Supplier Selection and Supplier Risk Assessment with Using Grey Relations Based TOPSIS Method

Abstract

In todays with the increasing complexity of supply chains, supplier relationships have gained strategic importance for supply chains. Long-term and sustainable supplier relations are important to gain a competitive advantage in the supply chain. It is also important that suppliers are selected according to KPIs, which enable the company to perform operational activities in line with supply chain strategies. To achieve a competitive advantage, all supply chain members must work collaboratively around common goals. The problems that faced by the supply chain members can cause disruption in the whole supply chain. Therefore, it is important that firms take into account the risk factors that may arise from suppliers. In this study, a model has been suggested for the solution of the supplier selection and risk evaluation problem. Grey Relational Analysis based TOPSIS (Technique for Order Preference by Similarity to Ideal Solution) method was used to solve this problem because it is an effective method to solve uncertainty problems with discrete data. In order to evaluate the performance of the proposed method, a real-life case study is conducted in a Turkish textile company. 

Keywords

• Supply chain
• Supplier selection
• Risk
• Grey relational analysis
• TOPSIS

GRİ İLİŞKİSEL TEMELLİ TOPSIS YÖNTEMİ İLE TEDARİKÇİ SEÇİMİ VE TEDARİKÇİ RİSK DEĞERLENDİRMESİ

Abstract

Günümüzde karmaşıklaşan tedarik zinciri yapılarıyla birlikte tedarikçi ilişkileri tedarik zinciri için stratejik öneme sahip bir süreç haline gelmiştir. Tedarik zincirinde rekabet avantajı kazanabilmek için tedarikçiler ile uzun süreli ve sağlam ilişkilerin kurulması önemlidir. Ayrıca tedarikçilerin firmanın tedarik zinciri stratejilerine uygun operasyonel faaliyetlerde bulunmaları ve gerekli kriterlere sahip olmaları önemlidir. Tedarik zincirinde gerçekleştirilen faaliyetlerin başarısı tedarik zincirinde yer alan bağımsız firmaların ortak amaçlar etrafında birleşerek faaliyet göstermesine bağlıdır. Tedarik zincirinde yer alan firmalarda yaşanacak problemler zincir içerisindeki faaliyetlerin aksamasına neden olacaktır. Bu nedenle tedarikçi seçiminde firmaların tedarikçi firmalardan kaynaklanabilecek risk faktörlerini göz önünde bulundurması önemlidir. Bu çalışmada tedarikçi seçimi ve risk değerlendirilmesi probleminin çözümü için bir model önerilmiştir. Problemin çözümü için belirsizlik durumunda karar problemlerinin çözülmesinde etkin sonuç veren Gri ilişkisel temelli TOPSIS (Technique for Order Preference by Similarity to Ideal Solution) yöntemi kullanılmıştır. Yöntemin ilgili problemin çözümündeki performansını gözlemlemek amacıyla çalışmanın uygulama bölümünde Türkiye’de faaliyet gösteren bir tekstil firmasının tedarikçi seçim süreci ele alınmıştır. 

Keywords

• Tedarik zinciri
• Tedarikçi seçimi
• Risk
• Gri ilişkiler analizi
• TOPSIS

References

1. 1. Abdel-Basset M., Chang V., Gamal A., Smarandache F., (2019), An integrated neutrosophic anp and vikor method for achieving sustainable supplier selection: a case study in importing field. Computers in Industry, 106, 94-110. doi:10.1016/j.compind.2018.12.017
2. 2. Abdel-Basset, M., Saleh M., Gamal A., Smarandache F., (2019). An approach of TOPSIS technique for developing supplier selection with group decision making under type-2 neutrosophic number. Applied Soft Computing, 77, 438-452. doi:10.1016/j.asoc.2019.01.035
3. 3. Amindoust, A., & Saghafinia, A. (2017). Textile supplier selection in sustainable supply chain using a modular fuzzy inference system model. The Journal of The Textile Institute, 108(7), 1250–1258. doi:10.1080/00405000.2016.1238130
4. 4. Alikhani, R., Torabi, S. A., & Altay, N. (2019). Strategic supplier selection under sustainability and risk criteria. International Journal of Production Economics, 208, 69-82. doi:10.1016/j.ijpe.2018.11.018
5. 5. Azadeh, A., & Alem, S. M. (2010). A flexible deterministic, stochastic and fuzzy Data Envelopment Analysis approach for supply chain risk and vendor selection problem: Simulation analysis. Expert Systems with Applications, 37(12), 7438-7448. doi:10.1016/j.eswa.2010.04.022
6. 6. Awasthi, A., Govindan, K., & Gold, S. (2018). Multi-tier sustainable global supplier selection using a fuzzy AHP-VIKOR based approach. International Journal of Production Economics, 195, 106-117. doi:10.1016/j.ijpe.2017.10.013
7. 7. Bhattacharyya, R. (2015). A grey theory based multiple attribute approach for R&D project portfolio selection. Fuzzy Information and Engineering, 7(2), 211-225. doi:10.1016/j.fiae.2015.05.006
8. 8. Bhutta, M. K. S. (2003). Supplier selection problem: methodology literature review. Journal of International Information Management, 12(2), 5.

9. 9. Cengiz, A.; Aytekin, O.; Ozdemir, I.; Kusan, H.; Cabuk, A. A Multi-Criteria Decision Model for Construction Material Supplier Selection. Procedia Eng. 2017, 196, 294–301 doi:10.1016/j.proeng.2017.07.202
10. 10. Chai, J., Liu, J. N., & Ngai, E. W. (2013). Application of decision-making techniques in supplier selection: A systematic review of literature. Expert systems with applications, 40(10), 3872-3885. doi:10.1016/j.eswa.2012.12.040
11. 11. Chai, J., & Ngai, E. W. (2020). Decision-making techniques in supplier selection: Recent accomplishments and what lies ahead. Expert Systems with Applications, 140, 112903. doi:10.1016/j.eswa.2019.112903
12. 12. Chan F.T.S., & Chan H.K. (2010). An AHP model for selection of suppliers in the fast changing fashion market. International Journal of Advanced Manufacturing Technology, 51, 1195–1207. doi:10.1007/s00170-010-2683-6
13. 13. Chan, F. T., & Kumar, N. (2007). Global supplier development considering risk factors using fuzzy extended AHP-based approach. Omega, 35(4), 417-431. doi:10.1016/j.omega.2005.08.004
14. 14. Çalık, A. (2018). Otomotiv Tedarik Zincirinde Risk Değerlendirmesi için Bulanık AHP ve TOPSIS ile Bütünleşik Bir Yaklaşım, İşletme Araştırmaları Dergisi, 10(4), 868-886.
15. 15. De Felice, F., Deldoost, M. H., & Faizollahi, M. (2015). Performance measurement model for the supplier selection based on AHP. International Journal of Engineering Business Management, 7(Godište 2015), 7-17. doi:10.5772/61702
16. 16. Er Kara, M., & Oktay Fırat, S. (2018). Supplier Risk Assessment Based on Best-Worst Method and K-Means Clustering: A Case Study. Sustainability, 10(4), 1066. doi:10.3390/su10041066
17. 17. Ghodsypour, S.H. and O’Brien, C. (2001), “The total cost of logistics in supplier selection, under conditions of multiple sourcing, multiple criteria and capacity constraint”, International Journal of Production Economics, Vol. 73, pp. 15-27.pg 16 doi:10.1016/S0925-5273(01)00093-7
18. 18. Hamdi, F.; Ghorbel, A.; Masmoudi, F.; Dupont, L. Optimization of a supply portfolio in the context of supply chain risk management: Literature review. J. Intell. Manuf. 2018, 29, 763–788. doi:10.1007/s10845-015-1128-3
19. 19. Ho, W., Xu, X., Dey, P.K., 2010. Muticriteria decision making approaches for supplier evaluation and selection: a literature review. European Journal of Operational Research 202 (1), 16–24. doi:10.1016/j.ejor.2009.05.009
20. 20. Hosseini, S., Khaled A.A., (2019). A hybrid ensemble and AHP approach for resilient supplier selection. Journal of Intelligent Manufacturing, 30(1), 207-228. doi:10.1007/s10845-016-1241-y
21. 21. Jadidi, O., Yusuff, R. M., Firouzi, F., & Hong, T. S. (2008). Improvement of a grey based method for supplier selection problem. Journal of Achievements in Materials and Manufacturing Engineering, 31(2), 770-777.
22. 22. Jia, P., Govindan, K., Choi, T. M., & Rajendran, S. (2015). Supplier selection problems in fashion business operations with sustainability considerations. Sustainability, 7(2), 1603-1619. doi:10.3390/su7021603
23. 23. Kahraman, C., Cebeci, U., & Ulukan, Z. (2003). Multi-criteria supplier selection using fuzzy AHP. Logistics information management, 16(6), 382-394.
24. 24. Kraljic, P. 1983. Purchasing must become supply management. Harvard Business Review, 61(5): 109-117.
25. 25. KaiFu, Y., (2019). An integrated approach to catering supplier selection using AHP-ARAS-MCGP methodology. Journal of Air Transport Management, 75, 164-169. doi:10.1016/j.jairtraman.2019.01.011
26. 26. Lee, A. H. (2009). A fuzzy supplier selection model with the consideration of benefits, opportunities, costs and risks. Expert systems with applications, 36(2), 2879-2893. doi:10.1016/j.eswa.2008.01.045
27. 27. Li, G. D., Yamaguchi, D., & Nagai, M. (2007). A grey-based decision-making approach to the supplier selection problem. Mathematical and computer modelling, 46(3-4), 573-581. doi:10.1016/j.mcm.2006.11.021
28. 28. Li, Y., Diabat, A. & Lu, C., (2020). Leagile supplier selection in Chinese textile industries: a DEMATEL approach. Ann Oper Res 287, 303–322 doi:10.1007/s10479-019-03453-2
29. 29. Lingyu, H., Bingwu, L., & Juntao, L. (2009, August). An ERP system selection model based on fuzzy grey TOPSIS for SMEs. In 2009 Sixth International Conference on Fuzzy Systems and Knowledge Discovery (Vol. 3, pp. 244-248). IEEE.
30. 30. Liu T., Deng Y., Chan F., (2018). Evidential supplier selection based on DEMATEL and game theory. International Journal of Fuzzy Systems, 20(4), 1321-1333. doi:10.1007/s40815-017-0400-4
31. 31. Mukherjee, K. (2016). Supplier selection criteria and methods: past, present and future. International Journal of Operational Research, 27 (1/2), 356-373 doi:10.1504/IJOR.2016.078470
32. 32. Mishra, S., Datta, S., & Mahapatra, S. S. (2013). Grey-based and fuzzy TOPSIS decision-making approach for agility evaluation of mass customization systems. Benchmarking: An International Journal, 20(4), 440-462. doi:10.1108/BIJ-07-2011-0050
33. 33. Mwikali, R., and Kavale, S. (2012). “Factors affecting the selection of optimal suppliers in procurement management.” Int. J. Human. Social Sci., 2(14), 189–193. Pg.191
34. 34. Nyaoga, R., Magutu, P., & Wang, M. (2016). Application of Grey-TOPSIS approach to evaluate value chain performance of tea processing chains. Decision Science Letters, 5(3), 431-446. doi:10.5267/j.dsl.2016.1.002
35. 35. Pal, O., Gupta, A. K., & Garg, R. K. (2013). Supplier selection criteria and methods in supply chains: A review. International Journal of Social, Management, Economics and Business Engineering, 7(10), 1403-1409.
36. 36. Plebankiewicz, E., & Kubek, D. (2015). Multicriteria selection of the building material supplier using AHP and fuzzy AHP. Journal of Construction Engineering and Management, 142(1), 04015057. doi:10.1061/(ASCE)CO.1943-7862.0001033
37. 37. Rosell, D.T., Lakemond, N. and Wasti, S.N. (2014), “Integrating knowledge with suppliers at the R&D-manufacturing interface”, Journal of Manufacturing TechnologyManagement, Vol. 25 No. 2, p. 6. doi:10.1108/JMTM-12-2013-0171
38. 38. Stević, Ž. (2017). Criteria for supplier selection: A literature review. International Journal of Engineering, Business and Enterprise Applications, 19(1), 23-27. doi:10.1016/j.jal.2016.11.016
39. 39. Taherdoosta, H., Brard, A., (2019). Analyzing the Process of Supplier Selection Criteria and Methods. Procedia Manufacturing, (32), 1024–1034. doi:10.1016/j.promfg.2019.02.317
40. 40. Thiruchelvam, S., & Tookey, J. E. (2011). Evolving trends of supplier selection criteria and methods. International Journal of Automotive and Mechanical Engineering, 4(1), 437-454. doi:10.15282/ijame.4.2011.6.0036
41. 41. Ustun, O., & Demı, E. A. (2008). An integrated multi-objective decision-making process for multi-period lot-sizing with supplier selection. Omega, 36(4), 509-521. doi:10.1016/j.omega.2006.12.004
42. 42. Wan, S.P., Xu, G.L., Dong,& J.Y., (2017). Supplier selection using ANP and ELECTRE II in interval 2-tuple linguistic environment. Information Sciences, 385, 19-38. doi:10.1016/j.ins.2016.12.032
43. 43. Zare, A., Feylizadeh, M., Mahmoudi, A., Liu, S., 2018. Suitable computerized maintenance management system selection using grey group TOPSIS and fuzzy group VIKOR: A case study. Decision Science Letters, 7(4), 341-358. doi:10.5267/j.dsl.201