A novel hybrid multi-criteria method for supplier selection among SMEs on the basis of innovation ability

Today, small and large business houses operate collaboratively for the efficiency in the functioning of supply chains. Larger organisations mostly depend on small companies to supply majority of its components and thus they need to be careful while selecting their suppliers. Small organisations performing innovatively and supplying technologically upgraded as well as quality products at a cheaper rate can be a boon for the larger enterprise. This study develops a model for evaluating and selecting small firms as suppliers on the basis of their innovativeness. Best–Worst multi-criteria method is used to rank criteria of innovativeness and also to calculate their weights on the basis of expert opinion. Fuzzy TOPSIS methodology is used to rank the suppliers with respect to these criteria and finally select the best supplier among the available alternatives. A real-world application is illustrated by taking a case of auto component manufacturer and its seven suppliers, 5 main criteria and 23 sub-criteria are taken up for the study.

Abbreviations: AHP: analytical hierarchal process; ANP: analytical network process; DEMATEL: decision-making trail and evaluation laboratory; EMS: environment management system; ELECTRE: ELimination Et Choix Traduisant la REalité (elimination and choice expressing reality); FPIS: fuzzy positive ideal solution; FNIS: fuzzy negative ideal solution; ISM: interpretative structural modelling; PROMTHEE: preference ranking organisation method for enrichment evaluation; SME: small and medium enterprises; TOPSIS: technique for order preference by similarity to ideal solution; QFD: quality function deployment; VIKOR: VlseKriterijuska Optimizacija I Komoromisno Resenje; SP1; SP2; SP3; SP4; SP5; SP6; SP7: Various suppliers used as alternatives