GSCM pays attention to environmental factors in every supply chain activity, both upstream (suppliers) and downstream (consumers). Therefore, activities in GSCM involve several organizations that are stakeholders in every supply chain activity (Zhu, Sarkis, & Lai, 2008). Collaboration between departments in the organization and cooperation between organizations in the application of green concepts at each stage of the supply chain characterize the effective implementation of GSCM. GSCM implementation provides several environmental benefits, such as reducing carbon emission levels, increasing reused and recycled materials, reducing the use of hazardous materials, saving energy usage, and reducing waste production (Balasubramanian & Shukla, 2017; Zhu et al., 2005). In addition, cost reduction is the most important benefit (Hervani, Helms & Sarkis, 2005). Costs will decrease in operational activities in both the manufacturing and construction sectors if changes toward green strategies are broadly and effectively made (Ali, Saad, Sabir, Muhammad, Salman & Zeb, 2019). Therefore, GSCM implementation can positively influence an organization’s economic performance, such as increased sales, market share, and profits (Alvarez, Jimenez & Lorente, 2001; Laari, Teoyli, Solakivi & Ojala, 2016; Zhu & Sarkis, 2004). To improve the economic and environmental performance, the organizational performance, which can provide a long-term and complete picture of the benefits of implementing green practices (Green et al., 2012), must be considered (Zhu & Cote, 2004). The construction sector needs to implement GSCM as the negative impact on the environment caused by this sector is quite large. Globally, the construction sector produces one-third of total carbon emissions, one-third of total energy use, one-fourth of water use, and 40% of waste (UNEP-SBCI, 2016). Therefore, the construction sector needs to consider implementing GSCM. According to Shurrab, Hussain and Khan (2018), the implementation of the green concept in the construction sector, especially building projects, is still focused on the green design component, such as efforts to minimize energy use and increase comfort. A good framework could connect the benchmarking concept with practical applications, because the framework could guide organizations in adopting and implementing benchmarking activities more systematically, comprehensively, and in a timely manner. Deros, Yusof and Salleh (2006), defined a framework as a simplified set of theoretical principles and practical guidelines for carrying out the implementation and adoption of benchmarking to increase the chance of success, which is easy to understand, efficient, and can be implemented within a reasonable cost and time. This study was conducted in the East-Java province, Indonesia. Indonesia is an emerging economic country, for example, there were 233 planned public infrastructure projects in 2014 - 2019 (Bappenas, 2014). Thus, there are potential sustainability issues, especially related to green supply chain management problems. The majority of past studies have focused on GSCM implementation on manufacturing or general industry (Mohanty & Prakash, 2013; Zaid, Jaaron, Talib & Abdul, 2018) and construction projects, including green design, purchasing, supplier, innovation, and operation (Saputra, 2015; Hardiani, 2016; Le, 2020). However, the stakeholders and green practices are partial and disjointed, as they only involved contractors and consultants (Zulfikar, 2020), Wibowo, Handayani and Mustikasari (2018), examined a GSCM framework using five dimensions based on life cycle, while Ali et al. (2019), ranked six alternatives of GSCM practices using fuzzy TOPSIS. GSCM studies in construction sector have -789- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 also been conducted in some emerging economic countries, such as Pakistan (Ali et al., 2019), UAE (Balasubramanian & Shukla, 2017), Indonesia (Wibowo et al., 2018), and India (Singh & Misra, 2020). However, some previous studies (Balasubramanian & Shukla, 2017) did not provide a ranking, as they provided factors that correlated with using Structural Equation Model (SEM). A study related framework that represents a holistic roadmap towards GSCM implementation along with green practices and stakeholders is required. Therefore, this study aimed to develop a holistic GSCM framework for the construction sector in Indonesia. This involved the main stakeholders at the project site, namely, the owner, design consultant, contractor, and supplier. This study also provides weighting and ranking for the GSCM practices and all relevant stakeholders. The integration of stakeholders and technologies is an important part of the supply chain management (Budiarto, Prabowo & Herawan, 2017). First, this paper provides a theoretical perspective of the related concepts followed by the research methods and case study description. The theory and case study are then compared, based on the questionnaire survey completed by respondents from construction companies. The recommendations are summarized based on the theory and data analysis results. Finally, the conclusions and implications for future research are stated. 2. Supply Chain Management (SCM) and Green Supply Chain Management (GSCM) The supply chain is a combination of all company activities to meet consumer needs, involving transformation and flow of products from raw materials to end consumers and is accompanied by the flow of information and money (Li, 2007). A series of activities in the construction sector supply chain include planning, design, and production on-site (Winch, 2010). Compared to supply chains in other sectors, the supply chain in the construction sector is more complicated, diverse, and fragmented because it involves many stakeholders (Rezgui & Miles, 2009). Supply chain management is very important in company operations because it includes all elements that participate and integrates all activities ranging from the purchasing of raw materials to distribution to consumers and managing labo5r shortages, and the scarcity of construction materials and equipment (Cooper, Douglas, Martha & Pagh, 1997; Simatupang & Sridharan, 2016). Success factors in the construction supply chain include communication, trust in suppliers, and risk allocation; thus, there is a need for effective communication with suppliers to increase trust, scheduled discussions to highlight problems experienced by suppliers during the project’s life cycle, and formation of a risk management team involving suppliers (Abas, Khattak, Tufail & Nadir 2020). GSCM is a concept that incorporates environmental considerations into conventional SCM (Zhu, Geng & Lai, 2011), into both upstream and downstream activities (Shipeng, 2011). According to Jung (2011), GSCM is part of the efforts to integrate environmental parameters with SCM. A green construction project could be achieved when all stakeholders implement whole or partial green practice in every single stage of supply chain, starting from the design phase through to end-of-life management; thus, stakeholders must be able to cooperate and align each other’s interests (UN Global Compact, 2010). Efforts to “green” supply chains in the construction sector require the involvement of all supply chain stakeholders. Therefore, the inability of one of the stakeholders to fulfill these efforts to be more environmentally friendly can affect the entire business at all stages of the supply chain. Although the construction sector has different characteristics compared to other sectors, management ideas and best practices from those sectors, such as GSCM, can still be applied (Harty, 2008). The advantages of implementing GSCM are reducing costs through reducing material purchases and energy consumption, integrating suppliers in decision-making processes that support green innovation, growing market share, and increasing profits (Bowen, Cousins, Lamming & Faruk, 2001; Zhu & Sarkis, 2004). 2.1. Green Supply Chain Management Practices Every activity carried out by companies can have a negative impact on the environment, which is why companies apply GSCM practices (Balasubramanian & Shukla, 2017). Companies need to implement green practices in the production process and supply chain to reduce environmental impacts (Roztamzadeh, Govindan, Esmaeili & Sabaghi, 2015) because the environment is affected at every phase of production process (Walker, Sisto & Bain, 2008). GSCM practices can be divided into several practices based on previous studies with GSCM in the -790- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 construction sector topic. Balasubramanian and Shukla (2017) categorized GSCM practices into green design, purchasing, transportation, construction, as well as end-of-life management. Shurab et al. (2018) divided GSCM practices into green practices, energy and water saving, facilitating green practices, environmental training, and green purchasing. Ali et al. (2019) divided GSCM practices into green design, procurement, production, warehousing, transportation, and recycling. Green design refers to activities conducted to reduce the negative impact of products and services on the environment during their lifetime (Rostamzadeh et al., 2015). The green design consists of planning where to buy material, how to make the product, and how to dispose of the expired product (Ali et al., 2019). Selection of suitable green materials can minimize bad impacts on the environment, such as the use of prefabricated components that can ease the construction process as well as reduce waste. In addition, the demolition stage is also the result of the material selection process, as it can increase the amount of recycled material and components (Ng, Wong, Skitmore & Veronika, 2012) so that waste generation, water pollution, carbon emissions, and energy consumption can be minimized (Mitra, 2014). Green purchasing is when stakeholders involved purchase environment friendly material, such as material with characteristics such as lack of hazardous materials, recyclability, and reusability (Rostamzadah et al., 2015). Moreover, green purchasing requires a high concern for sustainability in the material purchasing process such as cost, quality, and reliability (Eltayeb, Zailani & Ramayah, 2011). According to Chan (2001), companies are unaware of the fact that green purchasing can reduce production costs and play a role in implementing sustainable policies in all parts of the company. Green transportation is carried out by the construction sector to reduce adverse environmental impacts associated with transportation activities (BRE, 2003). Six to eight percent of carbon produced during the construction process comes from material transportation (Ng et al., 2012); thus, it is necessary to apply green transportation, such as carry materials via full trucks and using fuel-efficient vehicles. In addition, the use of public transportation for employees, choosing the location of employee shelters close to the project location and the use of technology such as video calls during meetings can reduce the adverse effects of transportation activities (TemaNord, 2010; BRE, 2003). Green transportation can save expenses and substantially contribute to the economic development and sustainability. The importance of a warehouse cannot be overlooked in the supply chain in all industrial sectors (Bartolini, Bottani & Grosse, 2019). In every logistic activity, warehouses greatly contribute to the emergence of greenhouse gases; thus, impacting global warming. Warehousing activities account for 11% of the total greenhouse gases emissions due to logistic activities. Therefore, companies must begin to pay attention, not only to the economic and operational performance of warehousing activities, but also their environmental performance so that green warehousing practices can be developed. Green construction is a series of processes in which a profitable and competitive industry builds assets (buildings, structures, supporting infrastructure, and the surrounding environment) that can provide benefits, such as improvement in the quality of life and customer satisfaction, flexibility and adaptability for future changes, offering desirable nature and environment, and maximizing the efficient use of resources (OGC, 2000). Green construction in Indonesia has become popular because the government is applying the concept of sustainable development as a national agenda (Wirahadikusumah & Ario, 2015). According to Balasubramanian and Shukla (2017), green construction refers to on-site practices that aim to minimize the adverse impact on the environment caused by the construction sector. Green construction aims to minimize the pollutants released into the soil, water, and air during the construction stage through continuous improvement (Johansson & Winroth, 2009). In addition, the integration of green production can help companies to reduce environmental safety costs, reduce material costs, and improve efficiency (Bidgoli, 2010). Green recycling, also known as reserve logistics, is defined as the practice of reusing a product after the usage period of the product has expired (Rao & Holt, 2005). Products that have expired will experience one or several green practices, including being reused, recycled, repaired, updated, remanufactured, or disposed (Eltayeb et al., 2011). Green recycling practices can add value to companies and help shape their image as a positive and responsible company (Ali et al., 2019). Blengini (2009) reported that end-of-life management can minimize -791- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 greenhouse gases emissions by approximately 18% and total energy spent during the life cycle of a building by approximately 30%. Facilitating green practices must be supported by management so that the implementation of GSCM practices can be realized. Green practices in the construction sector must be supported more strongly than those in other sectors because the supply chain in the construction sector is more complex than others (Balasubramanian & Shukla, 2017). These practices must be facilitated by all stakeholders (the owner/developer, consultant, contractor, and supplier) in the supply chain. The indicators in each green practice were obtained from the literature review. These indicators were then selected and could be adopted in a construction project context through a preliminary survey, as shown in Table 1. GSCM Practice Source Green Design Balasubramanian & Shukla, 2017; Shurab et al., 2018; Ali et al., 2019 Provision for natural ventilation (GD1) Balasubramanian & Shukla, 2017 Provision for natural lightning (GD2) Balasubramanian & Shukla, 2017 Integration of photovoltaic panels (GD3) Balasubramanian & Shukla, 2017; Shurab et al., 2018 Consideration for an energy-efficient lighting system (GD4) Balasubramanian & Shukla, 2017; Shurab et al., 2018 Consideration for energy-efficient Heating, Ventilation and AirConditioning (HVAC) systems (GD5) Balasubramanian & Shukla, 2017; Shurab et al., 2018 Consideration of materials with high recycled content (GD6) Balasubramanian & Shukla, 2017; Ali et al., 2019; Mitra, 2014 Consideration of materials with low embodied energy (GD7) Balasubramanian & Shukla, 2017; Mitra, 2014 Provision for the use of prefabricated components (GD8) Balasubramanian & Shukla, 2017 Consideration to reduce the use of hazardous materials (GD9) Balasubramanian & Shukla, 2017; Ali et al., 2019 Provision for wastewater recycling systems (GD10) Balasubramanian & Shukla, 2017; Shurab et al., 2018 Green Purchasing Balasubramanian & Shukla, 2017; Shurab et al., 2018; Ali et al., 2019 Purchasing recycled material (GP1) Shurab et al., 2018 Purchasing nontoxic material (GP2) Shurab et al., 2018 Purchasing eco-labeled material (GP3) Zhu et al., 2005 Suppliers must apply environmental management system (EMS) to take part in tenders (GP4) Shurab et al., 2018; Ali et al., 2019 Suppliers must have ISO 14001 certification to take part in tenders (GP5) Shurab et al., 2018; Zhu et al., 2005 Suppliers must have previous experience in providing green material to take part in tenders (GP6) Shurab et al., 2018 Cooperation with suppliers for environmental objectives (GP7) Zhu et al., 2005 Green Transportation Balasubramanian & Shukla, 2017; Ali et al., 2019 Provision of accommodation to employees near project sites (GT1) Balasubramanian & Shukla, 2017 Use of video conferencing (GT2) Zhu, Sarkis & Lai, 2007 Employees are pushed to use public transport and shared transport (GT3) Balasubramanian & Shukla, 2017 Materials are transported in full truckload quantities (GT4) Balasubramanian & Shukla, 2017 Materials are transported in fuel-efficient vehicles (GT5) Balasubramanian & Shukla, 2017 -792- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 GSCM Practice Source Green Warehousing Ali et al., 2019 Effectively sell off used products and scrap components (GW1) Ali et al., 2019 Effectively sell excess capital equipment (GW2) Ali et al., 2019 Green Construction Balasubramanian & Shukla, 2017; Shurab et al., 2018; Ali et al., 2019 Comprehensive waste management plan for projects (GC1) Balasubramanian & Shukla, 2017; Shurab et al. 2018 Use of prefabricated components in projects (GC2) Balasubramanian & Shukla, 2017; Shurab et al. 2018 Use of materials with low embodied energy and high recycled content (GC3) Balasubramanian & Shukla, 2017 Reducing the use of hazardous materials (GC4) Balasubramanian & Shukla, 2017 Automation is used for on-site construction (GC5) Balasubramanian & Shukla, 2017 Fuel-efficient equipment/machinery are used in projects (GC6) Balasubramanian & Shukla, 2017; Shurab et al. 2018 Implementation of wastewater recycling technology (GC7) Shurab et al. 2018 Green Recycling Balasubramanian & Shukla, 2017; Ali et al., 2019 Recover scrap from projects at the end of their lifecycle (GR1) Ali et al., 2019 Utilize waste produced by others in an innovative, useful, and effective way (GR2) Ali et al., 2019 Environmental impact assessment during end-of-life demolition of projects (GR3) Balasubramanian & Shukla, 2017 Materials from demolished projects are recycled (GR4) Balasubramanian & Shukla, 2017 Facilitating Green Practices Balasubramanian & Shukla, 2017; Shurab et al., 2018 EMS & ISO Certification (FGC1) Balasubramanian & Shukla, 2017, Shurab et al. 2018 Environmental training (FGC2) Balasubramanian & Shukla, 2017, Shurab et al. 2018 Environmental auditing (FGC3) Balasubramanian & Shukla, 2017 Green-related research and development (FGC4) Balasubramanian & Shukla, 2017 Table 1. Previous studies on GSCM Practices 2.2. Green Supply Chain Management Performance Performance measurement plays an important role in company success and includes building goals, evaluating performance, and determining future actions (Gunasekaran, Subramanian & Rahman, 2015). In GSCM, good environmental performance is the main goal; however, implementing GSCM requires a large investment, so companies that focus on only environmental performance have imbalanced risk in shortand long-term financial performance. Organizational performance is relevant to the construction sector because it can provide a long-term and complete picture of the benefits of implementing green practices (Green, Zelbst, Meacham & Bhadauria, 2012; Setyaning, Wiguna & Rachmawati, 2020). In this study, GSCM performance was examined as a combination of environmental performance, economic performance, and organizational performance. The indicators of environmental performance in both manufacturing and construction sectors have similarities (Farida, Handayani & Wibowo, 2019), such as reduction in the use of hazardous materials, workplace accidents and safety issues, and carbon emissions. Economic performance indicators in both sectors include reducing material costs, waste treatment, and energy use. According to Balasubramanian and Shukla (2017), organizational performance measures relevant to the construction sector include increased revenue, sale prices, market share, investment returns, and profits. -793- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 2.3. Green Supply Chain Management Framework Deros et al. (2006) stated that a framework is a practical guideline for implementation that contains a simplified set of theoretical principles that could be implemented easily and effectively. Some authors have proposed various frameworks in GSCM research. Balasubramanian and Shukla (2017) developed and validated the multidimensional GSCM framework for the construction sector covering all core stages of the supply chain and considering the role of each stakeholder involved at that core stage. Ghobakhloo, Tang, Zulkifli and Ariffin (2013) integrated a variety of pre-existing GSCM frameworks with literature study methods. While Kazancoglu, Kazancoglu and Sagnak (2018) created a comprehensive GSCM performance assessment framework based on circular economy theory consisting of environmental, economic, logistics, operational, organizational, and marketing performance. In general, a framework is developed to improve the implementation of green supply chains. This objective will be influenced by the various clusters and factors and how they are all correlated. These relationships may vary due to assumptions made by the decision-makers and the level of complexity that they wish to model. The relationship among factors is symbolized by the arrows. For this study, the final result was the creation of a GSCM implementation framework or chart in the construction sector that could improve environmental, economic, and organizational performance. These sub-factors were linked, and the order and weight were determined using AHP analysis and TOPSIS analysis. 3. Research Methodology This study used a quantitative approach that employed primary data gathered from a questionnaire survey. A pilot survey was distributed to three green construction experts with more than 10 years’ work experience. They were asked to provide their preferences related to green construction variables to validate the relevant research variables. There were 53 variables listed in the pilot survey, which 14 irrelevant variables were then removed. GSCM practice was used in the main questionnaire if two out of three experts provided relevant answers. Subsequently, the updated questionnaire was then administered to respondents. It tooks around 2 months for data collection. The major obstacle was seeking the respondents as the survey was conducted in the beginning of pandemic situation when many institutions asked their staff to work from home. The main questionnaire’s respondents were stakeholders in building construction projects that had applied the green concept, consisting of five project owners, five persons from planning consultants, five persons from contractor companies, and five persons from supplier companies. Build contract were applied to all observed construction project. Therefore, owner, contractor, planning consultants and supplier are key players in the construction project, which then they were asked to participate in this survey. All respondents had 5-10 years’ work experience, which is in accordance with sample profile consideration. According to Hair, Black, Babin, Anderson, & Tatham (2007), the decision-making group should have a minimum of five members and a maximum of 50. There were five respondents for each stakeholder in this study, with a total of 20 respondents. The respondents were recruited using purposive sampling and snowballing. These methods were selected as respondents had to be experts in green construction projects. In addition, these methods are useful in building a network for specific research when the specific population is yet to be made available (Etikan, Musa & Alkassim, 2016). In addition, some respondents were recommended by other respondents due to their expertise and roles in construction projects. They were actively involved in four on-going apartment projects. The questionnaire survey results were analyzed using pairwise comparison (PWC) method and technique for others preference by similarity to ideal (TOPSIS) methods. Pairwise comparison was used to calculate the weight of criteria and TOPSIS was used to rank alternatives consisting of indicators in GSCM practices. Criteria weighting and variable ranking were used to develop a holistic GSCM framework according to construction project life cycle with responsible and relevant stakeholder in each stage. In this study, pairwise comparison was combined with TOPSIS to obtain more accurate and objective ranking results. The combination of these two methods supported each other, as PWC is suitable for determining the weight and hierarchy of criteria, whereas TOPSIS is able to rank items by applying the concept that the optimal alternative must have the shortest distance from the positive ideal solution and the farthest distance from the -794- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 negative ideal solution. The results obtained from the combination of PWC and TOPSIS methods were able to rank many alternatives, and these were then used to develop the framework. The detail procedure is depicted through flow chart on Figure 1. Figure 1. Flow chart 4. Data Analysis 4.1. Weighting Criteria Pairwise comparison was used to calculate the weight of the criteria, namely environmental, economic, and organizational performance. The measurements used in the comparison matrix are shown in Table 2. Intensity Definition Explanation 1 Equal importance Two activities contribute equally to the object 3 Moderate importance Slightly favors one over another 5 Essential or strong importance Strongly favors one over another 7 Demonstrated importance Dominance of the demonstrated importance in practice 9 Extreme importance Evidence favoring one over another with the highest possible affirmation 2, 4, 6, 8 Intermediate values When compromise is needed Table 2. Measurement of Criteria Variables -795- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 The process of weighting the criteria began with compiling the pairwise comparison matrix, normalizing the pairwise comparison matrix, calculating the criteria weight, and checking the consistency of the pairwise comparison matrix by calculating the consistency index and consistency ratio. In the data collection process, respondents were asked to choose more important variable by comparing the importance of two variables. The example of question and option is shown in Figure 2. Figure 2. Sample of question In Figure 2, it exemplifies how to choose the more important between two variables, such as for economy is strongly favors compared to organization, while organization is more favorable than environment. The detail results of these steps are described in Tables 3-5. Criteria Economy Environment Organization Economy 1 1.26 0.75 Environment 0.80 1 1.04 Organization 1.34 0.96 1 Table 3. Pairwise Comparison Matrix Criteria Economy Environment Organization Weight Economy 0.32 0.39 0.27 0.326 Environment 0.25 0.31 0.37 0.312 Organization 0.43 0.30 0.36 0.362 Table 4. Normalized Pairwise Comparison and Criteria Weight λmaximal = 3.034 Consistency test according to Saaty (1994) can be calculated using the formula: -796- Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3465 Declaration of Conflicting Interests The authors declare no potential conflicts of interest with respect to the research, authorship, and/or publication of this article. Funding This paper is a part of the “Green Supply Chain Management Framework for Construction Sector” research. The researchers acknowledge the Institut Teknologi Sepuluh Nopember, who provided funding for this research. References Abas, M., Khattak, S.B., Tufail, H., & Nadir, U. (2020). 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