Supplier Selection Procedure Research Articles

Strategic supplier selection and order allocation for sustainable development of small and medium-sized enterprises: insights from a case study

Purpose Efforts to implement supplier selection and order allocation (SSOA) approaches in small and medium-sized enterprises (SMEs) are quite restricted due to the lack of affordable and simple-to-use strategies. Although there is a huge amount of literature on SSOA techniques, very few studies have attempted to address the issues faced by SMEs and develop strategies from their point of view. The purpose of this study is to provide an effective, practical, and time-tested integrated SSOA framework for evaluating the performance of suppliers and allocating orders to them that can improve the efficiency and competitiveness of SMEs. Design/methodology/approach This study was conducted in two stages. First, an integrated supplier selection approach was designed, which consists of the analytic hierarchy process and newly developed measurement alternatives and ranking using compromise solution to evaluate supplier performance and rank them. Second, the Wagner-Whitin algorithm is used to determine optimal order quantities and optimize inventory carrying and ordering costs. The joint impact of quantity discounts is also evaluated at the end. Findings Insights derived from the case study proved that the proposed approach is capable of assisting purchase managers in the SSOA decision-making process. In addition, this case study resulted in 10.89% total cost savings and fewer stock-out situations. Research limitations/implications Criteria selected in this study are based on the advice of the managers in the selected manufacturing organizations. So the methods applied are limited to manufacturing SMEs. There were some aspects of the supplier selection process that this study could not explore. The development of an effective, reliable supplier selection procedure is a continuous process and it is indeed certainly possible that there are other aspects of supplier selection that are more crucial but are not considered in the proposed approach. Practical implications Purchase managers working in SMEs will be the primary beneficiaries of the developed approach. The suggested integrated approach can make a strategic difference in the working of SMEs. Originality/value A practical SSOA framework is developed for professionals working in SMEs. This approach will help SMEs to manage their operations effectively.

Supplier Selection in Downstream Oil and Gas and Petrochemicals with the Fuzzy BWM and Gray COCOSO Methods Considering Sustainability Criteria and Uncertainty Conditions

A project always needs the participation of suppliers to provide the goods and services needed by the project. As the size of the project increases, the need to use suppliers also increases. Choosing the appropriate suppliers for the project is always a difficult task, and considering different criteria along with the existence of multiple alternatives always increases the difficulty and complexity of the supplier selection problem. This study deals with the supplier selection problem, which is one of the important issues in projects and organizations in the downstream field of oil, gas, and petrochemicals. The purpose of this paper was to investigate and improve the supplier selection procedure in this field by considering real-world uncertain conditions. To this end, the fuzzy set theory and gray numbers were taken into account. In the present study, the criteria were first determined by expert judgment; then, the fuzzy best–worst method (FBWM) was exploited to rank the criteria; finally, the suppliers were prioritized and ranked by using the gray COCOSO method The results showed that the highest and the lowest weights were obtained for the “price” and “attention to environmental issues” criteria, respectively. Also, the selected supplier was a supplier with a high score in all criteria. One of the practical benefits of this research is to provide a solution to speed up, facilitate, and improve the process of selecting suppliers for companies in the downstream field of oil, gas, and petrochemicals.

Analysing the efficiency of public procurement procedures using game-theory models

Subject. Public procurement plays an important role in providing public services and ensuring that the target programmes of government structures are implemented. Therefore, it is crucial to improve the efficiency of procurement procedures. The efficiency of public procurement is largely determined by the conditions and format of the procurement procedure. So, it is of particular interest to identify the factors influencing the customer’s choice of the optimal procedure for the procurement of different types of goods, as well as to assess the impact of these factors on the effectiveness of existing procedures.Objectives. The aim of the study was to develop a model for selecting procurement procedures for different types of goods and to assess the effectiveness of current public procurement procedures.Methodology. In the study, we used the findings of auction theory, qualitative and quantitative analysis techniques to identify public procurement, determine its value to participants, and assess its effectiveness. The following goods were selected for empirical assessment: paper, medicines, automotive components, and construction services. The empirical basis of the study was the data obtained from the Unified Information System (UIS) in Procurement website.Results. We developed and estimated a model for choosing a supplier selection procedure (for empirical assessment, the probability of choosing a certain procedure was determined by the number of uses of the procedures among completed procurement procedures). We also designed and estimated a model of price effectiveness for public procurement procedures that are actually in use (price effectiveness in this study means the final price of the contract, as well as the reduction of the final price against the initial maximum price).Conclusions. Based on the analysis, we concluded that it is necessary to introduce negotiations as an intermediate procedure between the auction and procurement from a single supplier. Such a procedure is used in other countries. The auction procedure fails to provide the best quality goods, especially in the case of complex goods or services with a high level of uncertainty. For simple goods, an auction is the most favoured procedure under the conditions of high competition and a preference for quality. It allows selecting the most experienced and financially reliable supplier.

A rankability-based fuzzy decision making procedure for oil supplier selection

Multiple-criteria decision-making (MCDM) explicitly assesses several conflicting criteria for our daily lives in selecting products, vehicles, techniques, etc. Weighting on criteria is a critical step in MCDM as the invalid weight of criteria will lead to a wrong decision. The proposed method addresses some drawbacks of the entropy-based weighting method commonly used in MCDM. The proposed new weighting method considers multiple evaluation factors, including the performance of the decision-maker, the edge weight basis of a digraph, and dominance relationships in the data. By incorporating these factors, the proposed method overcomes the limitations of the entropy-based method and reduces the total computation required. We conducted experiments using sustainable transportation data and comprehensively analyzed the results. We also propose a fuzzy MCDM model incorporating the proposed weighting method and Dempster–Shafer theory. Our model aims to handle uncertainty and imprecision in decision-making. Finally, the correctness and effectiveness of the proposed model were tested on real-life applications. The results of these tests demonstrated that the proposed method provides a practical and effective approach to decision-making in various domains. Overall, the work introduces a new weighting method based on rankability in MCDM, addresses the limitations of the entropy-based method, and presents a fuzzy MCDM model for handling uncertainty. The experimental results suggest that the proposed approach is promising and offers valuable insights for decision-makers.

An Integrated ANP and MARCOS for Green Supplier Selection: A Case Study on Contruction Industry

Raw material suppliers are important in production, especially in the construction industry. It is because suppliers determine the availability of raw materials in a project. The research aims to propose a new integrated procedure for Green Supplier Selection in the Construction Industry. The proposed integration method is Analytical Network Process (ANP) and Measurement Alternatives and Ranking according to Compromise Solution (MARCOS) method. Both methods are Multi-Criteria Decision Making (MCDM) procedures. The ANP method is used to determine the weight of each criterion, and the MARCOS method is used to determine the weight of the best supplier. Seventeen criteria are used in supplier selection involving economic and environmental dimensions. The results showed that based on the ANP method, the most important criterion was the consistent quality of goods. Meanwhile, three suppliers were analyzed for selection based on the MARCOS procedure. The results show that the best supplier is supplier X with a utility function value of 0.749. These results show that the proposed procedure (integration of ANP and MARCOS) effectively solves Green Supplier Selection.

Effects of Procurement Regulatory Practices on Performance of Supply Chain Department in Machakos County, Kenya

Machakos government ministries are characterized by increasing expenses, delayed service delivery, delays in the procurement of products, works, and services, low-quality items, corruption, and waste in the supply chain management process. During the 2014/2015 financial year, several Ministries, Departments, and Commissions with funding incurred spending of Ksh 435, 690, 489, of which the value for money could not be determined, resulting in wastages. The majority of the waste happened during the procurement process, according to the Auditor General's Report for the fiscal year 2014/2015. The overall goal of this research was to determine the effect of regulatory procurement procedures on the performance of the supply chain department in Machakos County. The specific objectives were: to determine the effect tendering process, procurement planning, supplier selection procedure, and professionalism on procurement performance in Machakos County. The legitimacy theory, agency theory, Institutional Theory, and transaction cost theory are the major theories underlying this study. A descriptive research-based study was used. This study was conducted in Machakos County. The study's target population comprised 40 administrators from various divisions, 30 directors, and 18 chief county officers, all of whom were recruited from inside the county. Primary data from the respondents was collected via the use of questionnaires in this research. Descriptive statistics were used to analyze quantitative data, which were then displayed in the form of graphs, tables, and charts. The mean, mode, and standard deviation were used to calculate the descriptive statistics. The content analysis method was used to examine qualitative information. Also, the SPSS Software version 24 was used for data analysis. The association between the independent and dependent variables was determined using multiple regression analysis. According to the study results, the tendering process was aided and supported by the Standard Tender Documents from the Public Procurement Officers Association (PPOA). The finding further gathered that proper procurement planning contributes to the success of service delivery. The results also indicated that corruption influences suppliers' selection procedure and management of suppliers. The respondents indicated that the absence of ongoing professional training in the procurement function has a negative impact on procurement performance. According to the study's summary, the researchers came to the conclusion that there was a positive and statistically significant association between tendering processes and the supply chain department in Machakos County. In order to guarantee effective use of the available assets and capacity, the study advises that the County administration, in collaboration with the national government, should work together to ensure proper utilization of the available assets and capacity in the county. As a result, the report recommends that more research be conducted in order to determine the sources of 48.4 percent of the county's financial performance.

SUPPLIER SELECTION FOR IMPROVING SUPPLY CHAIN PERFORMANCE

Supplier selection played a role in developing industry performance. It was one of the critical issues in supply chain management. This study illustrated applying a decision-making procedure for supplier selection on KUD Dau Batu by ANP and fuzzy TOPSIS. Four suppliers (Princi, Gading Kulon, Petung Sewu, and Kucur) thought qualified for procuring milk. The first step determined the weight of criteria and sub-criteria that impacted strategic supplier selection by ANP. This approach in a KUD Dau Batu showed that cost was the top priority. The next step was to defuzzification of criteria and ranking the four suppliers by fuzzy TOPSIS. The supplier from Kucur was the best milk supplier compared to other supplier.

Evaluation of food safety and halal criteria in supplier selection: an application in food sector with fuzzy COPRAS method

Supplier selection is among the crucial processes for any food industry operation. An incorrect choice when selecting a supplier will pose significant hazards in terms of food safety, and can cause substantial harm to virtually any operation of the enterprise. However, the number of studies focusing on this issue is rather limited, and the supplier selection procedure to serve as a source of reference for food producers has not been developed yet. The present work thus aimed to facilitate the use of food safety and halal criteria in supplier selection processes, and to help food producers in making choices by using the COPRAS-F method. The present work was carried out at an enterprise engaged in dairy products, analysed the processes involving four suppliers providing polyethylene terephthalate (PET) packaging, and evaluated 12 criteria to guide the choice of supplier. The present work is one of the first attempts for supplier selection in food industry based on the COPRAS-F method. Results suggested that the COPRAS-F method could offer a practical method for not just supplier selection processes, but any multi-criteria decision-making problem a company might face.

Unpacking the role of primary packaging material in designing green supply chains: An integrated approach

Due to the adverse impact of packaging materials on several ecosystems, the circular and sustainable approaches to manage packaging waste have been receiving increasing attention worldwide. Plastic pails are widely used primary packaging materials that are cost-effective, lightweight, yet long-lasting. In the present study, we propose a closed-loop supply chain (CLSC) network design model to jointly optimize the decisions related to the location of collection, sorting, and recycling centers, and the quantity of plastic pales to be recycled and/or freshly produced and distributed. The proposed model is augmented with an incentive mechanism to acquire used plastic pails from customers as well as a green supplier selection procedure. In addition to the traditional objective of profit maximization, the proposed model also minimizes carbon emission, maximizes the return of used plastic pails, and prioritize suppliers for the procurement of sustainable packaging raw materials. A set of non-dominated solutions to the proposed multi-objective model are obtained using the Augmented ε-constraint method (AUGMECON). The results of AUGMECON are also compared with other methods such as weighted sum method and Augmented Tchebycheff method. It is oberseved that AUGMECON produces diverse set of pareto-optimal solutions for the considered problem. The applicability of the model is explained using an illustrative example of an adhesive manufacturer in India. Further, several managerial insights are drawn by carrying out sensitivity analysis through scenario building.

Efficiency Evaluation of Supply Chain Network Using a Framework Based on DEA and Seller-Buyer Structure

This paper aims to develop a DEA-based framework to evaluate the efficiency of the supply chain based on the seller–buyer structure and with respect to win–win strategy. This is a bi-stage model employing the CCR model in the forms of input-oriented and output-oriented considering the intermediate measures for two different conditions under a centralized point of view. The obtained results from the extension of this model to supply chain network lead to introduce “efficient path” concept being a path including different components of the supply chain that are efficient in terms of DEA. Other kinds of proper information provided by the proposed model can help the managers and decision-makers of the supply chain field in supplier selection procedure and making efficient portfolios and collaborations across the supply chain network.

A novel IFCM integrated distance based hierarchical intuitionistic decision making procedure for agile supplier selection

A novel IFCM integrated distance based hierarchical intuitionistic decision making procedure for agile supplier selection

Developing a novel Grey integrated multi-criteria approach for enhancing the supplier selection procedure: A real-world case of Textile Company

Developing a novel Grey integrated multi-criteria approach for enhancing the supplier selection procedure: A real-world case of Textile Company

The Supplier Selection Process in Regional Terms – Case Study Analysis

The article presents the supplier selection procedure, which is one of the key elements of the whole procurement process, carried out in each business entity. Particular attention was paid to the regional aspect of the issue. It has also been presumed that in the case study, only local suppliers will be taken into account. Such assumption (including close distance between potential supplier and a company) fosters e.g. reduction of costs and delivery time, enhances all supply chain and enables implementation of modern management concepts. In times of strong competition, all these aspects have become particularly important. In the phase of computational experiments, which aimed at ranking and selection of the most desired supplier in the case study, multiple criteria ranking methods - Electre III/IV and Promethee II have been applied.

An efficient subset selection method for supplier selection under multiple quality characteristics

Supplier selection is a strategic decision for production management. Evaluating the performance of suppliers and selecting the one with the highest quality are important tasks. An electronic component is required to meet specifications in practical applications. Generally, the supplier selection procedure must evaluate the overall yield with respect to multiple quality characteristics. A subset selection method is proposed to identify the supplier with the highest overall yield under multiple quality characteristics. The confidence interval of each difference from the unknown best supplier is provided in terms of the overall yield index. In the demonstration, the subset selection method effectively selected the best pre-amplifier supplier for a manufacturer producing microelectromechanical systems (MEMS) sensors. Pre-amplifier gain, absolute reference voltage and module quiescent current were simultaneously evaluated for supplier selection.

An alternative fuzzy evaluation framework for supplier selection

Organisations need for an effective supplier selection system towards attaining the competition advantages in the market. In this paper, we propose an alternative supplier selection framework integrated by fuzzy c-means, belief-based quality function deployment, fuzzy weighted average, and a proposed fuzzy decision measure. This framework consists of three phases. In the first phase, we present the potential assessments for a supplier selection and their uncertainty descriptions. We divide supplier assessments into two parts: 1) expert assessments using combined belief-based quality function deployment and fuzzy weighted average; 2) system assessments comprised of a multi input-single output system. In the second phase, we analyse uncertainties of both expert and current systems using the well-known fuzzy c-means. In the third phase, we propose a fuzzy decision measure to complete the supplier selection procedure with finding the most appropriate supplier. We apply this framework to supplier selection process of a Turkish Machinery Corporation.

Group Supplier Selection for Multiple-Line Gold Bumping Processes

Portable devices have been popularly used nowadays. Liquid crystal display driver integrated circuit is an essential component in portable devices in which gold bumping process is a critical interconnection technology. To enhance bargaining power and to reduce cost, group suppliers are commonly selected from multiple suppliers. For high-definition display devices, a very low fraction of defectives is the basic quality requirement in gold bumping processes. Unfortunately, conventional yield measurement methods for supplier selection no longer work since any sample of reasonable size probably contains no defective gold bump product items. In this paper, we propose a group supplier selection procedure for multiple suppliers with multiple-line processes that are quite common due to high demands in semiconductor industry. For various significance levels, the number of suppliers, the number of manufacturing lines, predetermined capability requirements, and sample sizes, different selected suppliers are suggested based on the multiple-line yield index $C_{pk}^{M}$ . In addition, the power comparisons between different methods are also discussed. For the illustration purpose, real-world applications in a gold bumping factory that is located in the Science-Based Industrial Park in Hsinchu, Taiwan, are included.

Supplier/partner selection in agile supply chain

Purpose – The concept of agile supply chain (ASC) has become increasingly important as means of achieving a competitive edge in turbulent business environments. An ASC is a dynamic alliance of member enterprises, the adaptation of which is likely to introduce velocity, responsiveness and flexibility into the manufacturing system. In ASC management, supplier/partner selection is a key strategic concern; influenced by various agility-related criteria/attributes. Therefore, evaluation and selection of potential supplier in an ASC has become an important multi-criteria decision-making problem. The purpose of this paper is to report, a supplier selection procedure (module) in the context of ASC. Design/methodology/approach – During supplier selection, subjectivity of evaluation information (human judgment) often creates conflict and bears some kind of uncertainty. To overcome this, the present work attempts to explore vague set theory to deal with uncertainties in the supplier selection decision-making process. Since, vague sets can provide more accurate information as compared to fuzzy sets. It considers true membership function as well as false membership function which give more superior results for uncertain information. In this procedure, first, linguistic variables have been used to assess appropriateness rating (performance extent) as well as priority weights for individual quantitative or qualitative criterions. Second, the concept of degree of similarity and probability of vague sets has been used to determine appropriate ranking order of the potential supplier alternatives. Findings – A case empirical example has been provided. It has been proved that the methodology would be fruitful in considering different evaluation criterion (indices); may be contradicting in nature like beneficial and cost criterions. The application of vague set theory has also been proved as a better option to work under uncertain (fuzzy) decision-making environment in comparison to fuzzy set theory. Originality/value – The application of vague set theory in multi-criteria group decision making has been reported in literature to a limited extent. Application of vague set as a decision-making tool in agile supplier selection appears relative new and unexplored work area. The work has got remarkable managerial implications.

Supplier Selection Procedure in Telecommunication Industry

Managing supply chain is important for every organization because it has become a major element in a global economy. The supply chain is a primary system that moves the products or services from supplier to customer. Poor performance in delivering the services will essentially affect customer satisfaction. Previous studies have shown the effects of supplier selection on the organization performance in the services or products delivery. This research focuses on civil infrastructure and pulling cable suppliers in one of the telecommunication players in Malaysia and also on its supplier selection procedure, which is known as Price Rate Table (PRT). This paper initially reviewed the concepts of PRT pool and PRT zoning. We then assessed the level of staff satisfaction on PRT and also its advantages and disadvantages in terms of project performance. This assessment was conducted qualitatively via semi structured interview to a specific project team in the organization. Results showed that for small projects the PRT concept has offered more advantages than disadvantages in terms of project performance. On the other hand, the disadvantages are emphasized more for mega and urgent projects. In this paper, we proposed two selection processes to overcome the issues and also evaluated the processes using strategy canvas. Only the best selection process upon the highest accumulated point obtained is recommended to be adopted in the current organization.

Selecting a supplier portfolio with value, development, and risk consideration

This paper introduces a novel two-phase supplier selection procedure. Unlike most supplier selection researches, which are decisive based on supplier eligibility at the time of the decision making, the proposed method is based on the long term trend of value, stability, and relationship of potential suppliers. In the first phase, suppliers are evaluated and assigned a comparable value based on a set of criteria. This value is then analyzed in the long run, and fed into a multi-objective portfolio optimization model in the second phase. The model determines a supplier portfolio by maximizing the expected value and development of suppliers, and minimizing their correlated risk. The novelty of this procedure is introducing a new view toward the supplier selection problem. Numerical tests show that the proposed approach selects higher value suppliers with lower risk of failure, compared to available methods.

Design of Supplier Selection Procedure in Garment Company

The purchase of raw materials is very influential for the quality of products produced in addition to the process of making the product itself. Therefore, how to choose the supplier from the available alternatives is something that must be done properly in the process of procurement of raw materials especially for companies with many product variations and associated with many suppliers. This paper discusses about how to make supplier selection procedure for garment company with a case on a medium scale garment company in Bandung that manufactures veil and Moslem fashion. Mapping of business processes using IDEF0 was the first step in designing of supplier selection procedure. Then performed an analysis of the process which is usually done to identify the weaknesses and strengths of the process. The next step is create a design of supplier selection procedure that is more structured and measurable. In addition, also designed a tool that can be used in the supplier selection process, which is a simple application to determine the ranking of suppliers who will be selected based on the criteria specified. The application is based on the decision-making process with The Analytical Hierarchy Process approach that has been commonly used as a tool for decision-making with many alternative choices. In general, the resulting procedure would be beneficial for the company as a guide for those involved in the procurement process at the purchasing department, primarily for decision making in supplier selection.