Providing a structured approach for evaluating and selecting suppliers in a supply chain

Abstract

Supply chain management (SCM) is one of the important competitive strategies used by modern organizations. The main objective of supply chain management is to integrate various suppliers in order to satisfy market demand.  Selecting and evaluating suppliers plays an important role in creating a supply chain. The old method of selecting and evaluating suppliers is focused on the needs of businesses and considering it for the entire supply chain of an organization fails to work. So this study presents a structured approach for selecting and evaluating suppliers based on the integrated supply chain structure. For establishing a procedure for the selection and evaluation of suppliers in the supply chain, first, the competitive strategy of the organization by analyzing the strengths, weaknesses, opportunities, and threats (SWOT) is specified. Based on competitive strategy, supplier selection criteria and indicators in order to establish a framework for selecting suppliers are elected. Subsequently, potential suppliers through Data Envelopment Analysis (DEA) are monitored. Finally, the techniques of Multi-Criteria Decision Making (MCDM) is used to rank suppliers. In this paper, a structured approach to select suppliers in an industry will be examined.