An integrated approach of ISM and fuzzy TOPSIS for supplier selection

Abstract

Supplier selection is one of the most important tasks that contribute to the success of supply chain management. Choosing the right supplier will bring many benefits to the enterprises, such as costs reduction, profit increase, flexibility and competitiveness improvement. This study is conducted to develop a methodology that provides suitable supplier selection solution. Firstly, a set of 23 criteria are used to analyse the relationships between criteria by using interpretive structural modelling (ISM). The less important criteria will be eliminated though the model. Next, the fuzzy TOPSIS method, which focus on the distance from alternatives to positive ideal solution and negative ideal solution is applied to evaluate and rank suppliers. The result of ISM suggests choosing 22 appropriate criteria among the original 23 criteria used for the supplier selection problem. The result of fuzzy TOPSIS shows the ranking of six suppliers through a case study of a plastic packaging company.