A Multi-Criteria Decision-Making (MCDM) Approach Using Hybrid SCOR Metrics, AHP, and TOPSIS for Supplier Evaluation and Selection in the Gas and Oil Industry

Chia-Nan Wang,Ying-Fang Huang,Van Nguyen,I-Fang Cheng

doi:10.3390/pr6120252

Abstract

Suppliers are extremely important in business operations. The supplier ensures the supply of materials, raw materials, commodities, etc. in sufficient quantity, quality, stability, and accuracy to meet the requirements of production and business with low costs and on-time deliveries. Therefore, selecting and managing good suppliers is a prerequisite for organizing the production of quality products as desired, according to the schedule, and with reasonable prices and competitiveness in the market. It is also important to gain the support of suppliers in order to continue to improve and achieve more as a business. The evaluation and selection of a supplier is a Multi-Criteria Decision-Making (MCDM) issue, in which the decision-maker is faced with both qualitative and quantitative factors. In this research, the authors propose an MCDM model using a hybrid of Supply Chain Operations Reference metrics (SCOR metrics), the Analytic Hierarchy Process (AHP) model, and the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) approach for supplier evaluation and selection in the gas and oil industry. Using literature reviews on SCOR metrics, all criteria that impact supplier selection are defined in the first stage, the AHP model is applied to determine the weight of each factor in the second stage, and the optimal supplier is presented in final stage using the TOPSIS model. As a result, Decision-Making Unit 5 (DMU-05) is found to be the best supplier for the gas and oil industry in this research. The contribution of this work is to propose a new hybrid MCDM model for supplier selection in the gas and oil industry. This research also introduces a useful tool for supplier selection in other industries.

Highlights

Gas and oil are important to many industries as well as the industrialization of civilization in general, and this is a concern for some countries
According to literature reviews on Supply Chain Operations Reference (SCOR) metrics, all criteria that influence the supplier selection are defined in the first stage, the Analytic Hierarchy Process (AHP) model is applied to determine the weight of each factor in the second stage, and the optimal supplier is presented by the TOPSIS model based on the positive ideal solution (PIS) [4] and the longest geometric distance from the negative ideal solution (NIS) [4] in the final stage
As shown in the literature review, the Multi-Criteria Decision-Making (MCDM) model has been applied to various fields of science and engineering, and its use has been increasing for many years

Summary

Introduction

Gas and oil are important to many industries as well as the industrialization of civilization in general, and this is a concern for some countries. Other regions that consume a large amount of oil energy are: South and Central America (44%), Africa (41%), and North America (40%). The increasing gas and oil output and issues of Processes 2018, 6, 252; doi:10.3390/pr6120252 www.mdpi.com/journal/processes. Under the pressure of the global gas and oil market, the importance of oil and gas supply chain management is evident both at the industrial and scientific levels. For the selection process of sustainable gas and oil suppliers, there are many factors that need to be considered in the assessment process. A sustainable supplier selection process can be considered as a Multi-Criteria Decision-Making (MCDM)

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