An Integrated Supplier Selection Methodology for Designing Robust Supply Chains

The objective of the supply chain is to maximize the difference between what the final product is worth to the customer and the effort the supply chain expends in fulfilling the customer needs. As there is a growing need to reduce costs and since purchasing accounts for almost 40-60% of the total expenditure of most of the manufacturing firms, supplier selection becomes a critical activity in maintaining the competitive advantage of a firm. Inefficient supplier selection processes lead to sub-optimal performance of the supply chain. In this paper, an integrated multi-criteria supplier selection process is proposed, and the use of performance value analysis in the actual selection process is also demonstrated. A program is developed in MATLAB to calculate the aggregated performance measure for each supplier. Category analysis is also performed for certain significant criteria to see how the alternatives perform with respect to a significant criterion. The rankings of the suppliers are done based on the aggregated performance measure for each supplier and also the category analysis