A weighted max-min model for fuzzy multi-objective supplier selection in a supply chain

Supplier selection is one of the most important activities of purchasing departments. This importance is increased even more by new strategies in a supply chain. Supplier selection is a multi-criteria decision making problem in which criteria have different relative importance. In practice, for supplier selection problems, many input information are not known precisely. The fuzzy set theories can be employed due to the presence of vagueness and imprecision of information. A weighted max-min fuzzy model is developed to handle effectively the vagueness of input data and different weights of criteria in this problem. Due to this model, the achievement level of objective functions matches the relative importance of the objective functions. In this paper, an analytic hierarchy process (AHP) is used to determine the weights of criteria. The proposed model can help the decision maker (DM) to find out the appropriate order to each supplier, and allows the purchasing manager(s) to manage supply chain performance on cost, quality and service. The model is explained by an illustrative example.     

Evaluating the bases of supplier segmentation: A review and taxonomy

A taxonomy of segmentation bases is presented which builds a multi-disciplinary approach to the categorization of suppliers. Supplier segmentation, from a purchasing perspective, still appears to be in the early stages of providing a coherent strategic intent behind supplier assessment. Whilst fragmentary in nature, current portfolio models are grouped into two principal taxonomic constructs of power and dependence and relational factors. In particular, the prevalent use of transaction cost economics (TCE) in portfolio modelling provides a foundation for purchasers to appraise risks from supplier opportunism. We augment existing approaches with reference to inter-organisational theory and the resource-based view to show different modes of inter-firm value creation that act as constituents of a strategic intent for segmentation. Our resulting taxonomy draws together a holistic view of supplier segmentation covering supply market conditions, product/service characteristics, supplier characteristics, buyer characteristics, and buyer-supplier relational factors.     

Improving Supplier New Product Development Performance: The Role of Supplier Development

Suppliers play an increasingly central role in helping firms achieve their new product development (NPD) goals. The literature implicitly assumes that suppliers are able to meet or exceed the quality standards and technological expectations of the firm, and yet, in practice, suppliers often lack the technological capabilities needed to undertake collaborative NPD. In such situations, a firm may choose to intervene and actively develop the supplier's technological and product development capabilities. We develop a theoretical framework that conceptualizes supplier development activities within interorganizational NPD projects as part of a bilateral knowledge‐sharing process: design recommendations, technical specifications, and new technology flow from supplier to the firm, and in turn, the firm can implement supplier development activities to upgrade the supplier's technological capabilities. Antecedents (supplier responsibility, skills similarity, single sourcing strategy) and consequences of supplier development activities (on supplier, product, and project performance) are examined using a sample of 153 interorganizational NPD projects within UK manufacturers. We find broad support for our hypotheses. In particular, we show that the relational rents (in the form of improved product and project performance) attained from supplier development activities in new product development are not achieved directly, but rather indirectly, via improvements in the supplier's creative and technological capabilities. Our results emphasize the importance of adopting a strategic view of the potential returns available from investing in the NPD capabilities of key suppliers, and provide clues about underlying reasons for the suboptimal experiences of many companies' collaborative NPD projects.     

The relationship between supplier management and firm's operational performance: A multi-dimensional perspective

This paper presents an empirical study on the multidimensional relationships between supplier management practices and firm operational performance. Specifically, we focus on three supplier management practices, namely strategic long-term relationship, supplier assessment, and logistics integration, and test their effects on four operations performance measures, namely quality, delivery, flexibility, and cost. We use data collected from 232 manufacturing firms in Australia to conduct the study. Ten hypotheses were tested simultaneously using Structural Equation Modeling (SEM) technique. The results show that different supplier management practices have different unique effects on different operations performance measures. Supplier assessment has a positive relationship with quality performance. Both strategic long-term relationship and logistics integration have positive relationships with delivery, flexibility, and cost performance. From a theoretical perspective, this study demonstrates the relative contributions of different kinds of resources (i.e., supplier management practices in our case) to different performance measures. Our research findings provide practical insights for managers to understand the effectiveness, as well as the limitations, of different supplier management practices in enhancing different operations performance measures of firms.     

Managing interdependencies in supplier networks

Building and managing a supplier base has been referred to in the literature as a key aspect of supplier management. Scholars have proposed a number of models aimed at enhancing the effectiveness of supplier network management, mainly based on a portfolio approach. In the IMP tradition of research, those models are often criticized as they ignore the interdependencies between the different existing dyadic relationships of a focal buyer company and its suppliers. Such interdependencies are the main focus of this paper, which has four objectives: (1) To analyze the types of relationships linking suppliers, (2) to understand the factors and dynamics underlying the creation and management of these relationships (3) to uncover existing links between buyer-supplier and supplier-supplier relationships, and (4) to clarify how different configurations of supplier relationship interactions impact on the performance of the actors involved. The paper discusses two empirical case studies, using the supplier networks of two focal buyer companies. We find that supplier interdependencies are mainly a by-product of the buyer-supplier dyads. Furthermore, the nature and dynamics of these dyads are a strong determinant of the scope and frequency of supplier connections and the corresponding effects on performance.     

Using supply chain management to leverage a firm's market orientation

Building supplier relationships and becoming more market oriented have similar building blocks and have similar effects. Strong supplier relationships tend to impact the firm's performance, in part, because the firm can respond to customer needs in a more timely fashion. Supplier relationships tend to be stronger in firms where there is cross-functional sharing of supplier and customer information. Market orientation is an organizational culture that focuses the company on generating market information, cross-functionally sharing that market information, and rapidly responding to that market information to positively impact the performance of the firm. This study explored whether the positive effects of strong supplier relationships are enhanced in market-oriented firms. Results support the notion that supplier relationships are one way of leveraging a firm's market orientation through improved customer responsiveness. Cross-functional sharing of information appears to be the link that ties market orientation and stronger supplier relationships together.     

Reconfiguring supplier relationships between local and global: History matters

Small and medium-sized companies are increasingly facing international markets as part of their processes of growth and development. A great deal of literature deals with different patterns of growth and international development that are specific to SMEs with respect to large companies. Fewer studies have been conducted on the reconfiguration of company supplier relationships involved in these processes. This paper focuses on the role played by the consolidated set of company supplier relationships when the firm faces some critical stages in its process of development, i.e., growth from small to mid-sized and the implementation of new ventures abroad accessing new business relationships with international suppliers. A multiple and longitudinal case study shows how the local set of supplier relationships of four mid-sized Italian mechanical companies acting in industrial districts has played an important role in shaping the emerging set of supplier relationships and addressing companies' actions in their growth and internationalization processes.     

The impact of customer attractiveness and supplier satisfaction on becoming a preferred customer

This paper discusses how a firm can become preferred customer, defined as a particular buying firm to whom the supplier allocates better resources than less preferred buyers. Two concepts play a central role for a firm aiming to become preferred customer: (i) customer attractiveness and (ii) supplier satisfaction. However, the current literature still lacks a clear discussion on the conceptual differences between these constructs and their attributes and is ambiguous with regard to the relationships between the concepts. This study addresses these shortcomings. We examine customer attractiveness and supplier satisfaction as distinct conceptual variables and test how these constructs relate to each other and to preferred customer status. We build upon practitioner input and survey data from 91 suppliers to do so. Our analyses show that the impact of customer attractiveness on preferential resource allocation from suppliers is significantly mediated by supplier satisfaction. These findings expand the current understanding of these concepts. In addition, our findings might help managers better evaluate their relationships with suppliers and align their strategies accordingly to obtain better resources from their suppliers.     

Strategic Suppliers' Technical Contributions to New Product Advantage: Substitution and Configuration Options

Current theory lacks clarity on how different kinds of resources contribute to new product advantage, or how firms can combine different resources to achieve a new product advantage. While several studies have identified different firm‐specific resources that influence new product advantage, comparatively little research has explored the contribution of strategic supplier resources. Combining resource‐based and relational perspectives, this study develops a theoretical model investigating how a strategic supplier's technical capabilities impact focal firm new product advantage and how firms combine different resources to gain this advantage. The model is tested using detailed survey data collected from 153 interorganizational new product development projects in the United Kingdom within which a strategic supplier had been extensively involved. Empirical results support our research hypotheses. First, supplier technical performance is shown to have a significant positive impact on new product advantage. Next, we show that while supplier technical capabilities have a positive influence on supplier technical performance, the a priori nature of the supplier's task moderates the relationship. Finally, our data support our hypotheses related to the positive relationship between relationship‐specific absorptive capacity and new product advantage, and the proposed negative moderation of supplier technical capabilities on this relationship. Based upon these findings, we encourage managers to recognize that strategic suppliers' with greater technical capabilities perform better regardless of the degree of creativity required by their task; but that strategic suppliers with lower technical capabilities may partially compensate (substitute) for their lack of technical capabilities, if they are able to respond to high problem‐solving task requirements. Furthermore, we suggest that the firm's development of relationship‐specific absorptive capacity is much more important when a strategic supplier is less technically capable. A buying firm's relationship‐specific absorptive capacity can, according to our data, substitute for low supplier technical capabilities. On the other hand, where the supplier has strong technical capabilities, investments in relationship‐specific absorptive capacity have no effect on new product advantage. Our findings reinforce recent calls for research on how firms can combine different resources and capabilities to achieve superior performance.     

The impact of buyer–supplier relationships on supplier innovativeness: An empirical study in cross-border supply networks

Drawing on organizational learning and the relational view of the firm, this study seeks to understand the factors that drive supplier innovativeness in the context of cross-border supply relationships. To address this research objective, a survey included 189 parts and components manufacturers (suppliers) in Turkey; hierarchical regression analysis is used to test the hypotheses. The findings demonstrate that interfirm knowledge sharing routines, relation-specific investments, and governance mechanisms may promote supplier innovativeness by expanding the supplier's knowledge resources and encouraging it to invest in innovative activities. In addition, this research emphasizes differentiating effects of the supplier's tier position for the impacts of buyer assistance and cooperative tie. As such, this study contributes to the purchasing and supply management literature by empirically showing how buyer–supplier relationships, particularly in cross-border supply networks, affect supplier innovativeness.     

Decomposing the effect of supplier development on relationship benefits: The role of relational capital

Buyers invest considerably in developing their suppliers, yet the performance effects of such investments are not universal. Drawing on social capital theory, this research investigates whether the relationship between supplier development and relationship benefits may be facilitated by the generation of relational capital. The authors examine mediating and moderating roles of relational capital in the relationship between two aspects of supplier development (capability development, supplier governance) and two dimensions of relationship benefits (supplier benefits, buyer benefits), using survey data collected from 185 suppliers of a large manufacturing firm. Investment in supplier development does not automatically result in benefits for the supplier or reciprocated benefits for the buyer. Rather, relational capital “bridges” supplier development and relationship benefits. Without relational capital, benefits from capability development do not accrue, and the impact of a supplier governance regime can be even detrimental. In conditions of high relational capital, capability development results in lower perceived buyer benefits. The results can help managers ensure that the benefits from their supplier development efforts fully materialize.     

Negative default dependence in supplier networks

The financial defaults of suppliers in a supplier network are significant risks and causes of uncertainty for buying firms. Hitherto, it has been largely neglected that default probabilities of suppliers in supplier networks are not independent of each other. We aim to overcome this shortcoming by studying negative supplier default dependencies: situations where a surviving supplier may benefit from the default of another supplier, resulting in a lower default probability. We use empirical data from the automotive supplier industry and copula functions, a method of representing joint distribution functions with particular marginals, to capture the default dependency between automotive suppliers and simulate various scenarios with negative default dependency. We also conduct a comparative static analysis illustrating the significant impact of negative default dependence. Our findings should spur managers to analyze their supplier networks with respect to default dependencies, and to take this phenomenon into consideration when making sourcing decisions.     

Supplier selection-order allocation: A two-stage multiple criteria dynamic programming approach

This paper proposes a two-stage multiple criteria dynamic programming approach for two of the most critical tasks in supply chain management, namely, supplier selection and order allocation. In the first stage, to address multiple decision criteria in supplier ranking, the analytic hierarchy process (AHP) is employed. In the second stage, supplier ranks are fed into an order allocation model that aims at maximizing a utility function for the firm as well as minimizing the total supply chain costs, subject to constraints on demand, capacity, and inventory levels. A dynamic programming approach is crafted to solve the proposed bi-objective model.     

Bridging inter- and intra-firm boundaries: management of supplier involvement in automobile product development

Outsourcing has become an important strategy for many firms. Yet, firms need to compete with their competitors who also outsource and may share the same suppliers. This article explores how a firm could outperform others in managing the division of labor with a supplier in product development. Drawing on the empirical data collected from the Japanese auto industry, this paper shows that an automaker needs capabilities to coordinate various activities both externally with a supplier and internally within its own organization, in order to gain better component development performance. Overall, the results imply that outsourcing does not work effectively without extensive internal effort. Copyright © 2001 John Wiley & Sons, Ltd.     

The impact of supplier development on buyer competitive advantage: A path analytic model

As manufacturing firms increasingly realize that supplier performance is crucial to their establishing and maintaining competitive advantage, supplier development has been a subject of considerable research in supply chain management. We develop and test a path model to explore how supplier development practices affect buyer-supplier performance from the buying firm's perspective in the context of Hong Kong's electronics industry. The results show that top management, supplier evaluation, and supplier strategic objectives are significant determinants of transaction-specific supplier development, and that buyers that have closer collaborative relationships with suppliers may strengthen their competitive advantage.     

Market Orientation and Innovativeness in Supply Chains: Supplier's Impact on Customer Satisfaction

As today's firms increasingly outsource their noncore activities, they not only have to manage their own resources and capabilities, but they are ever more dependent on the resources and capabilities of supplying firms to respond to customer needs. This paper explicitly examines whether and how firms and suppliers, who are both oriented to the same customer market, enable innovativeness in their supply chains and deliver value to their joint customer. We will call this customer of the focal firm the “end user.” The authors take a resource‐dependence perspective to hypothesize how suppliers' end‐user orientation and innovativeness influence downstream activities at the focal firm and end‐user satisfaction. The resource dependence theory looks typically beyond the boundaries of an individual firm for explaining firm success: firms need to satisfy customer demands to survive and depend on other parties such as their suppliers to achieve customer satisfaction. Accordingly, the research design focuses on three parties along a supply chain: the focal firm, a supplier, and a customer of the focal firm (end user). The results drawn from a survey of 88 matched chains suggest the following. First, customer satisfaction is driven by focal firms' innovativeness. A focal firm's innovativeness depends, on the one hand, on a focal firm's market orientation and, on the other hand, on its suppliers’ innovativeness. Second, no relationship could be established between a focal firm's market orientation and a supplier's end‐user orientation. Market orientation typically has within‐firm effects, while innovativeness has impact beyond the boundaries of the firm. These results suggest that firms create value for their customer through internal market orientation efforts and external suppliers' innovativeness.     

基于改进TOPSIS法的供应商选择模型研究

为有效地帮助企业快速找到合适的供应商合作伙伴,采用直觉模糊集、评分函数等方法对TOPSIS评估法进行优化,并以此为基础建立了一种供应商选择模型。首先,采集和评估供应商的产品质量、产品价格、产品交货的可靠性、供应位置、财务情况、库存水平、劳资关系、发展能力和技术能力等相关信息,由专家给出主观评估信息,汇总为综合属性值;然后,通过直觉模糊熵确定各评估指标的权重;最后,综合考虑供应商选择决策过程中的多个目标和标准,应用改进TOPSIS法的对供应商进行分类选择。结果显示,基于改进TOPSIS法的供应商选择模型能够较准确地反映出各供应商的真实水平和对企业的潜在价值,可以有效地解决不确定条件下对供应商的选择问题,提高了供应商选择结果的可靠性。改进后的模型简便易行,具有良好的稳定性,对于合理制定企业供应商选择标准以及进一步优化决策模型具有一定的借鉴意义。     

Buyer-supplier relational strength and buying firm's marketing capability: An outside-in perspective

Extant literature in marketing capability with an inside-out perspective stresses existing internal resources as the basis for developing marketing capability. This study, taking an outside-in perspective, argues that starting from external environment and developing strong buyer-supplier relationship can help formulate strong marketing capability of the buying firm. Using survey data from 199 Chinese manufacturing buyers who identified 937 suppliers, we found that strong buyer-supplier relationship can breed strong supplier information sharing and supplier flexibility, which fully mediate the effect of buyer-supplier relationship on buying firms' marketing capability. The findings provide support to the outside-in approach and reveal how external inter-firm relationship can be turned into intra-firm capability, and suggest that strong upstream buyer-supplier relationship can be a necessity for building downstream buyers' marketing capabilities. The findings also suggest an alternative strategy for developing marketing capabilities starting from external suppliers, and may help close the gap between marketing capability and dynamic external environment.     

How does green innovation affect supplier-customer relationships? A study on customer and relationship contingencies

As the demand for eco-friendly products arises, many suppliers have devoted significant effort to green innovation. Prior studies have investigated how green innovation influences product and firm performance; however, its influence on the relationship between suppliers and organizational buyers (customers) is still unknown. Organizational buyers' receptivity to green products is uncertain as they must adjust their current systems to accommodate the new products. As such, understanding how supplier green innovation effort affects the supplier-customer relationship is essential for green innovation success. Using data collected from 196 B2B customers, we find that the relationship between supplier green innovation effort and relational performance depends on several customer- and relationship-level contingencies. Specifically, green innovation benefits a relationship more if customer participation and relational embeddedness are high, or if customer risk aversion and customer-perceived product criticality are low. This research provides valuable guidance for the effective implementation of green innovation.     

Comparing the resource‐based and relational views: knowledge transfer and spillover in vertical alliances

We compare resource‐based and relational perspectives to examine competitive advantages within the context of vertical learning alliances. Previous research has shown that through such alliances suppliers acquire knowledge to forge new capabilities and attain performance improvements. We ask whether such improvements are exclusive to the learning partnership, or are available in other average partnerships of this supplier. We posit that the extent to which such performance improvements are partnership exclusive depends on whether the newly forged capabilities lie entirely within the supplier firm's boundaries, or at the learning dyad level. As such, we untie two forms of performance improvements arising from learning dyads. While the resource‐based view helps explain the performance gains learning suppliers deploy across average partners, the relational view reveals the additional performance edge that remains exclusive to the learning partnership. Based on empirical evidence from a survey of 253 suppliers to the equipment industry, we find that partnership exclusive performance (i.e., ‘relational performance’), the true source of learning dyads' competitive advantage, is a function of suppliers acquiring know‐how within the dyad, developing dyad‐specific assets and capabilities, and structuring buyer‐supplier relational governance mechanisms. We discuss implications for research and practice. Copyright © 2008 John Wiley & Sons, Ltd.