Off-Line and User-Oriented Approach for Supplier Selection in Dynamic Environment: A Case Study in the Healthcare Services
- 1
- 2
- 3
- 4
Abstract
Evaluating and selecting supplies are critical activities in the process of purchasing and supplying materials. Many manufacturing and service organizations operate in a constantly changing business environment and occasionally have to reconsider their steps in terms of supplier selection. This paper offers a methodology that takes into account the impact of a dynamic business environment on the supplier selection process. This methodology represents an applicable tool supported by decision for the planned selection of a single supplier that changes with time out of a supplier group over a finite planning horizon. The suggested methodology has been tested in a large Israeli organization-Clalit Health Services, which comprises large-scale logistical entity working with hundreds of suppliers on an ongoing basis. Our analysis of application results shows that the suggested strategy of switching suppliers over a predefined planning horizon according to the business environment forecast is over 10% more efficient compared to a strategy that does not change the leading supplier throughout the planning horizon. This average improvement is translated into expected efficiency gains on most operative dimensions which represent selection parameters, such as cost per unit, supply lead-time, reputation and more. Nevertheless, some of their value is lost due to some dimensions.
- K. S. Bhutta and F. Huq, “Supplier Selection Problem: A Comparison of the Total Cost of Ownership and Analytic Hierarchy Process,” Journal of Supply Chain Management, Vol. 7, No. 3, 2002, pp. 126-135.
- V. Jayaraman, R. Srivastava and W.C. Benton, “Supplier Selection and Order Quantity Allocation: A Comprehensive Model,” Journal of Supply Chain Management, Vol. 35, No. 2, 1999, pp. 50-58.
- N. D. Singpurwalla, “A Probabilistic Hierarchical Classification Model for Rating Suppliers,” Journal of Quality Technology, Vol. 31, No. 4, 1999, pp. 444-454.
- L. J. Bourgeois, “Strategy and Environment: A Conce- ptual Integration,” The Academy of Management Review, Vol. 5, No. 1, 1980, pp. 25-39.
- R. B. Duncan, “Characteristics of Organizational Envir- onments and Perceived Environmental Uncertainty,” Administrative Science Quarterly, Vol. 17, No. 3, 1972, pp. 313-327.
- C. A. Weber, J. R. Current and W. C. Benton, “Vendor Selection Criteria and Methods,” European Journal of Operations Research, Vol. 50, 1991, pp. 2-18.
- E. Timmerman, “An Approach to Supplier Performance Evaluation,” Journal of Purchasing and Materials Management, Vol. 22, No. 4, 1986, pp. 2-8.
- L. E. Crow, R. W. Olshavsky and J. O. Summers, “Industrial Buyers’ Choice Strategies: A Protocol Analysis,” Journal of Marketing Research, Vol. 17, No. 1, 1980, pp. 34-44.
- C. C. Li, Y. P. Fun and J. S. Hung, “A New Measure for Supplier Performance Evaluation,” Institute of Industrial Engineering, Vol. 29, No. 9, 1997, pp. 753-758.
- K. N. Thompson, “Scaling Evaluative Criteria and Supplier Performance Estimates in Weighted Point Pre-Pur- chase Decision Models,” International Journal of Purchasing and Materials Management, Vol. 27, No. 1, 1991, pp. 27-36.
- G. W. Dickson, “An Analysis of Supplier Selection: Systems and Decisions,” Journal of Purchasing, Vol. 2, No. 1, 1966, pp. 5-17.
- R. M. Monczka and S. H. Trecha, “Cost-Based Supplier Performance Evaluation,” Journal of Purchasing and Materials Management, Vol. 24, No. 1, 1988, pp. 2-8.
- C. Muralidharan, N. Anatharaman and S. G. Deshmukh, “A Multi-Criteria Group Decision Making Model for Supplier Rating,” Journal of Supply Chain Management, Vol. 38, No. 4, 2002, pp. 22-33.
- A. C. Pan, “Allocation of Order Quantity among Suppliers,” Journal of Purchasing and Material Management, Vol. 25, No. 3, 1989, pp. 36-39.