Title: Supplier selection and performance evaluation for formulating supplier selection strategy by MCDM-based approach
Authors: Rakesh D. Raut; Bhaskar B. Gardas; Balkrishna Eknath Narkhede; Linda L. Zhang
Addresses: Department of Operations and Supply Chain Management, National Institute of Industrial Engineering (NITIE), Vihar Lake, NITIE, Powai, Mumbai, Maharashtra, 400087, India ' Department of Production Engineering, Veermata Jijabai Technological Institute (VJTI), H.R. Mahajani Marg, Matunga, Mumbai, Maharashtra, 400019, India ' Department of Industrial Engineering, National Institute of Industrial Engineering (NITIE), Vihar Lake, NITIE, Powai, Mumbai, Maharashtra, 400087, India ' IESEG School of Management, Paris La Défense, France
Abstract: Effective supplier-base management demands many resources. The purchasing departments of many organisations believe that having more suppliers requires a higher cost. This investigation aims to evaluate the performance of existing suppliers to rationalise the supplier-base and find out top strategic suppliers who can ensure the full supply of products per the market demand. The analytic hierarchy process (AHP) was employed for evaluating the selection criteria and ranking the shortlisted suppliers. The technique for order preference by similarity to ideal solution (TOPSIS) was adopted as well for ranking suppliers based on the weights of the criteria obtained from the AHP evaluation approach. Both methodologies were compared and top performing suppliers were identified. Finally, gap analysis was carried out to determine the effective ranking tool between AHP and TOPSIS methodologies. The results of the study highlighted that volume flexibility is found to be the most significant evaluation criterion and supplier 'VA' is the best amongst all. This study is intended to guide the policy and decision makers in formulating the strategies for the effective supplier selection in highly competitive environments.
Keywords: supplier selection; performance evaluation; multi-criteria decision making; MCDM; procurement strategy.
International Journal of Business Excellence, 2020 Vol.20 No.4, pp.500 - 520
Received: 06 Aug 2018
Accepted: 28 Nov 2018
Published online: 31 Mar 2020 *