Because of the pressure of globalization in the last two decades, outsourcing activities has become an important strategic decision so that supplier selection is a prime concern. In fact, the selection problem is more crucial for the manufacturers of sophisticated semiconductor assembly equipments, as it is a multi-item, multi-person and multi-criterion decision problem. Among the reported literature, the analytic hierarchy process (AHP) has been recognized as an appropriate tool to tackle the said problem. In this paper, a case study is reported to illustrate an innovative model which adopts AHP and quality management system principles in the development of the supplier selection model. The proposed model can provide not only a framework for the organization to select supplier but also capability to deploy the company strategy to suppliers. Added to this, it also has flexibility to respond to the changing needs of the organization due to dynamic business environment. Through an illustration of the proposed model, it is found that the supplier selection problem can be solved in a structural and timely manner.
WattsC. A.KimY. K.HahnC.Linking purchasing to corporate competitive strategy. Int. J. Purchasing Mater. Managmt, 1992, 28 (4), 2–8.
2.
MillerJ. G.GrahamM. B. W.Production/operations management: Agenda for the '80s. Decision Sci., 1981, 12 (4), 547–571.
3.
FlynnB. B.SchroederR. G.SakakibaraS.A framework for quality management research and an associated measurement instrument. J. Ops Managmt, 1994, 11 (4), 339–366.
4.
DicksonG. W.An analysis of vendor selection systems and decisions. J. Purchasing, 1996, 2 (1), 5–17.
5.
NarasimhanR.An analytical approach to supplier selection. J. Purchasing Mater. Managmt, 1983, 19 (4), 27–32.
6.
NydickR. L.HillR. P.Using the analytic hierarchy process to structure the supplier selection procedure. J. Purchasing Mater. Managmt, 1992, 25 (2), 31–36.
7.
PartoviF. Y.BurtonJ.BanerjeeA.Application of analytic hierarchy process in operations management. Int. J. Opns Prod. Managmt, 1990, 10 (3), 5–19.
8.
PorterM. E.Note on the structural analysis of industries. Harvard Business School Note 376-054, Harvard College, Boston, Massachusetts, 1975.
9.
KiserG. E.Elements of purchasing strategy. J. Purchasing Mater. Managmt, 1976, 12 (Fall), 3–7.
10.
JainS. C.LaricM.A model for purchasing strategy. J. Purchasing Mater. Managmt, 1979, 15 (4), 2–7.
11.
HahnC. K.KimK. H.KimJ. S.Costs of competition: Implications for purchasing strategy. J. Purchasing Mater. Managmt, 1986, 3 (4), 2–7.
12.
EllramL. M.CarrA.Strategic purchasing: A history and review of the literature. Int. J. Purchasing Mater. Managmt, 1994, 30 (1), 10–18.
13.
CarlsonP. F.The long and short of strategic planning. J. Business Strategy, May-June 1990, 15–19.
14.
ReidD. R.Purchasing and manufacturing strategy. In Fourth Purchasing and Materials Management Research Symposium, Bethlehem, Pennsylvania, October 1990.
15.
KraljicP.Purchasing must become supply management. Harvard Business Rev., 1983, 5, 109–117.
16.
FarisC. W.RobinsonP. J.WindY.Industrial Buying and Creative Marketing, 1967 (Allyn and Bacon, Boston, Massachusetts).
17.
WeberC. A.CurrentJ. R.BantonW. C.Vendor selection criteria and methods. Eur. J. Opl Res., 1991, 50 (1), 2–18.
18.
MandalA.DeshmukhS. G.Vendor selection using interpretive structural modelling (ISM). Int. J. Ops Prod. Managmt, 1993, 14 (6), 52–59.
19.
BurtonT. T.JIT/repetitive sourcing strategies: 'tying the knot' with your suppliers. Prod. Inventory Managmt J., 1988, 29(4) 38–41.
20.
BentonW. C.KrajewskiC.Vendor performance and alternative manufacturing environments. Decision Sci., 1990, 21 (2), 403–415.
21.
PurdyL.AstadU.SofayeniF.Perceived effectiveness of the automatic supplier evaluation process. Int. J. Ops Prod. Managmt, 1994, 14 (6), 91–103.
22.
WeberC. A.CurrentJ. R.A multi-objective approach to vendor selection. Eur. J. Opl Res., 1993, 68 (2), 173–184.
23.
WagnerJ.EttensonR.ParrishJ.Vendor selection among retail buyers: An analysis by merchandise division. J. Retailing, 1989, 65, 58–77.
ChapmanS. N.Just-in-time supplier inventory: An empirical implementation model. Int. J. Prod. Res., 1993, 27, 1993–2007.
26.
VermaR.PullmanM. E.An analysis of the supplier selection process. Omega, 1998, 26 (6), 739–750.
27.
BoerL.LabroE.MorlacchiP.A review of methods supporting supplier selection. Eur. J. Purchasing Supply Managmt, 2001, 7 (2), 75–89.
28.
VickeryS. K.DrogeC.MarklandR. E.Production competence and business strategy: Do they affect business performance?Decision Sci., 1993, 24(2), 435–455.
29.
WilliamsF. P.D'SouzaD. E.RosenfeldtM. E.KassaeeM.Manufacturing strategy, business strategy and firm performance in a mature industry. J. Ops Managmt, 1995, 13 (1), 19–33.
30.
SkinnerC. W.Manufacturing—missing link in corporate strategy. Harvard Business Rev., 1969, 47 (3), 136–145.
31.
HayesR. H.WheelwrightS. C.Restoring our Competitive Edge: Competing through Manufacturing, 1984 (John Wiley, New York).
32.
SkinnerC. W.Production under pressure. Harvard Business Rev., 1966, 44 (6), 139–146.
33.
WheelwrightS. C.Reflecting corporate strategy in manufacturing decisions. Business Horizons, 1978, 21 (1), 57–66.
34.
SchmennerW.Production/Operations Management: Concepts and Situations, 1st edition, 1981 (Science Research Associates, Palo Alto, California).
35.
KrauseD. R.PagellM.CurkovicS.Toward a measure of competitive priorities for purchasing. J. Ops Managmt, 2001, 19 (4), 497–512.
36.
LeongG. K.SnyderD. L.WardP. T.Research in the process and content of manufacturing strategy. Omega, 1990, 18 (2), 109–122.
37.
EttlieJ. E.Product process development integration in manufacturing. Managmt Sci., 1995, 41 (7), 1224–1237.
38.
CohenM. A.EliashbergJ.HoT.New product development: The performance and time to market trade-off. Managmt Sci., 1996, 42 (2), 173–186.
39.
McGrathR. G.TsaiM.VenkataramanS.MacMillanI. C.Innovation, competitive advantage and rent: A model and test. Managmt Sci., 1996, 42 (3), 389–403.
40.
ChanF. T. S.Performance measurement in a supply chain. Int. J. Advd Mfg Technol., 2003, 21, 534–548.
41.
GarvinD. A.Competing on the eight dimensions of quality. Harvard Business Rev., November-December 1987, 65(6), 101–109.
42.
MohantyR. P.DeshmukhS. G.Essentials of Supply Chain Management, 2001 (Phoenix Publishing House, New Delhi).
43.
YahyaS.KingsmanB.Vendor rating for an entrepreneur development programme: A case study using analytic hierarchy process method. J. Opl Res. Soc., 1999, 50, 916–930.
44.
MuralidharanC.Application of analytic hierarchy process (AHP) in materials and human resources management under group decision making environment. PhD thesis, Annamalai University, Annamalainagar, 1999.
45.
ChanF. T. S.QiH. J.A fuzzy basis channel-spanning performance measurement method for supply chain management. Proc. Instn Mech. Engrs, Part B: J. Engineering Manufacture, 2002, 216 (B8), 1155–1167.
46.
VargasL. G.An overview of the analytic hierarchy process and its application. Eur. J. Opl Res., 1990, 48 (1), 2–8.
Roper-LoweG. C.SharpJ. A.The analytic hierarchy process and its application to an information technology process. J. Opl Res. Soc., 1990, 41 (1), 49–59.
49.
TummalaV. M. R.WanY. W.Analytic hierarchy process (AHP) in practice: A survey of applications and recent developments. J. Math. Modelling Scient. Computing, 1994, 3 (1), 1–38.
50.
LiberatoreM. J.An extension of the analytic hierarchy process for industrial R&D project selection and resources allocation. IEEE Trans. Engng Managmt, 1987, EM-34 (1), 12–18.
51.
LiberatoreM. J.A decision support approach for R&D project selection. In The Analytic Hierarchy Process: Applications and Studies (Eds GoldenB. L.WasilE. A.HarkerP. T.) 1989, pp. 13–29 (Springer-Verlag, New York).
52.
LiberatoreM. J.NydickR. L.SanchezP. M.The evaluation of research papers (or how to get an academic committee to agree on something). Interfaces, 1992, 22 (2), 92–100.
53.
SaatyT. L.The Analytic Hierarchy Process, 1980 (McGraw-Hill, New York).
54.
Expert Choice, Decision Support Software, 1996 (McLean, Pittsburgh, Pennsylvania).
