Analytical hierarchy process-based framework for VMI adoption

Abstract

In recent years, the collaborative supply-chain management techniques have been widely adopted in various enterprises, and vendor-managed inventory (VMI) practice is one of those adopted techniques. Also, the VMI adoption process differs from company to company and industry to industry. In order to adopt the VMI, a generic framework is needed to understand the various adoption issues. While adopting VMI, selecting and prioritising different adoption issues are important tasks, and owing to the fact that the analytical hierarchical process (AHP) is a structural technique for dealing with complex decisions, it provides a comprehensive and rational framework for structuring a decision problem, for representing and quantifying its elements, for relating those elements to overall goals, and for evaluating alternative solutions. The purpose of this paper is to present an AHP-based framework for the adoption of VMI practices. In this study, a group of academic and supply-chain managers were consulted for the purpose of identifying the important VMI adoption issues. The proposed framework provides quantification for subjective evaluations of adoption variables, and it may also serve as a benchmarking tool for supply-chain managers while making strategic decisions related to VMI. The developed framework shows adoption issues at different levels in the hierarchy and helps to prioritise the VMI adoption issues by making pairwise comparisons between them.