Supplier Portfolio Selection and Optimum Volume Allocation: A Knowledge Based Method

Selection of suppliers and allocation of optimum volumes to suppliers is a strategic business decision. This paper presents a decision support method for supplier selection and the optimal allocation of volumes in a supplier portfolio. The requirements for the method were gathered during a case study that was conducted within the logistics unit of Shell Chemicals Europe. The proposed method is based on the classical view by Sprague and Carlson of sequence and interaction of the different phases of decision making in a decision support system and supports Kraljic’s portfolio approach for supplier management. This method aims to help the managers in making decisions on the allocation of volumes to suppliers while simultaneously trying to satisfy conflicting objectives of improvement in benefit and reduction in risk. A mathematical model to struc-ture the problem is presented, knowledge elicited from the managers is used to parameterize the mathemati-cal model and a multi-objective, hierarchical optimization procedure produces ‘trade-off’ outputs. The man-agers can also conduct interactive post optimization ‘what-if’ analysi

Application of Multi-Objective Optimization Based on Genetic Algorithm for Sustainable Strategic Supplier Selection under Fuzzy Environment

Purpose: The incorporation of environmental objective into the conventional supplier selection practices is crucial for corporations seeking to promote green supply chain management (GSCM). Challenges and risks associated with green supplier selection have been broadly recognized by procurement and supplier management professionals. This paper aims to solve a Tetra “S” (SSSS) problem based on a fuzzy multi-objective optimization with genetic algorithm in a holistic supply chain environment. In this empirical study, a mathematical model with fuzzy coefficients is considered for sustainable strategic supplier selection (SSSS) problem and a corresponding model is developed to tackle this problem. Design/methodology/approach: Sustainable strategic supplier selection (SSSS) decisions are typically multi-objectives in nature and it is an important part of green production and supply chain management for many firms. The proposed uncertain model is transferred into deterministic model by applying the expected value measure (EVM) and genetic algorithm with weighted sum approach for solving the multi-objective problem. This research focus on a multiobjective optimization model for minimizing lean cost, maximizing sustainable service and greener product quality level. Finally, a mathematical case of textile sector is presented to exemplify the effectiveness of the proposed model with a sensitivity analysis. Findings: This study makes a certain contribution by introducing the Tetra ‘S’ concept in both the theoretical and practical research related to multi-objective optimization as well as in the study of sustainable strategic supplier selection (SSSS) under uncertain environment. Our results suggest that decision makers tend to select strategic supplier first then enhance the sustainability. Research limitations/implications: Although the fuzzy expected value model (EVM) with fuzzy coefficients constructed in present research should be helpful for solving real world problems. A detailed comparative analysis by using other algorithms is necessary for solving similar problems of agriculture, pharmaceutical, chemicals and services sectors in future. Practical implications: It can help the decision makers for ordering to different supplier for managing supply chain performance in efficient and effective manner. From the procurement and engineering perspectives, minimizing cost, sustaining the quality level and meeting production time line is the main consideration for selecting the supplier. Empirically, this can facilitate engineers to reduce production costs and at the same time improve the product quality. Originality/value: In this paper, we developed a novel multi-objective programming model based on genetic algorithm to select sustainable strategic supplier (SSSS) under fuzzy environment. The algorithm was tested and applied to solve a real case of textile sector in Pakistan. The experimental results and comparative sensitivity analysis illustrate the effectiveness of our proposed model.Peer Reviewe

Construction of capital procurement decision making model to optimize supplier selection using Fuzzy Delphi and AHP-DEMATEL

Purpose – Supplier selection for capital procurement is a major strategic decision for any automobile company. The decision determines the success of the company and must be taken systematically with the utmost transparency. Therefore, the aim of this study is the construction of capital procurement decision making models to optimize supplier selection in the Indian automobile industry. Design/methodology/approach – To achieve the stated objective, a combined approach of fuzzy theory and AHP-DEMATEL is applied. Evaluation parameters are identified through an extensive literature review and criteria validation has been introduced through a Fuzzy Delphi method by using fuzzy linguistic scales to handle the vagueness of information. AHP is employed to find the priority weight of criteria although an inter-relationship map among criteria is not possible through AHP alone since it considers all criteria as independent. To overcome this, DEMATEL is used to establish cause-effect relationships among criteria. Findings – The results show that the total cost of ownership is the first weighted criterion in supplier selection for capital procurement, followed by manufacturing flexibility and maintainability, then conformity with requirement. The cause-effect model shows that supplier profile, total cost of ownership, service support and conformity with requirement are in the cause group and are considered to be the most critical factors in selecting the supplier. Originality/value – The study’s outcome can help the automobile industry to optimize their selection process in selecting their suppliers for capital procurement; the proposed model can provide guidelines and direction in this regard.N

CSR and environmental criteria in supplier selection

Session - Green Manufacturing Technology: paper no. M3C1The APIEMS 2012 Conference proceedings' website is located at http://apiems.net/conf2012/The supplier selection issue in today’s world does not simply depend on price anymore. Other non-price criteria such as quality, delivery and overall capability are gradually gaining equal importance. Because of the globalization of trade, the world is becoming an increasingly open and global marketplace where the intense competition is urging companies to reduce the cost and development time of a new product. Companies are forced to take every possible factor into consideration when making the strategic decision to minimize costs and product development time. That means besides taking price into consideration, companies now also has to assess the overall capability of the suppliers, such as production capability, technological capability, company reputation and other factors that are hard to be quantified, in order to make the most informed decision to strive for a balance between lowering profits and rising costs. Different companies have their own ways in carrying out the supplier selection process that aligns with their corporate strategy. This paper is interested in what criteria are used in supplier evaluation and the ranking of the criteria importance. In particular, the focus is the incorporation of corporate social responsibility (CSR) and environmental responsibility (ER) requirements into supplier selection. With the increasing awareness of CSR and ER, large international corporations have been paying more attention in selecting suppliers that are capable of adhering to the practice of sustainability. Hence, this paper aims to find out what criteria or performance indicators are adopted by companies to assess their suppliers, and how much importance CSR and ER contributes to the final decision of the selected supplier. A multi-agent system is implemented with a multi criteria decision making model to incorporate the criteria identified for evaluating supplier performance and selecting the most suitable supplier.published_or_final_versio

Improving Retail Supply Flexibility using Buyer-Supplier Relational Capabilities

Purpose This study investigates the mediating role of three important relational capabilities - Absorptive Capacity, Transactive Memory Systems, and Organizational Interoperability; on the flexibility of buyer-supplier relationships and performance in retail supply chains. Drawing on the Relational view of strategic management, the impact of relational capabilities on two forms of supply chain flexibility is examined – (a) Configuration Flexibility for switching suppliers with minimal penalties and (b) Planning and Control Flexibility for altering supply schedules, quality, and delivery lead-time. Design/methodology/approach Strategic and tactical level managers from 211 retail stores in the UK were surveyed. We validated a measurement model with structural equation modeling, and tested four hypotheses on the mediating role of relational capabilities on supply chain flexibility and retail performance, controlling for size, duration of relationship and market segment. Findings Results showed that the three relational capabilities partially mediated the positive effect of configuration flexibility and planning and control flexibility on operational performance in big-middle and niche retailers. Examining the interaction effect of the forms of flexibility on the relational capabilities and performance, we found positive interaction effects on Transactive Memory Systems and Organizational Interoperability but a non-significant effect on Absorptive Capacity. Practical Implications In addition to providing novel theoretical insights on supply chain flexibility, our findings have practical implications for supplier selection and buyer-supplier relationship management. Originality/value Overall, the study highlights the impacts of relational capabilities on adopted operational strategies such as flexibility, buyer-supplier relationships, and retail performanc

Supplier selection for strategic supplier development

This article describes the application of the analytic hierarchy process (AHP) to the supplier selection decision for the strategic development of lean suppliers at a large German industrial company. In a literature survey and from explorative interviews, relevant criteria including supplier improvement potential through buyer involvement, strategic factors of the supplier development program as well as project success factors in supplier development were elaborated. Subsequently a decision model based on the analytic hierarchy process was developed and applied to the supplier selection. All steps of the model development are described in detail and the application of the model is illustratedSupplier Selection ; Supplier Development ; Analytic Hierarchy Process

THE IMPACT OF STRATEGIC PURCHASING TO THE SUPPLIER INVOLVEMENT THROUGH COMMUNICATION, COORDINATION AND COLLABORATION IN SMAAL AND MEDIUM ENTERPRISES

In recent times, the theory of purchasing and supply operations has been widely studied under a variety of labels and for a number of reasons. Realizing competitive advantage from organizational alignment and relation to materials supply is for a form of backward integration. In the process, the manufacturing organization obeys demands from distributors; purchasing is in turn re-structured and managed to achieve improved customer value for manufacturing; thereafter, the process addresses the suppliers to the organization (external integration) typically involving supplier rationalization and the introduction of supplier evaluation systems. Based on previous research, there was finding that strategic purchasing has been impact to communication, coordination and collaboration with supplier which is increase supplier involvement. According to a survey 100 respondent which was conducted by means questionnaires and 94 completed questionnaires were returned. Six responses were considered incomplete and had to be discarded, and this left 86 valid responses. This study result are strategic purchasing has a positive significant effect to communication is 0.314; positive significant effect to coordination is 0.336; and positive significant effect collaboration is 0.365. Communication and Collaboration directly will bring significant contribution to supplier involvement, but coordination is not directly. Key words: Strategic purchasing, communication, collaboration, coordination, supplier involvement

A supplier selection strategy within the Malaysian telecommunications industry

The telecommunication industry in Malaysia has grown rapidly over the last 15 years, with effective supply chain management becoming increasing important within the sector. A multitude of providers and part owned Malaysian government companies, vendors and suppliers are involved in generating and creating value-adding products and services within this sector (across wireless, wireline, broadband business and consumer lines of business). This paper describes key challenges facing a major telecoms service provider in Malaysia with regards to drivers involved in the overall procurement and supplier selection with regards to components of performance management, decision-making, selection techniques, quality and cost management, procurement policy and procurement ethics. This paper further focuses on defining and detailing research currently being undertaken to develop a framework for identifying supplier selection drivers that are inherent within the sector and suggests a research approach to investigate and develop strategies for supplier selection for the telecommunications industry in Malaysia

Congruency fit: beyond performance in the auto supplier industry

The effects of manufacturing strategy (MS) and technology (T) on performance have been studied separately, but few studies have examined the relationship between MS and T practices clusters that improve effectiveness when implemented jointly, and even then they do not consider possible congruency between the two. This paper develops a congruency (selection) model to test for any interconnection between said clusters, without addressing causation or their combined effect on performance. The implicit outcome is that the plant will achieve a desirable effectiveness level. Through a wide-ranging survey of auto supplier plants, two approaches are considered: 1) grouping both clusters in pairs (canonical correlation analysis); and 2) a more general selection view version, with practices from both clusters related multidimensionally and subordinated by bivariate analysis (regression) to test for any congruent pattern. Both methods find a congruent relationship between manufacturing strategy and technology practice clusters, although the second provides greater detail.Ministerio de Educación y Ciencia DPI-2006-0553