Effect of Interdependency among Supplier Selection Criteria on Supplier Selection in the Automotive Industry

Most organizations prefer to outsource their activities which are not cost-efficient. The proper supplier selection requires all criteria to be clearly identified and investigated. Previous studies indicate that interdependencies exist among the criteria of supplier selection, and this may have an effect on the rankings of suppliers. In this study, six criteria for supplier selection (Cost, Quality, Delivery Reliability, Flexibility and Responsiveness, Professionalism, and Long-Term Relationship) were identified through literature and the interdependencies among them were investigated. A questionnaire was developed to identify weights for the criteria and sub-criteria of supplier selection and to identify the interdependencies among them. One set of this questionnaire was sent to three companies (two in Malaysia and one in Iran) related to automotive industry. Five expert decision makers in each Malaysian company answered the questionnaire and six in Iran. The supplier selection evaluation was done under two conditions, with and without considering interdependencies. An Analytic Hierarchy Process (AHP) method was used when the criteria were assumed independent. For interdependencies, Analytic Network Process (ANP) and a hybrid Modified TOPSIS (Technique for Order Performance by Similarity to Ideal Solution) were used. A trial version of Super Decisions 1.6.0 software was used to develop all the three methods. The optimal ordering quantity was then determined by means of a multi-objective decision making (MODM) technique named Preemptive Goal Programming (PGP) aimed to maximize the Total Value of Purchasing (TVP) and to minimize the Total Cost of Purchasing (TCP) using a trial version of Win QSB 1.0 as a linear programming software. Findings from the model show that by considering the interdependencies, the optimal ordering quantities have been changed. Based on this fact, in all three companies the hybrid Modified TOPSIS is more effective than ANP and AHP methods. The results for PROTON show that the hybrid Modified TOPSIS had the optimal TVP of 2,542 units, while the values for AHP and ANP were 1,609 and 1,515 units respectively. However, all three methods present the TCP value of 306,575 US Dollars. This trend was also seen in the other two companies. The results showed that interdependencies existed among the criteria and they influence the decision of supplier selection. The study was conducted for one particular product. Similar methods can be used to identify the best supplier selection with other products and other manufacturing industries

Analisis Pemilihan Kriteria Vendor dengan Menggunakan Metode Analytical Network Process (Anp) di PT. Xyz (Studi Kasus pada Proyek X)

PT. XYZ merupakan Perusahaan yang bergerak di bidang proyek. Dalam USAha memenuhi pengadaan material untuk fabrikasi terdapat beberapa masalah dalam pembeliannya, diantaranya adalah keterlambatan pengiriman material sehingga mengakibatkan proses produksi menjadi terlambat, kuantitas yang tidak sesuai dengan yang dipesan dan kualitas material yang dikirim tidak sesuai dengan standar Perusahaan. Vendor merupakan hal penting yang erat hubungannya dengan proses pengadaan material, karena vendor yang akan menyuplai segala kebutuhan material yang dibutuhkan oleh proses fabrikasi. Dalam penelitian ini, metode yang digunakan adalah metode Analytical Network Process (ANP). Metode ini merupakan pengembangan dari metode Analytical Hierarchy Process (AHP). Metode ANP ini mampu mengakomodasi keterkaitan antar kriteria dan sub-kriteria. Dari penelitian ini, terdapat 5 kriteria dan 13 sub-kriteria. Berdasarkan pengolahan data diperoleh bobot untuk kriteria adalah: Kualitas 39,841%. Biaya 28,358%. Servis 14,617%. Sedangkan dari sub-kriteria adalah Sesuai Spesifikasi 16,438 %, Ketahanan 13,047% dan Harga dengan bobot 12,575% . Kata kunci: Pemilihan Kriteria Vendor, Pengambilan Keputusan, Analytical Network Process PT. XYZ is a company engaged in the project. In an effort to meet the fabrication requirement, there are some problems such as delay in delivery of the material, resulting in the production process becomes too late, according to the quantity ordered and the quality of materials sent not in accordance with company standards. Vendor is an important thing that related with the material procurement process, because vendors who will supply all the material needs required by the fabrication process. In this study, the method used is Analytical Network Process (ANP). This method is the development of the Analytical Hierarchy Process (AHP). ANP method is able to accommodate linkages between criteria and sub-criteria. From this research, there are five criteria and 13 sub-criteria. Based on the acquired data processing weights to the criteria are: Quality 39.841%, Cost 28.358 and Services 14.617%. As for the sub-criteria are: Fit to Specifications 16.438%, Durability (K-3) 13.047%, Price 12.575% . Keywords: Vendor Selection, Decision Making, Analytical Network Process DAFTAR PUSTAKA Alidrisi, Hisham. 2014. An ANP-based Multi Criteria Decision Making Model for Supplier Selection. Departement of Industrial Engineering, King Abdulaziz University, Jeddah, Saudi Arabia. Beil Damian. 2009. Supplier Selection. Stephen M. Ross School of Business. Chen, Injazz J. dan Antony Paulraj. 2004. Towards a theory of supply chain management: the constructs and measurements. Journal of Operations Management 22. Gang Kou, Daji Ergu, Yi Peng, Yong Sh. 2013. Data Processing for the AHP/ANP. Springer Heidelberg, New York Dordrecht London. Hidayat, Fariz. 2014. Analisis Perbedaan Manhour Actual dengan Planning di Departemen Fabrikasi di PT. XYZ. Janos Fulop. 2006. Introduction to Decision Making Methods. Computer and Automation Institute, Hungarian Academy of Science. Lutfan F. 2006. Perilaku Organisasi Edisi 10. Yogyakarta: Penerbit Andi. Mentzer, JohnT.,William DeWitt, James S. Keebler, et al. 2001.“Defining Supply Chain Management.” Journal of BusinessLogistics,Vol. 22, No. 2. Meredith Jack. R dan Samuel J. Mantel. 2009. Project Management : A Managerial Approach (Seventh ed). GGS Book Service PMG. R Eko Indrajit dan R Djokopranoto. 2003. Konsep Manajemen Supply Chain: Cara Baru Memandang Mata Rantai Penyediaan Barang. Jakarta: Grasindo. Rodin, E. Y. 1989. Models and Methods in Multiple Criteria Decision Making. Universite de Liege, Bat. B31, 7 Boulevard du Rectorat, 4000 Liege, Belgium Saaty, Thomas L. 1990. Multicriteria Decision Making-The Analytical Hierarchy Process. Pittsburgh, USA: RWS Publications, 4922 Ellsworth Avenue, Pittsburgh. Saaty, Thomas L. 1996. Decision Making with Dependence and Feedback: The Analytic Network Process Pittsburgh, USA: RWS Publications, 4922 Ellsworth Avenue,Pittsburgh, Saaty, Thomas L. 2001. Decision Making with Dependence and Feedback: The Analytic Network Process (Second ed.). Pittsburgh, USA: RWS Publications, 4922 Ellsworth Avenue, Pittsburgh. W.C. Benton, Jr. Dan Linda F. McHenry. 2010. Construction Purchasing & Supply Chain Management. McGraw-Hill Companies. United States

Multi crteria decision making and its applications : a literature review

This paper presents current techniques used in Multi Criteria Decision Making (MCDM) and their applications. Two basic approaches for MCDM, namely Artificial Intelligence MCDM (AIMCDM) and Classical MCDM (CMCDM) are discussed and investigated. Recent articles from international journals related to MCDM are collected and analyzed to find which approach is more common than the other in MCDM. Also, which area these techniques are applied to. Those articles are appearing in journals for the year 2008 only. This paper provides evidence that currently, both AIMCDM and CMCDM are equally common in MCDM

Analysis of Green Computing Strategy in University: Analytic Network Process (ANP) Approach

Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis do not provide an analytical means to determine the importance of the identified factors of green computing strategy and implementation. Although the SWOT analysis successfully explores the factors, individual factors are usually described very generally. For this reason, SWOT analysis possesses deficiencies in the measurement and evaluation of green computing steps. Even though the analytic hierarchy process (AHP) technique eliminates these deficiencies, it does not allow for measuring the possible dependencies among the individual factors. The AHP method assumes that the green computing factors presented in the hierarchical structure are independent; however, this assumption may be inappropriate in light of certain situation. Therefore, it is important to utilize a form of SWOT analysis that calculates and takes into account the possible dependency among the factors. This paper demonstrates a process for quantitative SWOT analysis of green computing implementation that can be performed even when there is dependence among strategic factors. The proposed algorithm uses the analytic network process (ANP), which allows measurement of the dependency among the green computing implementation factors, as well as AHP, which is based on the independence between the factors. There are four alternatives: campus awareness program, computer procurement, increase in heat removal requirement, and increase in equipment power density for improving the implementation of green computing in campus. Dependency among the SWOT factors is observed to effect the strategic and sub-factor weights, as well as to change the strategy priorities. Based on ANC method, the best alternative for this implementation is computer procurement

Designing effective contracts within the buyer-seller context: a DEMATEL and ANP study

This study examines the factors that contribute to effective contract design within the context of buyer-seller relationship. Research streams on contract factors, supply chain factors, environmental factors, and competitive factors were reviewed to arrive at 18 contract factors. A hybrid model of Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Hierarchy Process (ANP) analysed empirical data collected from 17 experts to weight the importance of contract factors. It was found that most important factors are, in order of significance: policies, supplier technology, force majeure, formality, relationship learning, buyer power, legal actions, liquidated damages, supplier power and partnership

The Application of a Decision-making Approach Based on Fuzzy ANP and TOPSIS for Selecting a Strategic Supplier

Supplier selection becomes very important when used in the context of strategic partnerships because of the long-term orientation of the relationship. This paper describes the application of a decision-making approach for selecting a strategic partner (supplier). The approach starts with defining a set of criteria that fits the company's condition. In the next steps, a combination of fuzzy-ANP and TOPSIS methods is used to determine the weight for each criterion and rank all the alternatives. The application of the approach in an Indonesian manufacturing company showed that the three factors that got the highest weight were “geographical location”, “current operating performance”, and “reliability”. Geographical location got the highest weight because it affects many other factors such as reaction to changes in demand, after-sales service, and delivery lead-time. Application of the approach helps decision-makers to gain effectiveness and efficiency in the decision-making process because it facilitates them to express their group's collective preferences while also providing opportunities for members to express their individual preferences. Future research can be directed at combining qualitative and quantitative criteria to develop the best criteria and methods for the selection of the best suppliers based on fuzzy ANP and TOPSIS

An integrated model for green partner selection and supply chain construction

Stricter governmental regulations and rising public awareness of environmental issues are pressurising firms to make their supply chains greener. Partner selection is a critical activity in constructing a green supply chain because the environmental performance of the whole supply chain is significantly affected by all its constituents. The paper presents a model for green partner selection and supply chain construction by combining analytic network process (ANP) and multi-objective programming (MOP) methodologies. The model offers a new way of solving the green partner selection and supply chain construction problem both effectively and efficiently as it enables decision-makers to simultaneously minimize the negative environmental impact of the supply chain whilst maximizing its business performance. The paper also develops an additional decision-making tool in the form of the environmental difference, the business difference and the eco-efficiency ratio which quantify the trade-offs between environmental and business performance. The applicability and practicability of the model is demonstrated in an illustration of its use in the Chinese electrical appliance and equipment manufacturing industry