Use of a modified analytic hierarchy process in selecting push, pull or hybrid systems for material control

Abstract

Many organisations keep thousands of items in their warehouses, which at times may be in excess of 50% of all the company's expenses. Each item typically possesses its own unique characteristics, since it will typically have been sourced from different suppliers. Under these circumstances, it may not be rational or economical to deal with each item via a generic material control system (either push or pull system). This paper presents a multi-criteria approach that utilises the Analytic Hierarchy Process (AHP). The paper proposes a modified AHP, such that it is able to classify the materials and components for different Material Planning and Control Systems (MPCS), i.e. Kanban, MRP, hybrid, and Re-Order Point (ROP) Systems. This modified AHP is better at rising to the challenge of diversity of material characteristics in deriving an optimal decision for MPCS system selection.