Supplier selection in supply chain network using MCDM methods

Abstract

Supply Chain Management (SCM) is an important factor for the success of companies, and competitive advantages provided by SCM methods are essential for sustainability in today’s conditions. Under these circumstances, companies must successfully adapt to technology, customer expectations, and supplier management requirements to move ahead of other competitors. One of the important and strategic steps for supply chain management is the supplier evaluation and selection process. In this process, companies prefer multi criteria decision making methods rather than traditional methods because of the large number of supplier alternatives and the variety of evaluation criteria. Considering the aforementioned economic and competitive conditions, a supplier evaluation and selection method has been developed for a company which is operating in defense industry by using multi-criteria decision making methods. In accordance with the purpose of building an effective and sustainable system, Analytical Hierarchy Process (AHP) method has been implemented for the prioritization of the determined supplier evaluation criteria. TOPSIS method has been used to make an ideal selection and to rank among the alternative suppliers by using criterion prioritization determined by AHP method. In order to ensure the continuity of using these methods in the company, an Excel based software written with VBA programming language has been developed. The upgradeable data structure of this program aims to create a fast and effective decision making process under changing conditions. The feature that makes this study unique from other studies in the literature is that, as a result of the analysis performed with data specific to the defense industry sector, the ideal supplier rankings for six different business types are determined and also the created software is used for keeping preferred methods available any time in order to support decision makers in the selection processes of suppliers.

Keywords

• Supplier Evaluation and Selection Process
• Multi-Criteria Decision Making
• Analytical Hierarchy Process
• TOPSIS
• Defense Industry