A Decision Support System to Evaluate Suppliers in the Context of Global Service Providers

In this paper, we present a decision support system (DSS) developed for a global service provider (GSP), which solves a real-world supplier selection problem. The GSP operates in the Italian market of facility management, supplying customers with a variety of services. These services are subcontracted to external qualified suppliers spread all over Italy and chosen on the basis of several criteria, such as service quality, availability and proximity. Selecting the best supplier is a complex task due to the large number of suppliers and the great variety of facility management services offered by the GSP. In the proposed DSS, the choice of the best supplier for a certain service is made according to a thorough multi-criteria analysis. The weights for the criteria were generated by implementing both a simplified analytic hierarchy process and a revised Simos’ procedure, later validated by the decision makers at the GSP. The DSS provides quick access to historical performance data, visual tools to aid decisions, and a suggested ranked list of suppliers for each given contract. The effectiveness of the proposed system was assessed by means of extensive simulations on a seven-year period of real-data and several rounds of validation with the company.

[1]  A.R. Sarfaraz,et al.  An Integrated Approach for Supplier Selection , 2006, 2006 4th IEEE International Conference on Industrial Informatics.

[2]  Alessio Ishizaka,et al.  Multi-criteria Decision Analysis: Methods and Software , 2013 .

[3]  Bernard Roy,et al.  Determining the weights of criteria in the ELECTRE type methods with a revised Simos' procedure , 2002, Eur. J. Oper. Res..

[4]  William Ho,et al.  Integrated analytic hierarchy process and its applications - A literature review , 2008, Eur. J. Oper. Res..

[5]  W. C. Benton,et al.  Vendor selection criteria and methods , 1991 .

[6]  Alessio Ishizaka,et al.  Review of the main developments in the analytic hierarchy process , 2011, Expert Syst. Appl..

[7]  Xiaowei Xu,et al.  Multi-criteria decision making approaches for supplier evaluation and selection: A literature review , 2010, Eur. J. Oper. Res..

[8]  Thomas L. Saaty,et al.  How to Make a Decision: The Analytic Hierarchy Process , 1990 .

[9]  Amitava Ray,et al.  An Integrated Approach for Supplier Selection , 2012 .

[10]  Vipul Jain,et al.  Designing an integrated AHP based decision support system for supplier selection in automotive industry , 2016, Expert Syst. Appl..

[11]  Janis Grabis,et al.  Integration of Decision-Making Components in ERP Systems , 2018, ICEIS.

[12]  Kannan Govindan,et al.  Multi criteria decision making approaches for green supplier evaluation and selection: a literature review , 2015 .

[13]  M. Breton,et al.  Supplier selection-order allocation: A two stage multiple criteria dynamic programming approach , 2011 .

[14]  T. Saaty,et al.  Procedures for Synthesizing Ratio Judgements , 1983 .

[15]  James Nga-Kwok Liu,et al.  Application of decision-making techniques in supplier selection: A systematic review of literature , 2013, Expert Syst. Appl..

[16]  Srinivas Talluri,et al.  A Supply Risk Reduction Model Using Integrated Multicriteria Decision Making , 2008, IEEE Transactions on Engineering Management.

[17]  S. H. Ghodsypour,et al.  The total cost of logistics in supplier selection, under conditions of multiple sourcing, multiple criteria and capacity constraint , 2001 .

[18]  D. K. Banwet,et al.  Supplier selection problem: A state-of-the-art review , 2012 .

[19]  Seyed Hassan Ghodsypour,et al.  A decision support system for supplier selection using an integrated analytic hierarchy process and linear programming , 1998 .

[20]  Ge Wang,et al.  Product-driven supply chain selection using integrated multi-criteria decision-making methodology , 2004 .

[21]  K. Goffin,et al.  Managing suppliers: when fewer can mean more , 1997 .

[22]  William Ho,et al.  The state-of-the-art integrations and applications of the analytic hierarchy process , 2017, Eur. J. Oper. Res..