Integrated FMEA Approach for Supplier Selection Problem: The Case on Steel Manufacturing Company

Abstract

Supplier selection is a very difficult task for a company. The company’s success largely depends on selecting an appropriate supplier. This process is a very complex, multi-person, group decision that can be improved by systematic and logical approaches to assess priorities based on the inputs of several people from different functional areas within the company. In this research work, authors have shown how Analytic Hierarchy Process (AHP) and Fuzzy Analytic Hierarchy Process (F-AHP) can be effectively used with Failure Mode and Effects Analysis (FMEA) approach for selecting the best supplier in supply chain risk environment. AHP and F-AHP is used to determine the relative weight of every criterion and FMEA is used to calculate the risk priority number (RPN) of every criterion and sub-criterion related to the supplier selection problem.