A Fuzzy AHP Approach for Supplier Selection


Author

Abhijeet K. Digalwar
Mechanical Engineering Department, BITS Pilani, India

Atul Borade
Mechanical Engineering Department, JDIET Yavatmal, India

Bhimaraya Metri
IMI New Delhi, India


Content

Supplier selection is an integral part of supply chain management in any organization which is directly responsible for its success in market and if we see today’s highly competitive environment then it is pretty much difficult to find an effective and efficient supplier which can fulfill all organization’s need as required. Though there has been extensive research in supplier selection and quality management, but there has been less research in supplier selection/ evaluation under various conflicting/dependent criteria and sub criteria. To overcome this issue, Fuzzy-AHP a multi criteria decision making approach is proposed. This allows the decision making in fuzzy environment to rule out the error caused due to vagueness in human thoughts.

Keywords: supplier selection, MCDM, AHP, fuzzy

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Varieties of customer demands, advances of information technologies, competition in global environment, increases in governmental regulations and in environmental consciousness have forced companies for focusing on supply chain management. The supply chain management term has been used from almost two decades and is defined as the integration of activities to procure materials, transforms them into intermediate goods and final products, and delivers to customers. The supply chain consists of all links from suppliers to customers of a product. Many researchers (Tracey and Tan, 2001; De Boer et al., 2001; Bello, 2003; Cebi and Bayraktar, 2003; Digalwar and Metri, 2005; Digalwar and Sangwan, 2007; Calvi et al. 2010; Chen et al., 2011; Lee et al. 2012; Abadi and Cordon, 2012) have stated that supplier management is one of the key issues of supply chain management and business excellence because the cost of raw materials and component parts constitutes the main cost of a product and most of the firms have to spend considerable amount of their sales revenues on purchasing. Hence, supplier selection is one of the most important decision making problems, since selecting the right suppliers significantly reduces the purchasing costs and improves corporate competitiveness (Cebi and Bayraktar, 2003).

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The paper presents the numerical method for supplier selection for braking system material. A manufacturing company desires to select a most suitable supplier for its product Anti-compounding relay valve (ACRV). Management of organization has decided the criteria quality, technical capability, production facility and capability, buyer-supplier relationship. Sub criteria are Product Durability, ISO Certification status, Rejection Rate , Design Capability, Technology and innovation, Future manufacturing facilities and equipment capabilities, Facilities for measurement, calibration and testing, Machine capability, Delivery, Long-term Relationship, Level of trust and understanding, Share sensitive information (financial, production, R&D) for the evaluation of their suppliers. The hierarchical structure of this decision problem is shown in Figure 1. As mentioned, the AHP methodology first necessitates the pairwise comparisons of the criteria and subcriteria in order to determine their weights. These consistent comparison matrices are shown in Table 2. The normalized priority weights among the two main criteria and five subcriteria and their ranking have been depicted in Table 3 as shown below.

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In this paper a fuzzy AHP approach has been used to select the supplier for braking system material for AntiCompounding relay valve based on the ranking of criteria. The main criteria and sub criteria have been decided which are based on the current business scenario and experience of the experts in the respective manufacturing firm. The FuzzyAHP approach is proved to be simple, less time taking and having less computational expense as compared to other existing decision making systems. The Fuzzy-AHP has the ability to capture the vagueness of human thinking style and effectively solve multi-attribute decision making problems.

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About Author

Abhijeet K. Digalwar received a Ph.D. from BITS Pilani, India. Presently, he is working as Assistant Professor in Mechanical Engineering. He has over 17 years of teaching and research experience at graduate and post graduate levels. His areas of interest are performance measurement systems, world class manufacturing, total quality management , green manufacturing, knowledge management and manufacturing strategy. He has published more than 50 papers in national and International journals and Conferences. He is life member of Indian Society of Technical Education and a member of Performance Measurement Association, UK and ISDSI of Decision Sciences Institute USA. He is reviewer of many prestigious national and international journals and also working as a editorial board member for International Journal of Manufacturing Systems, Asian Journal of Industrial Engineering and Research Journal of Business Management of Academic Journal inc of USA.

Atul Borade received a PhD from Amravati University, India, Presently he is working as a Professor and Head, Mechanical Engineering Department of JDIET Yavatmal. He is also Dean, Research and Development of institute. He has over 17 years of teaching and research experience. His areas of research mainly focus on vendor management, MCDM. He is life member of Indian Society of Technical Education and a member of Performance Measurement Association, UK and ISDSI of Decision Sciences Institute USA. He is reviewer of many prestigious national and international journals and also working as an editorial board member for International Journal of Manufacturing Systems.

Bhimaraya A. Metri received his Ph.D from IIT Bombay, Powai, Mumbai, India. Dr. Metri is currently Dean (Academic) and Professor of operations management at IMI New Delhi. Dr. Metri has more than 24 years of experience in teaching, training, research and consulting. An authority in the field of quality Management, Project Management and supply chain management, Dr. Metri has published over 100 research articles in international, national journals & proceedings. He is also co-authored books “Managing Global Services” and “World Class Manufacturing”. He is on the editorial advisory boards of national and international journals. Dr. Metri served as a member of various National and International Level Committees/forums of higher technical education. He is deeply involved with consulting and executive education including international training with a wide range of organizations including leading organizations of government, public sector and private sector. Apart from global exposure, Dr. Metri has vast experience of National Accreditation-NBA & International Accreditations-SAQS, AMBA, EQUIS and AACSB. Dr. Metri is the Member of Decision Sciences Institute (DSI), USA. Currently, he is President of the ISDSI and Member Regional Activities Committee, DSI, USA.