Integrated dynamic vendor selection and order allocation problem for the time dependent and stochastic data

Distribution planning problem of a supply chain of perishable products under disruptions and demand stochasticity

Purpose

The emergence of risk in today's business environment is affecting every managerial decision, majorly due to globalization, disruptions, poor infrastructure, forecasting errors and different uncertainties. The impact of such disruptive events is significantly high for perishable items due to their susceptibility toward economic loss. This paper aims to design and address an operational planning problem of a perishable food supply chain (SC).

Design/methodology/approach

The proposed model considers the simultaneous effect of disruption, random demand and deterioration of food items on business objectives under constrained conditions. The study describes this situation using a mixed-integer nonlinear program with a piecewise approximation algorithm. The proposed algorithm is easy to implement and competitive to handle stationary as well as nonstationary random variables in place of scenario techniques. The mathematical model includes a real-life case study from a kiwi fruit distribution industry.

Findings

The study quantifies the performance of SC in terms of SC cost and fill rate. Additionally, it investigates the effects of disruption due to suppliers, transport losses, product perishability and demand stochasticity. The model incorporates an incentive-based strategy to provide cost-cutting in the existing business plan considering the effect of deterioration. The study performs sensitivity analysis to show various “what-if” situations and derives implications for managerial insights.

Originality/value

The study contributes to the scant literature of quantitative modeling of food SC. The research work is original as it integrates a stochastic (uncertain) nature of SC simultaneously coupled with the effect of disruption, transport losses and product perishability. It incorporates proactive planning strategies to minimize the disruption impact and the concept of incremental quantity discounts on lot sizes at a destination node.

Analysis of Key Factors for Supplier Selection in Taiwan’s Thin-Film Transistor Liquid-Crystal Displays Industry

With the advent of science and technology, smart devices have become ubiquitous; since the display unit is a vital component in many smart devices, the Thin-Film Transistor Liquid-Crystal Displays (TFT-LCD) industry has been one of the most rapidly growing industries. Taiwanese manufacturers play a critical role in this industry. This study investigates key factors for supplier selection in Taiwan’s TFT-LCD industry. TFT-LCD is a technology-intensive industry. However, few studies in the past considered the technological abilities dimension in supplier selection. Therefore, this study discusses the factors related to the technological abilities dimension in supplier selection. Most research considered supplier selection based on the traditional criteria such as cost and quality. This study discusses the importance of the resilience criteria such as agility and flexibility. A method combining DEMATEL (Decision Making Trial and Evaluation Laboratory) and ANP (Analytic Network Process) is applied to analyze key factors for supplier selection in Taiwan’s TFT-LCD industry. The analytical results indicate that the technological abilities dimension and resilience criteria are at the forefront of the ranking in prominence. The influential weights of criteria and the causal diagram among all criteria derived from this study can offer guidance for suppliers on improving various factors to become desirable partners in the TFT-LCD industry supply chain.

The LR-Type Fuzzy Multi-Objective Vendor Selection Problem in Supply Chain Management

Vendor selection is an established problem in supply chain management. It is regarded as a strategic resource by manufacturers, which must be managed efficiently. Any inappropriate selection of the vendors may lead to severe issues in the supply chain network. Hence, the desire to develop a model that minimizes the combination of transportation, deliveries, and ordering costs under uncertainty situation. In this paper, a multi-objective vendor selection problem under fuzzy environment is solved using a fuzzy goal programming approach. The vendor selection problem was modeled as a multi-objective problem, including three primary objectives of minimizing the transportation cost; the late deliveries; and the net ordering cost subject to constraints related to aggregate demand; vendor capacity; budget allocation; purchasing value; vendors’ quota; and quantity rejected. The proposed model input parameters are considered to be LR fuzzy numbers. The effectiveness of the model is illustrated with simulated data using R statistical package based on a real-life case study which was analyzed using LINGO 16.0 optimization software. The decision on the vendor’s quota allocation and selection under different degree of vagueness in the information was provided. The proposed model can address realistic vendor selection problem in the fuzzy environment and can serve as a useful tool for multi-criteria decision-making in supply chain management.

Strategic issues in supply chain management of Indian SMEs due to globalization: an empirical study

Purpose

In globalized market, organizations of all sizes are having huge opportunities for growth. However, due to various resource constraints, it has become challenging for small and medium enterprises (SMEs) of growing economies to survive in this global competition. Effective supply chain management (SCM) can be a major driving factor for success of Indian SMEs in dynamic world economy. SMEs face many operational challenges while implementing effective SCM. The purpose of this paper is to study different strategic issues for successful implementation of SCM in Indian SMEs.

Design/methodology/approach

A survey has been conducted in Indian SMEs of different sectors. Major constructs of survey instrument are motivations, hindrances, investment priorities, supply chain practices and performance. In total, 1,500 Indian SMEs have been approached for collecting response through survey instrument. 257 complete responses were finalized. Statistical analysis of data acquired from survey is performed by using SPSS software.

Findings

It is observed that managing customers, organization resources, and inventory are main SCM practices. Major investment areas are systems for developing quick response and quality management. Currently, human resource and knowledge management have been found to be less priority areas for SMEs. The major focus of Indian SMEs is on cost and lead time reduction by having effective SCM.

Originality/value

Novelty of this study is that strategic issues for effective SCM in context to Indian SMEs have been analyzed. The findings of the study will help Indian SMEs in doing strategic planning for being competitive in the global market.

Dynamic supplier selection through optimal ranking under two-echelon system

Purpose

With the increasing competition among the industries, they remain under pressure as how to select the best set of suppliers for the competitive edge. Often, it has been challenging to develop an effective set of suppliers due to varied and asymmetric mode of criteria. The purpose of this paper is to develop a responsive chain under original equipment manufacturer (OEM).

Design/methodology/approach

This study proposes a responsive chain under a two-echelon system (TES) of OEM, which needs to collaborate with a set of suppliers at each echelon through an integrated methodology of AHP and TOPSIS. According to the OEM’s criteria, demands and suppliers’ capacity vary with time, therefore they are not static for a longer period. Hence, supplier selection (SS) problem possesses dynamicity in real practice. For this, MILP is used for finding optimal order quantities based on the optimal ranking at each echelon in the multi-period scenario. Subsequently, sensitivity analysis (SA) is conducted through Taguchi method of parameter design (TMPD) to achieve an optimal ranking in the TES.

Findings

This study suggests optimal criteria’s weight, percentage contribution, and flexibility for the suppliers and manufacturers involving through maximum demand strategy at each echelon of OEM. It also provides robust group of suppliers and manufacturers in the TES through optimal ranking and simultaneously in the order allocations. Furthermore, it restricts the number of suppliers and manufactures at each echelon through proposed methodology to obtain the solution in a very short running time.

Originality/value

To validate this model, a real data set for the case of chain conveyor company is used. This adopted methodology can suggest the organization that how the approach should be implemented.

A holistic approach to supplier evaluation and order allocation towards sustainable procurement

Purpose

The purpose of this paper is to propose a holistic approach for supplier evaluation and purchasing order allocation among the ranked suppliers who meet acceptable levels of economic, environmental and social measures.

Design/methodology/approach

A mixed research method of case study and analytical approach is adopted in this research. A fuzzy analytical hierarchical process (FAHP) is applied for ranking of suppliers. Supplier ranks are validated using judgements from multiple decision makers. Purchasing order allocation among the ranked suppliers is determined using cost minimization subject to multiple criteria of economic, environmental and social conditions. A cement manufacturing case example demonstrates and validates the proposed approach.

Findings

The research shows that both economic and environmental considerations are significant when suppliers are evaluated for sustainable procurement within the best practice of supply management process. Ranking of suppliers, based on experts’ opinions, indicates varying degrees of importance for each criterion. Adoption of sustainable procurement criteria for evaluating supplier in a cement manufacturing organization is explained by three organizational theories including resource-based, institutional and dynamic capabilities theories. Preferred suppliers from FAHP method are confirmed by judgements from multiple decision-makers. The analysis reveals that purchasing order allocation is different when suppliers are evaluated based on their relative importance and overall ranking.

Research limitations/implications

Currently, individual performance measures and decision-makers are selected from a limited set. The purchasing allocation among ranked suppliers, subjected to cost minimization, incorporates environmental objective of acceptable carbon dioxide emission and social perspective of health and safety of workers, and provides a new approach for dual supplier evaluation and purchasing allocation problem in cement industry. Adopting the proposed supplier evaluation and order allocation approach in practice needs to be guided by the operational principles and an overall methodology which is appropriate for the specific industry with sustainability objectives.

Practical implications

This research enables decision-makers to incorporate sustainability analysis in the supplier evaluation as the basis for best practice with an industry-friendly holistic approach. Using organizational theories, the research re-enforces the importance of not only the energy consumption and environmental management systems of environmental dimension as driving forces/factors from Institutional theory perspective, but also pollution controls and prevention as purchasing capabilities from resource-based theory perspective. The proposed approach is expected to motivate decision-makers to consider sustainable perspectives in supplier evaluation and order allocation processes in a global supply chain and can become a benchmarking tool.

Social implications

Suppliers’ information on health and safety of their truck drivers are used in order allocation, thus emphasizing the importance of social dimension and encouraging better conditions and benchmarking for delivery drivers.

Originality/value

This paper extends the contribution to the literature by providing guidelines for managers to set strategies, benchmarks and policies within broader sustainable supply chain practices and demonstrates the applicability of the approach using a cement-manufacturing scenario in an emerging economy.