Application of fuzzy AHP for supplier development prioritization

Abstract

Supplier development (SD) has been identified as a critical strategy for manufacturing firms in managing and improving the capabilities of suppliers. However, implementing this program necessitates an investment of time, commitment, and finances. The selection of the most beneficial practices to be implemented in order for this program to succeed can ensure a better program output. Therefore, it is crucial for the manufacturing firm to identify which practices should be prioritized and implemented for their SD program. Although SD has been widely researched, the method to evaluate SD practices, particularly in the Malaysian manufacturing industry is virtually non-existent. This paper aims to fill the gap by proposing a method to evaluate the SD practices using the Fuzzy Analytic Hierarchy Process (Fuzzy AHP). Fuzzy AHP is used to rank the practices involved in the program by capturing the evaluation from experts with strong industrial backgrounds in Malaysian Industry. There are five criteria for SD practices: supplier certification (SC), green capability (GC), investment and resource transfer (IRT), feedback and evaluation (FE), and knowledge transfer (KT), with 30 alternatives identified. The findings of the Fuzzy AHP method, suggest that KT is given the most weight. Thus, the alternatives associated with KT must be prioritized to achieve the objectives of the SD program. The results obtained can be referred to by manufacturing practitioners as guidelines for seeking the opportunity to implement an SD program in enhancing the capabilities of suppliers.