Scm Supplier Selection Model

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In Supply chain management every element plays its important role. In SCM Supplier selection is the most important process to find out better option available in the market. While supplier development involves embracing supplier expertise and aligning it to the buying organization’s business need. In a literature survey and explorative interviews, relevant criteria including supplier improvement potential through buyer involvement, strategic factors of the supplier development program as well as project success factors in supplier development. Subsequently a decision model based on the analytic hierarchy process (AHP) is applied to the supplier selection.
Keywords: Supply chain management, Supplier development, Analytical hierarchy process. …show more content…

In the following years a lot of work in this field was done by a number of researchers who propose systematic models to the selection problem. In an extensive literature review [11] the existing research of the final choice models into five categories.
(1) Linear weighting models: linear weighting models are the most commonly used method in supplier selection. All criteria are attributed with weights, with the highest weighted criteria having the highest importance. These criteria weights are then multiplied with a supplier’s rating and summed in order to obtain the final rating. In linear weighting the analytic hierarchy process (AHP) and its derivatives are very popular due to their ability to provide criteria weights and performance scores by verbal, qualitative statements or quantitative statements in complex …show more content…

Table 2: Project success factors
Project relevant supplier capabilities The supplier’s top management capability in supporting the development activities, the mind management’s capability in implementing the measures, the workforce capacities in participating in the project and the company’s existing use of standards
Supplier commitment The top management eagerness of supporting a supplier development project and the operating manager’s eagerness and openness to implement any proposed changes in production and quality management
Relationship quality The historic relationship quality including the frequency of conflicts and level of trust between supplier and buyer
Buyers support capability The buying company’s availability of resources to support the project at the supplier
Table 3: Strategic importance of the supplier
Dependency on supplier The buying company’s dependency on the supplier in term of current and future volume as well as technical or regional dependency
Competitive capabilities The supplier’s relative competitiveness in terms of cost, quality, delivery and technology
Supplier risk assessment The evaluation of internal and external risks of the supplier based on risks previously encountered in suppliers development

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