Structured methodology for supplier selection and evaluation in a supply chain

Supply chain management (SCM) is one of the most important competitive strategies used by modern enterprises. The main aim of supply chain management is to integrate various suppliers to satisfy market demand. Meanwhile, supplier selection and evaluation plays an important role in establishing an effective supply chain. Traditional supplier selection and evaluation methods focus on the requirements of single enterprises, and fail to consider the entire supply chain. Therefore, this study proposes a structured methodology for supplier selection and evaluation based on the supply chain integration architecture. In developing the methodology for supplier selection and evaluation in a supply chain, enterprise competitive strategy is first identified using strengths weaknesses opportunities threats (SWOT) analysis. Based on the competitive strategy, the criteria and indicators of supplier selection are chosen to establish the supplier selection framework. Subsequently, potential suppliers are screened through data envelopment analysis (DEA). Technique for order preference by similarity to ideal solution (TOPSIS), a multi-attribute decision-making (MADA) method is adapted to rank potential suppliers. Finally, the Taiwanese textile industry is used to illustrate the application and feasibility of the proposed methodology. This study facilitates the improvement of collaborator relationships and the management of potential suppliers to help increase product development capability and quality, reduce product lifecycle time and cost, and thus increase product marketability. (C) 2010 Elsevier Inc. All rights reserved.