Supplier evaluation and selection for a manufacturing industry using analytical hierarchy process – a case study

Abstract

Supplier selection is one of the most critical activities of purchasing because of the key role of supplier’s performance on cost, quality, delivery and service. Depending on the purchasing situation, the criteria have varying importance and there is a need to weight criteria. Practically in supplier selection problems, most of the input information is not known precisely. An analytical way to reach the best decision is more preferable in many such business platforms. Analytical hierarchy process (AHP) is one of the best ways for deciding among the complex criteria in different levels. AHP converts the qualitative factors of suppliers into quantitative measure reliably. This paper suggests the use of AHP, one of the strong methods in multi-criteria decision making to evaluate and select the supplier using criteria such as quality, cost, delivery, service, technology, capacity, reliability, lead-time and responsiveness. Here 9 attributes, 27 sub-attributes and 7 alternatives are evaluated to select the best among them. Case study on supplier selection for a leading textile machinery manufacturing industry in South India is presented in this paper.