Integrated model for supplier evaluation: Taking the machine tool industry as an example

Abstract An important consideration for a manufacturer is how to select, evaluate, observe, and finally create a cooperative relationship with existing or new suppliers. Previous research in this area indicates that most enterprises tend to evaluate their suppliers mainly based on quality, delivery performance, and cost. However, it is ineffective for an enterprise to only consider one of these factors when faced with an all-round competitive environment. An analysis tool that can simultaneously integrate numerical decision criteria would be more useful, especially for the machine tool industry with its high proportion of outsourcing operations, short lead times, multiple component categories, and small batches. In an effort to meet this need, an integrated performance evaluation model, using multiple indices that construct a suppliers’ integrated evaluation chart (SIEC), is presented in this study. This model can aid managers to understand the problems encountered by their suppliers and lead them to solutions for these problems that are mutually beneficial. Finally, this study offers an illustration of a Taiwanese machine tool manufacturer's use of the SIEC in a practical application.