Supplier selection in pharmaceutical industry: An analytic network process approach

Abstract

Purpose

Evaluating and selecting the best among the offers provided by various suppliers is a complex problem that takes into account both tangible and intangible criteria, which incorporate interdependencies and feedback. The decision making is aggravated by the complexity of supply chain relationships and enterprise strategies especially within enterprise clusters. The aim of this paper is to present a comprehensive method for the evaluation and selection of suppliers' offers in parapharmaceutical industry clusters.

Design/methodology/approach

The proposed approach consists of two parts. The former is the comprehension of the supply chain processes within the parapharmaceutical industry in Greece, and the latter is the use of an analytic network process (ANP)‐based method for the selection of the best offer.

Findings

The proposed approach enables the decision maker to visualize the impact of various criteria on the final outcome and documents the evaluation results in such a way that they can be communicated to various stakeholders. The results indicate that quality‐related issues dominate the decision‐making process in the parapharmaceutical industry.

Research limitations/implications

The outcome of the model depends highly on the inputs provided by the decision maker. Moreover, the ANP method is computational intensive, but this limitation can be alleviated by appropriate software tools.

Originality/value

The proposed framework is considered to be an innovative approach for the parapharmaceutical industry as well as enterprise clusters. The criteria set here may be used for nearly every similar industry consisting of active clusters (for example, the apparel industry).

Citation

Kirytopoulos, K., Leopoulos, V. and Voulgaridou, D. (2008), "Supplier selection in pharmaceutical industry: An analytic network process approach", Benchmarking: An International Journal, Vol. 15 No. 4, pp. 494-516. https://doi.org/10.1108/14635770810887267