Serial-integrated multi-criteria decision-making technique for resilient supplier selection in the manufacturing industry

Abstract

A supply chain is an entire system of producing and delivering a product or service, from the very beginning stage of sourcing raw material to the final stage of delivering a product or service to end-users. Several global risks and disruptions brought massive and devastating impacts on the world economy including the Small and Medium Enterprises (SMEs). Since the supplier is one of the important elements in a supply chain, economic resilience can be implemented by selecting a resilient supplier. However, the literature shows that previous supplier selections only focused on traditional, green and sustainable suppliers’ criteria but resilience was rare to be discussed. Thus, the first objective of the study is to identify the generic criteria for selecting resilient suppliers. At the same time, there are problems in dealing with uncertainties and incomplete information while selecting suppliers. The second objective is to develop a new integrated Multi-Criteria Decision-Making (MCDM) model that considers incomplete data and uncertainties in selecting resilient suppliers. In this study, the proposed criteria were quality, lead time, cost, flexibility, visibility, responsiveness and financial stability. A serial-integrated MCDM technique was proposed by combining Grey Relational Analysis (GRA) from the grey theory and the Best Worst Method-Technique for Order Preference by Similarity to an Ideal Solution (BMW-TOPSIS) technique in serial to assess the suppliers and select the best alternative. The proposed criteria and technique were applied in the metal manufacturing company (Case 1) and the food manufacturing company (Case 2) which were facing economic problems to demonstrate its effectiveness. The result was generated using MATLAB. The result for Case 1 shows that Financial Stability has the largest weight and Supplier 1 is the best supplier for the company. For Case 2, Cost shows the largest weight, and the best supplier is Supplier 4. Then, the result was verified through manual calculation and validated with Analytic Hierarchy Process-VlseKriterijumska Optimizacija I Kompromisno Resenje (AHP-VIKOR). Through the identification of the generic resilience criteria and the suitable MCDM model, the managers can focus on resilience with the consideration of uncertainties and incomplete information to improve the supplier selection process. This can help to raise the supply chain performance of the companies.