A loyalty-based approach to supplier selection

Communication between manufacturers and suppliers is crucial parameter in supply chain management philosophy. Previous researches suggest some qualitative and quantitative factors that impact on supply chain performance and incorporate multiple techniques into an evaluation process in order to select competitive suppliers. Loyalty is the most important criteria in the industries that need a long-term relationship and a degree of trust. It results in encouraging the supplier to expand effort on investment in buyers for specific technology and design collaboration. On the other hand loyalty assures producer to invest on a special method of production. In this paper, we use a hybrid method, incorporating multiple techniques into an evaluation process, in order to select competitive suppliers in a supply chain base on some qualitative and quantitative factors and loyalty as an essential criterion. We utilize an Analytic Hierarchy Process (AHP) to assign weights to the qualitative criteria and Data Envelopment Analysis (DEA) for measuring performance efficiency. Finally, we propose a supplier map and use it to select best supplier in the supply chain.

Keywords:

Supply Chain Management (SCM) , Supplier selection , Loyalty , Analytic Hierarchy Process (AHP) , Data Envelopment Analysis (DEA)