Multi‐criteria supplier selection using fuzzy AHP

Optimal selection of third-party logistics service providers using quality function deployment and Taguchi loss function

Purpose

– Selection of logistics service provider (LSP) (also known as Third-party logistics (3PL) is a critical decision, because logistics affects top and bottom line as well. Companies consider logistics as a cost driver and at the time of LSP selection decision, many important decision criteria’s are left out. 3PL selection is multi-criteria decision-making process. The purpose of this paper is to develop an integrated approach, combining quality function deployment (QFD), and Taguchi loss function (TLF) to select optimal 3PL.

Design/methodology/approach

– Multiple criteria are derived from the company requirements using house of quality. The 3PL service attributes are developed using QFD and the relative importance of the attributes are assessed. TLFs are used to measure performance of each 3PL on each decision variable. Composite weighted loss scores are used to rank 3PLs.

Findings

– QFD is a better tool which connects attributes used in a decision problem to decision maker’s requirements. In total, 15 criteria were used and TLF provides performance on these criteria.

Practical implications

– The proposed model provides a methodology to make informed decision related to 3PL selection. The proposed model may be converted into decision support system.

Originality/value

– Proposed approach in this paper is a novel approach that connects the 3PL selection problem to practice in terms of identifying criteria’s and provides a single numerical value in terms of Taghui loss.

Multi-criteria decision making for supplier selection using fuzzy AHP approach

Purpose

– The purpose of this paper is to propose a multi-criteria supplier selection model using fuzzy analytical hierarchy process (FAHP) approach for a leading automobile company in India.

Design/methodology/approach

– FAHP approach followed by a sensitivity analysis has been used.

Findings

– In this study, a FAHP-based supplier selection model is proposed to provide useful insights in choosing appropriate suppliers in dynamic situations in order to enhance long-term relationship with them.

Practical implications

– This study proposes a supplier selection model for an automobile industry which often faces heterogeneous supply environments. This model may have a high acceptability where a large number of suppliers are available to supply the materials or provide the services. As analytic hierarchy process is the most widely used methodology for supplier selection, however, it becomes less efficient in case of inconsistencies observed in the data. However a FAHP-based approach may overcome this difficulty.

Originality/value

– It contributes to supplier selection process and points out the importance of supplier selection problem, especially in the context of multi-criteria decision-making in Indian scenario.

S, Satpathy B. Evaluation of retail service quality – a fuzzy AHP approach

Purpose

– With the growing importance of service quality in Indian retail, it becomes critical for the retailers to identify the appropriate dimensions for their retail stores. In the process of evaluating service quality the decision maker is often faced with ambiguities due to the imprecise information gained from the respondents. The purpose of this paper is to present an integrated fuzzy (fuzzy analytic hierarchy process (FAHP) approach to help the decision makers/retailers in practicing and judging the priorities of service quality strategies and accordingly benchmarking retail stores in Indian retail environment.

Design/methodology/approach

– The study incorporated the five basic dimensions of Retail Service Quality Scale proposed by Dabholkar et al. (1996) and the FAHP approach to three leading apparel retail stores of a major city (Rourkela) of Orissa (an Indian state located in eastern part of the country) to determine the weights of criteria and sub-criteria of retail service quality.

Findings

– The study identified that the dimensions, namely, personal interaction, physical aspects, reliability and policy are perceived as important by the Indian consumers. Merchandise and the store’s willingness to handle returns and exchanges emerge as the most influencing variable affecting the overall service quality of the store.

Research limitations/implications

– The study was restricted to a major city of Orissa and to three apparel stores. The results obtained may not be extrapolated to the country as a whole. The authors believe that the integrated approach of FAHP could be used by a variety of service industries to evaluate the service quality. The study did not investigate switching behavior among the respondents as they had been visiting all the three apparel stores during the preceding months.

Practical implications

– The integrated approach of FAHP makes an empirical contribution to the service quality and retail marketing literature by overcoming the uncertainty of concepts those are associated with human beings’ subjective judgments.

Social implications

– The retailer can improve the quality of service provided by them based on the parameters important in Indian context, which will lead to higher customer satisfaction.

Originality/value

– This paper can help the retail service providers to identify which of the retail service quality dimensions requires much attention to create sustainable competitive advantage.

Analyzing drivers and barriers of coordination in humanitarian supply chain management under fuzzy environment

Purpose

– The purpose of this paper is to explore the barriers to coordination in humanitarian supply chain management (HSCM), proposes solutions and prioritizes them to overcome the barriers particularly in the Indian context.

Design/methodology/approach

– This study adopts a comprehensive and rigorous procedure to explore the barriers and solutions to coordination in HSCM. The research design is divided into three phases; first, the barriers and solutions are collected through an extensive literature review; second, barriers and solutions were verified with experts involved in relief operations of the disaster that occurred in Uttarakhand (a Northern state in India) on June 14, 2013 and finally, based on the weight of barriers estimated by fuzzy analytic hierarchy process, solutions to overcome the barriers are prioritized using fuzzy technique for order performance by similarity to ideal solution that considers uncertainty and impreciseness rather than a crisp value.

Findings

– This study explored 23 barriers to coordination in HSCM and grouped into five categories i.e., strategic barriers, individual barriers, organizational barriers, technological barriers and cultural barriers, and finally 15 solutions were proposed and prioritized to overcome the barriers so decision makers can focus on overcoming these barriers and realize the benefits of coordination in HSCM.

Practical implications

– This study provides a more efficient, effective, robust and systematic way to overcome barriers to coordination and improve the competencies of humanitarian supply chain (HSC).

Originality/value

– This is the first kind of study that prioritizes the solutions to enhance coordination in HSC based on the weight of the barriers.

Procurement of a supply information system

Purpose

– Given the high importance of information systems for procurement, surprisingly there have been little efforts to analyze the process and the relevant reasons for the procurement decision of such systems from a stakeholder perspective. The purpose of this paper is to explore these aspects in the context of low-value (C-)parts.

Design/methodology/approach

– Research is based on a case study in a pre-fabricator company in Germany and analyzes the process to procure a system for sourcing low-value parts.

Findings

– As a finding, the procurement process and decision attributes have been integrated into a framework which supports corporate decision-making considering the procurement reasons of all involved stakeholders (internal departments, external customers and suppliers).

Research limitations/implications

– Research is based on case study analysis. Findings are specific to case companies and the environment in which they operate. The framework should be tested further in different contexts.

Practical implications

– The developed decision frame supports the evaluation of different sourcing information systems, including clearly measurable criteria but also qualitative or company-strategic decision attributes.

Originality/value

– The combination of financial and other perspectives (operations, information technology (IT)-administration, system users, etc.), is used to evolve a robust ex-ante instrument for supporting buying decisions for procurement information systems. The case description also illustrates the findings and develops new insights about stakeholders and buying groups decision-making for information systems.

Towards a framework for enhancing procurement and supply chain management practice in the NHS: lessons for managers and clinicians from a synthesis of the theoretical and empirical literature

Background

This review provides intelligence to NHS managers and clinicians involved in commissioning and procurement of non-pay goods and services. It does this in the light of ongoing pressure for the NHS to save money through a combination of cost cutting, productivity improvements and innovation in service delivery, and in the context of new commissioning structures developing as a result of the Health and Social Care Act 2012 (Great Britain.Health and Social Care Act 2012. Chapter 7. London: The Stationery Office; 2012).

Objectives

We explore the main strands of the literature about procurement and supply chain management (P&SCM); consider the extent to which existing evidence on the experiences of NHS managers and clinicians involved in commissioning and procurement matches these theories; assess how the empirical evidence about different P&SCM practices and techniques in different countries and sectors might contribute to better commissioning and procurement; and map and evaluate different approaches to improving P&SCM practice.

Review method

We use a realist review method, which emphasises the contingent nature of evidence and addresses questions about what works in which settings, for whom, in what circumstances and why. Adopting realist review principles, the research questions and emerging findings were sense-checked and refined with an advisory group of 16 people. An initial key term search was conducted in October 2013 across relevant electronic bibliographic databases. To ensure quality, the bulk of the search focused on peer-reviewed journals, though this criterion was relaxed where appropriate to capture NHS-related evidence. After a number of stages of sifting, quality checking and updating, 879 texts were identified for full review.

Results

Four literatures were identified: organisational buying behaviour; economics of contracting; networks and interorganisational relationships; and integrated supply chain management (SCM). Theories were clustered by their primary explanatory focus on a particular phase in the P&SCM process. Evidence on NHS commissioning and procurement practice was found in terms of each of these phases, although there were also knowledge gaps relating to decision-making roles, processes and criteria at work in commissioning organisations; the impact of power on collaborative interorganisational relationships over time; and the scope to apply integrated SCM thinking and techniques to supply chains delivering physical goods to the NHS. Evidence on P&SCM practices and techniques beyond the NHS was found to be highly fragmented and at times contradictory but, overall, demonstrated that matching management practice appropriately with context is crucial.

Conclusions

We found that the P&SCM process involves multiple contexts, phases and actors. There are also a wide variety of practices that can be used in each phase of the P&SCM process. Thinking about how practice might be improved in the NHS requires an approach that enables the simplification of the complex interplay of factors in the P&SCM process. Portfolio-based approaches, which provide a contingent approach to considering these factors, are recommended. Future work should focus on conflicting preferences in NHS commissioning and procurement and the role of power and politics in conflict resolution; the impact of power on the scope for collaboration in health-care networks; and the scope to apply integrated SCM practices in NHS procurement organisations.

Funding

The National Institute for Health Research Health Services and Delivery Research programme.

An application of hybrid data envelopment analytical hierarchy process approach for supplier selection

Purpose

– The problem of supplier selection gets complicated when a company looks for various criteria to evaluate different suppliers. The decision criteria used for supplier selection process can be different for different organizations due to a large number of factors. Hence, it can be said that supplier selection is basically, a multiple criteria decision-making (MCDM) problem. The purpose of this paper is to propose a hybrid data envelopment analytical hierarchy process (DEAHP) approach to solve the supplier selection problem for an automobile company.

Design/methodology/approach

– In this study, the data envelopment analysis (DEA) approach is embedded into analytic hierarchy process (AHP) methodology. Literature review suggested that majority of researches found it appropriate using DEA and AHP methodologies for supplier selection process; hence it is felt that a hybrid DEAHP would be a useful methodology to offer a MCDM model for supplier selection problem.

Findings

– First, the key criteria of the supplier selection problem for the company are identified. Then a model is developed and implemented for supplier selection using DEAHP approach. This study concluded that quality, cost and service are the most crucial criteria for an automobile company operational in a developing country like India. Sensitivity analysis further helped to evaluate suppliers based on each criterion.

Research limitations/implications

– As this analysis and findings are based on only one case study of an Indian automobile company, and this necessitates caution in interpreting the results. The limited number of interviewed managers in a company restricts the generalizability of the results. Though the company selected for this study is typical of developing country businesses, the findings of the paper may not be readily extensible to other companies. Second, this study used retrospective settings, based on the interviewed feedback after the events had occurred. This method naturally poses limitations due to respondent recall and the accuracy of information provided. Third, the problem chosen for this study is based in a single country context and further additional research will be required to examine if the findings could be extended to other automobile companies in other developing nations. Also in some cases technique used in the study may pose some extra computational efforts.

Practical implications

– This study points out the importance of the supplier selection problem. It provides key criteria for supplier selection in Indian context also proposes a framework to deal with multiple criteria. proposed model deals with two crucial criteria long term relationships and flexibility which were relatively less discussed and considered in the literature in past.

Originality/value

– The proposed MCDM model can provide the guidelines and directions for the decision makers to effectively choose suppliers in the current competitive environment.

Bidder Selection in Public Procurement using a Fuzzy Decision Support System

Bidder selection in public procurement is a decision making problem whose primary purpose is to achieve the cost effectiveness and efficiency in the expenditure of public money. This principle is also known as the principle of “value for money”. This selection is based on many alternatives and many quantitative and qualitative criteria where qualitative criteria are often expressed as linguistic uncertain variables. The theory of fuzzy sets is a tool suitable to model uncertainty when applied to a variety of problems in real life. However, many fuzzy methods require complex calculation and they are not appropriate for using in public procurement because they slow down this process. In this paper, in order to make a quick decision in public procurement, a Decision Support System based on the fuzzy extent analysis method is developed. In order to demonstrate the usefulness of this system, a real-life case scenario of public procurement is presented.

A GIS-based extended fuzzy multi-criteria evaluation for landslide susceptibility mapping

Landslide susceptibility mapping (LSM) is making increasing use of GIS-based spatial analysis in combination with multi-criteria evaluation (MCE) methods. We have developed a new multi-criteria decision analysis (MCDA) method for LSM and applied it to the Izeh River basin in south-western Iran. Our method is based on fuzzy membership functions (FMFs) derived from GIS analysis. It makes use of nine causal landslide factors identified by local landslide experts. Fuzzy set theory was first integrated with an analytical hierarchy process (AHP) in order to use pairwise comparisons to compare LSM criteria for ranking purposes. FMFs were then applied in order to determine the criteria weights to be used in the development of a landslide susceptibility map. Finally, a landslide inventory database was used to validate the LSM map by comparing it with known landslides within the study area. Results indicated that the integration of fuzzy set theory with AHP produced significantly improved accuracies and a high level of reliability in the resulting landslide susceptibility map. Approximately 53% of known landslides within our study area fell within zones classified as having "very high susceptibility", with the further 31% falling into zones classified as having "high susceptibility".

Singh R, Issar S, Varkey J. Evaluation of vendors ranking by EATWOS approach

Purpose

– In order to improve the supply chain performance, organizations need to improve the efficiency of vendors. Although many techniques are used for vendor efficiency measurement, there is a lack of research about defining satisficing level to analyze improvement potential of vendors. The purpose of this paper is to incorporate satisficing level of some outputs to determine efficiency improvement potential of existing vendors.

Design/methodology/approach

– Method used in this paper is an extension of Data Envelopment Analysis, which has been used frequently for efficiency measurement of Decision Making Units. This method is known as Efficiency Analysis Technique with Output Satisficing (EATWOS), which has been mainly used in the field of economics for efficiency measurement.

Findings

– A case illustration of a National Capital Region of Delhi, India, based manufacturer and distributor of packaged drinking water is depicted to portray the practical application of EATWOS in vendor efficiency evaluation and their relative ranking. This method has helped in evaluating the improvement potential in performance of given vendors and helping in strategic decision making for the given organization

Research limitations/implications

– In case of more variables, this method becomes more complex to get the solution. Second, sometimes difference in vendors ranking without and with satisficing concept is very less, as in this case. Therefore, recording and analysis of output data of vendors should be done very carefully.

Practical implications

– Major implications of this study is that while selecting vendors, organizations should also try to understand improvement potential for given vendors by applying satisficing concept as given in this research. This approach helps in analyzing improvement potentials of suppliers.

Originality/value

– This paper explores an innovative approach to rank vendors on basis of certain criteria after considering the satisficing concept and improvement potentials of vendors.

Group decision making with the analytic hierarchy process in benefit-risk assessment: a tutorial

The analytic hierarchy process (AHP) has been increasingly applied as a technique for multi-criteria decision analysis in healthcare. The AHP can aid decision makers in selecting the most valuable technology for patients, while taking into account multiple, and even conflicting, decision criteria. This tutorial illustrates the procedural steps of the AHP in supporting group decision making about new healthcare technology, including (1) identifying the decision goal, decision criteria, and alternative healthcare technologies to compare, (2) structuring the decision criteria, (3) judging the value of the alternative technologies on each decision criterion, (4) judging the importance of the decision criteria, (5) calculating group judgments, (6) analyzing the inconsistency in judgments, (7) calculating the overall value of the technologies, and (8) conducting sensitivity analyses. The AHP is illustrated via a hypothetical example, adapted from an empirical AHP analysis on the benefits and risks of tissue regeneration to repair small cartilage lesions in the knee.

How can a group of procurement experts select suppliers? An approach for group decision support

Purpose

– The application of theories on group decision support is yet to be explored extensively in supplier selection literature, although the literature in both domains is extremely rich, in isolation. The purpose of this paper is to explore the application of group decision support theories for supplier selection.

Design/methodology/approach

– The row geometric mean method (RGMM) of the analytic hierarchy process (AHP) has been used in this study for the prioritization of group preferences under consensus. A case study was conducted to test the theories of consensual group decision making and compare it with other approaches based on AHP.

Findings

– The study establishes that the application of decision support theories for group decision making can improve the supplier selection process. Findings further imply that RGMM is more effective than eigen value method, for group decision making under consensus.

Research limitations/implications

– Methodologically, the study highlights the greater regularity in outcome of group decision making, vis-à-vis individual decision making, for the same decision-making context. Also, it highlights how RGMM is more effective since it preserves reciprocal properties and diversity in preferences better.

Practical implications

– The study establishes that firms can improve supplier selection processes by leveraging on the collective expertise of a group rather than depending on individual decision-making expertise.

Originality/value

– This study explores the application of different theories based on AHP for consensual group decision making. It compares different approaches based on AHP and establishes that RGMM is a superior approach for supplier selection.

An importance-performance analysis for supplier assessment in foreign-aid funded procurement

Purpose

– Using a sample of executing agency executives, donor agency executives and supplying organisation executives, this study aims to identify the critical criteria for the assessment of suppliers in foreign-aid funded procurement in Bangladesh.

Design/methodology/approach

– An instrument with 32-seven-point (1 – rarely, 7 – mostly) Likert-scaled items was employed to gather data on the level of importance assigned by both buyers and suppliers on each supplier assessment criterion. The importance-performance matrix analysis was conducted to assess the gap in expectations between buyers and suppliers and to organise the assessment criteria into four categories such as “low priority”, “possible killer”, “concentrate here”, and “keep up the good work”.

Findings

– The results indicate that, to provide better service, suppliers must assign tasks to the knowledgeable sales personnel, provide better warranties with well-known branded products, and ensure a reliable level of quality. The supplier organisations should implement a high calibre management system that allows prompt responses to enquiries and the provision of services without buyers having to follow up.

Practical implications

– With careful considerations, the methodology and results of the study could be adapted to design supplier assessment procedure in other developing countries.

Originality/value

– This research employs a simple and practical method which purchasing executives will find easy to apply and interpret the findings.

Pani A. Exploring the importance of different supplier selection criteria

Purpose

– Supplier selection studies have used a wide variety of supplier evaluation criteria, due to the diversity of the purchasing context. The purpose of this study is to identify the critical supplier selection criteria which are important across industries and across purchasing contexts, and subsequently estimate the importance of these criteria to the procurement practitioners.

Design/methodology/approach

– First, a Delphi study has been conducted to identify the critical supplier selection criteria across manufacturing industries. Then, data were collected from 188 firms across 12 industries and analysed with fuzzy analytic hierarchy process for group decision making, to estimate the relative importance of these criteria.

Findings

– Findings indicate that seven criteria are of critical importance to Indian manufacturing industries. Also evaluation criteria like product quality, delivery compliance and price have maximum criticality, while criterion like e-transaction capability is gaining in importance, with the increased adoption of e-procurement platforms.

Research limitations/implications

– The study has been conducted in India, while focusing on Indian manufacturing industries. Similar study conducted in developed economies may produce different results.

Practical implications

– Findings will be useful for practitioners for benchmarking supplier selection processes, not only in India, but also in similar emerging economies. Also, the outcome will provide insights for suppliers for developing systemic improvements.

Originality/value

– There has been no study in recent years which has attempted to estimate the importance of supplier selection criteria, while taking a multi-industry approach. This study identifies the critical evaluation criteria and estimates their relative importance to procurement experts.

Criteria for the evaluation of a cloud-based hospital information system outsourcing provider

As cloud computing technology has proliferated rapidly worldwide, there has been a trend toward adopting cloud-based hospital information systems (CHISs). This study examines the critical criteria for selecting the CHISs outsourcing provider. The fuzzy Delphi method (FDM) is used to evaluate the primary indicator collected from 188 useable responses at a working hospital in Taiwan. Moreover, the fuzzy analytic hierarchy process (FAHP) is employed to calculate the weights of these criteria and establish a fuzzy multi-criteria model of CHISs outsourcing provider selection from 42 experts. The results indicate that the five most critical criteria related to CHISs outsourcing provider selection are (1) system function, (2) service quality, (3) integration, (4) professionalism, and (5) economics. This study may contribute to understanding how cloud-based hospital systems can reinforce content design and offer a way to compete in the field by developing more appropriate systems.

Investigations of Human and Organizational Factors in hazardous vapor accidents

This paper presents a model to assess the contribution of Human and Organizational Factor (HOF) to accidents. The proposed model is made up of two phases. The first phase is the qualitative analysis of HOF responsible for accidents, which utilizes Human Factors Analysis and Classification System (HFACS) to seek out latent HOFs. The hierarchy of HOFs identified in the first phase provides inputs for the analysis in the second phase, which is a quantitative analysis using Bayesian Network (BN). BN enhances the ability of HFACS by allowing investigators or domain experts to measure the degree of relationships among the HOFs. In order to estimate the conditional probabilities of BN, fuzzy analytical hierarchy process and decomposition method are applied in the model. Case studies show that the model is capable of seeking out critical latent human and organizational errors and carrying out quantitative analysis of accidents. Thereafter, corresponding safety prevention measures are derived.