Purchasing materials in the supply chain: managing a multi-objective task

Mathematical Modelling of Inventory and Process Outsourcing for Optimization of Supply Chain Management

Outsourcing is one of the major challenges for production firms in the current supply chain management (SCM) due to limited skilled workers and technology resources. There are too many parameters involved in the strategic decisions of the outsourcing level, quantity, quality, and cost. The outsourcing process removes the burden of capital investment; however, still it creates crucial concerns related to inventory control and production management by adding extra inventories. The semi-finished products are outsourced for a few processes due to limited resources and then returned to the manufacturer for the finishing operations. The article is based on the mathematical modeling and optimization of the process outsourcing considering imperfect production with variable quantity for the effective supply chain management. The numerical experiment was performed based on the data taken from the industry for the application of the proposed outsourcing-based SCM model. The results are significant in finding optimal production and outsourcing quantity with a minimum total cost of SCM. The sensitivity analysis was performed to see how important the effect of input parameters is on the total cost. The research is an important contribution in developing a mathematical model of process outsourcing in SCM. The research study is beneficial for managers to find the economic feasibility of process outsourcing for managing inventory and supply chain between manufacturer and outsourcing vendor.

A Decision-making Model for Supplier Selection in Indian Pharmaceutical Organizations

Supplier selection is the process by which firms identify, evaluate and contract with suppliers. The supplier selection process deploys a tremendous amount of a firm’s operational and financial resources and is considered as an important determinant of the success of its supply chain. In spite of being strategically important to organizations, the decision for supplier selection is often complex and unstructured. Furthermore, it is inherently a multi-criterion decision-making (MCDM) problem, which pertains to structuring and solving decision problems involving multiple criteria. The paper provides a framework to analyze and evaluate supplier selection in Indian pharmaceutical sector (IPS) using MCDM technique of fuzzy analytic hierarchy process. It intends to improve managerial decision-making in the IPS in developing a supplier selection strategy based on multi-criteria evaluation technique.

A supplier selection model in pharmaceutical supply chain using PCA, Z-TOPSIS and MILP: A case study

Supplier selection is one of the critical processes in supplier chain management which is associated with the flow of goods and services from the supplier of raw material to the final consumer. The purpose of this paper is to present a novel approach and improves the supplier selection in a multi-item/multi-supplier environment, and provide the importance and the reliability of the criteria by handling vagueness and imperfection of information in decision making process. First, principal component analysis (PCA) method is used to reduce the number of supplier selection criteria in pharmaceutical companies. Next, using the most important criteria resulted from the PCA method, the importance and the reliability of the selected criteria are assessed by a group of decision-maker (DM). Then, the importance value of each supplier with respect to each product is obtained via the Technique for Order Performance by Similarity to Ideal Solution (TOPSIS) based on the concept of Z-numbers called Z-TOPSIS. Finally, these values are used as inputs in a mixed integer linear programming (MILP) to determine the suppliers and the amount of the products provided from the related suppliers. To validate the proposed methodology, an application is performed in a pharmaceutical company. The results show that the proposed method could provide promising results in decision making process more appropriately.

Supplier selection for a sustainable supply chain

Purpose

The purpose of this paper is to integrate the “triple bottom line (3BL)” approach in the supplier selection decision. It also aims to consider the feedback effect of the decision on strategic factors that determine the future viability of the firm in the market.

Design/methodology/approach

A multi-criteria decision model is developed that considers simultaneously the impact of three dimensions of 3BL approach and their sub-dimensions on the supplier selection decision. The proposed model is evaluated for a large white goods manufacturer using the analytic network process (ANP) approach.

Findings

The ANP considers the impact of variables, sub-variables, and their interdependencies simultaneously. The outcome of the model is the relative priorities for the firms considered as potential suppliers.

Practical implications

This research was conducted in one of the largest developing economies. The impact of integrating sustainability would be widespread due to the huge market in which the company operates. The results of this research can provide support to the decision makers in arriving at an optimal decision considering all sustainability dimensions.

Originality/value

The novelty of the approach lies in the application of multi-criteria model integrating sustainability dimensions with a feedback effect for supplier selection. The case company would benefit by showing its commitment toward environment and social responsibility leading to improved brand image and sustainable business.

Multi-criteria supplier selection model using the analytic hierarchy process approach

Purpose

– The purpose of this paper is to propose a supplier selection model for an automobile company using analytic hierarchy process (AHP) approach. Supplier selection is now growing to be an important but complex issue, as it involves a large number of factors and decisions. These factors have complicated operational and financial implications.

Design/methodology/approach

– A case study of an Indian automobile company is used to illustrate and propose a supplier selection model using AHP approach.

Findings

– Key criteria of the supplier selection problem are identified based on the literature review and case study. Then, a model is proposed for supplier selection using AHP approach followed by a detailed sensitivity analysis.

Practical implications

– This paper contributes to supplier selection process, and points out the importance of supplier selection. It proposes a supplier selection model for an automobile industry which often faces heterogeneous supply environments. The proposed model provides key criteria for supplier selection in Indian context. This model may have high acceptability, where a large number of suppliers are available to supply the materials or provide the services.

Originality/value

– The proposed model can provide guidelines and directions for managers involved in purchasing function to effectively select suppliers on the basis of the identified criteria in the heterogeneous manufacturing environment.

Green supply chain management

Purpose

– Globalization has led worldwide organizations to balance their economic and environmental performances in order to achieve a concrete sustainable development. In an environmental centered world, logistics is called to put into action advanced programs based on technological and organizational improvement, in order to gain or maintain a concrete competitive advantage. The purpose of this paper is to investigate how logistics organizations try to face the recent ecological challenges and the role that the emergent green technologies play in making them finally “green” and competitive.

Design/methodology/approach

– Green supply chain management (GSCM) practices have been investigated to better understand their influence on economic performance and corporate competitiveness. After providing a background discussion on Green Logistics and GSCM, the authors have also identified specific research questions that are worthy of investigation, also thorough the DHL case study. The case study analysis has been conducted according to a specific conceptual model (Rao and Holt, 2005), which allows a deeper understanding of literature review results.

Findings

– The present paper offers some insights on innovation influence on supply chain management (SCM) greenness, a process oriented to a sustainable and environmental-friendly approach to management of supply chain. According to DHL case study evidence, in logistics innovation, often based on emerging green technologies, is strictly related to the development of a much more sustainable and environment-friendly approach to SCM, based on reduction of core activities’ ecological impact, cost saving, quality, reliability, performance and energy efficiency. In this context, the respect of environmental regulations is fundamental to achieve not only a reduction of ecological damage, but also to overall economic profit.

Research limitations/implications

– There is a concrete need of further research to better understand the potential link between GSCM, green innovation and logistic organizations competitiveness. In fact, this research area still represents a source of interesting challenges for practitioners, academicians and researchers. Concluding, the research findings cannot be generalized to all logistic organizations, even if DHL is on of the most important and globalized logistic companies. Future researches should empirically test the achieved results also through comparative studies based on a large sample.

Originality/value

– The suggestion of literature review and the result of case study analysis represent a first attempt to better understand the real and potential influence of GSCM on corporate image and competitiveness. In fact, the present investigation has pointed out that logistic organization can achieve environmental goals and acquire a better positioning than their competitors also cooperating with stakeholders. Therefore, it is necessary that organizations contribute to make them able to participate in corporate activities and develop a concrete environmental-friendly orientation, based on the respect of market’s requests and environmental regulations in order to get their corporate reputation strong than ever.

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.

An Integrated AHP-Entropy Approach for Spare Parts Supplier Evaluation and Order Quantity Allocation

This paper employs a two-stage method to the spare parts supplier evaluation problem and the order quantity allocation problem. In the first stage, we integrated approaches of analytic hierarchy process (AHP) and information entropy to evaluate the suppliers. In the second stage, the alternative suppliers’ weight scores obtained in the first stage are used as coefficients of the objective functions in a linear programming model. The model is developed to determine the optimal order quantity from the suppliers with consideration of the suppliers’ capacities and the buyer’s quality requirements of the products and service. A numerical example about the typical spare parts - ingot mold purchasing in an iron & steel company is presented to illustrate the approach proposed finally

Supplier Selection by the Pair of AR-NF-IDEA Models

Supplier selection is the process by which suppliers are reviewed, evaluated, and chosen to become part of a company’s supply chain. To select the best suppliers in the presence of cardinal data, ordinal data, nondiscretionary factors, and weight restrictions, this paper proposes a new model considering all of these assumptions. A numerical example demonstrates the application of the proposed method.