A Combined approach for supplier selection using AHP and Fuzzy AHP in Indian Gear Manufacturing MSMEs

Abstract

Industries these days across the world are required to be a part of single economy and work-culture. As a result, manufacturing industries are moving towards adding higher value activities and therefore even the requirements for suppliers in many cases undergo significant changes. By ensuring the best supplier, industries save material costs and increase their competitive advantage. Gear manufacturing companies are main suppliers for India’s leading manufacturing firms, as they outsource manufacturing of gears to Micro, Small and Medium Enterprises (MSMEs). Extant literature indicate that the Gear manufacturing companies follow traditional supply chain process and partially follows green supply chain as well as sustainability aspects. It is therefore important to understand the role, Gear manufacturing industries play in their supplier selection process. This study has explored the traditional and green manufacturing factors considered during the supplier selection in the Indian MSME Gear manufacturing sector, using tools such as AHP and FAHP. AHP is one of the best tools for deciding among the complex criteria structure at different levels. FAHP, being synthetic extension of classical AHP, considers the fuzziness of the decision makers. Results of this study indicate that, from amongst all 8 main traditional and green supply chain performance measures, cost is found to be the most important criteria for supplier selection even today in Indian industries. But, looking at the sub-factors, it is clear that the industries not only focus on purchase cost, but they also think of the disposal cost of the component, meaning they consider few aspects of green criteria as well in their decisions.