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Article

Rodrigo Restrepo and Juan G. Villegas

The purpose of this paper is to present a case study in which data envelopment analysis (DEA) is used to evaluate and classify the suppliers of a Colombian motorcycle…

Abstract

Purpose

The purpose of this paper is to present a case study in which data envelopment analysis (DEA) is used to evaluate and classify the suppliers of a Colombian motorcycle assembly company. This tool allows the integration of several attributes into single performance measures (cross-efficiency and diversity efficiency) and subsequent classification based on the values obtained for these two metrics.

Design/methodology/approach

The classification uses a methodology based on two main tools. The first is an input-oriented cross-efficiency DEA model with ordinal variables to evaluate the suppliers’ performance, and the second is a classification of these into categories that identifies those with good performance for features that make them outstanding.

Findings

The assembly company segments its suppliers according to supply frequency. The results show that suppliers working under a just-in-time system achieve superior performance with respect to other suppliers.

Practical implications

The application of this methodology in a real-world case illustrates how DEA can be a useful tool to support the evaluation and classification of suppliers (a process of increasing complexity given the current trend to include multiple strategic measures together with classical operational measures). Moreover, the methodology illustrated in the study can be adapted to other similar settings.

Originality/value

The main contributions of this paper are twofold. First, to the best of our knowledge, this is the first study to illustrate the use of DEA in a real case related to supplier evaluation. Second, the presence of ordinal variables (e.g. quality or environmental ratings) gives rise to DEA variants seldom used in this context.

Propósito

Este artículo presenta un caso de estudio en el que se utiliza análisis envolvente de datos (DEA) para evaluar y clasificar los proveedores de una ensambladora colombiana de motocicletas. Dicha herramienta permite integrar múltiples atributos en dos medidas de desempeño (eficiencia cruzada y de diversidad) y la posterior clasificación de éstos con base en los valores obtenidos para ambas medidas.

Diseño/metodología/enfoque

La clasificación usa una metodología basada en dos herramientas. La primera es un modelo DEA de eficiencia cruzada orientado a las entradas con variables ordinales que se usa para evaluar el desempeño de los proveedores. La segunda es una clasificación de los proveedores en categorías para identificar aquellos con buen desempeño en algunas características que los hacen sobresalientes.

Resultados

La compañía segmenta sus proveedores de acuerdo con la frecuencia de abastecimiento. Los resultados muestran que los proveedores que operan bajo justo a tiempo (Just-in-time, JIT) tienen un desempeño superior con respecto a los demás proveedores.

Implicaciones prácticas

La aplicación de esta metodología en un caso real ilustra como DEA es una herramienta útil para apoyar la evaluación y clasificación de proveedores (un proceso de complejidad creciente gracias a la tendencia actual de incluir medidas estratégicas junto a las medidas operacionales comúnmente utilizadas). Además, la metodología utilizada puede adaptarse fácilmente a otras situaciones similares.

Originalidad/valor

Las contribuciones de este artículo son dos. Primero, hasta donde sabemos, este es el primer estudio que ilustra el uso de DEA en un caso real de evaluación de proveedores. Segundo, la presencia de variables ordinales (por ejemplo, evaluaciones de calidad y medioambiente) resultan en modelos DEA que son poco utilizados en este contexto.

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Article

Saurabh Pratap, Yash Daultani, Ashish Dwivedi and Fuli Zhou

E-commerce refers to the facilitation and delivery of goods and services to the customers employing an electronic arrangement. For an e-commerce firm, the customer service…

Abstract

Purpose

E-commerce refers to the facilitation and delivery of goods and services to the customers employing an electronic arrangement. For an e-commerce firm, the customer service level provided by its suppliers can make or break the firm. The purpose of this research is to help e-commerce enterprises in addressing the vast challenge of complex supplier selection and evaluation process that must be performed vigilantly.

Design/methodology/approach

The present study utilizes a three-pronged approach that integrates supplier management practices with the operational business practices of an e-commerce enterprise. In the first step, key performance factors for e-commerce capable suppliers are identified through an expert opinion and existing supplier management literature. Further, Data Envelopment Analysis (DEA) is employed to obtain the efficiency score for each supplier that enables their ranking on various performance parameters. Lastly, the suppliers are classified into different categories based on their performance and efficiency.

Findings

Under the proposed classification scheme, top five suppliers, i.e. supplier 1, 7, 9, 11 and 17 are categorized as HE (High Performance and Efficient). It is suggested that e-commerce enterprises must build long-term relationship with the identified top performing suppliers. The study also provides real insights into supplier's performance on a number of objective criteria. Further, the present study enhances the overall performance and productivity of an e-commerce firm by achieving input cost minimization and output quality maximization, simultaneously.

Research limitations/implications

The results are valid for e-commerce enterprises in general. However, the present DEA model can be further evolved when applied in case of any particular e-commerce enterprise depending upon the internal capabilities of that firm. The nuances related to a firm's own supply capability development can be further explored by practitioners and researchers.

Practical implications

The proposed approach is expected to motivate decision-makers to consider using more sophisticated approached like DEA in supplier evaluation processes. Also, as a benchmarking technique, the proposed supplier classification approach is expected to be highly useful for practitioners in real-life settings.

Originality/value

The novel contribution of this study includes the supplier evaluation, ranking and classification for e-commerce enterprises based on the real-life data. The insights would help the practitioners to formulate novel strategies for appropriately investing in supplier relationships.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

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Article

Kuang‐Hsun Shih, Hsu‐Feng Hung and Binshan Lin

The purpose of this paper is to present a model and a supporting approach for effective supplier selection decisions.

Abstract

Purpose

The purpose of this paper is to present a model and a supporting approach for effective supplier selection decisions.

Design/methodology/approach

Structural equation modeling (SEM) and confirmatory factor analysis are applied to test the evaluation principles and samples. Next, the data tested by SEM is used for artificial neural network (ANN) by Likert and fuzzy scales to structure a classification model, accompanying with canonical discriminate analysis (CANDISC) to diminish variables. After the training and test of the model, multiple discriminate analysis is applied to compare the accuracy of the classification. Last, the CANDISC variable reduction method with ANN classification model utilized in the study is applied.

Findings

The supplier selection model designed with ANN classification model and fuzzy scales will be more effective than with the traditional statistics analysis.

Research limitations/implications

The new paradigm for decision making includes a combination of several effective methods and analysis.

Practical implications

This research provides an integrated model for internal auditors and managers to classify their supplier selection decisions.

Originality/value

This paper contributes to the new approach of the decision model building process for computer auditing and improves the classification accuracy effectively.

Details

Kybernetes, vol. 38 no. 9
Type: Research Article
ISSN: 0368-492X

Keywords

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Article

Juan José Tarí, José F. Molina-Azorín, Jorge Pereira-Moliner and María D. López-Gamero

This paper examines the relationships between: (1) motives for internalization of a quality system, (2) the internalization of a quality system and (3) customer results…

Abstract

Purpose

This paper examines the relationships between: (1) motives for internalization of a quality system, (2) the internalization of a quality system and (3) customer results, employee results and social results in public organizations by means of replication research

Design/methodology/approach

First, the work applies a quantitative study to test hypotheses using structural equations based on the Partial Least Squares (PLS) approach. Then, a qualitative study is carried out to support the quantitative results obtained

Findings

Results show that internal and external motives affect internalization, and that the most important issues for internalization are commitment, communication, training, recognition and follow-up. In addition, continuous improvement is key in order to enhance customer results, employee results and social results

Originality/value

The contribution of this work is that it provides empirical support to prior research on internalization focused on manufacturing and service organizations, and extends these results to the case of public organizations

Propósito

Este trabajo analiza la relación entre: a) los motivos para interiorizar un sistema de calidad, b) la interiorización de un sistema de calidad y c) los resultados de clientes, empleados y sociedad en organizaciones públicas, a través de un estudio que replica los análisis previos sobre interiorización realizados en organizaciones manufactureras y de servicios.

Diseño/metodología/enfoque

Interiorización de la calidad en organizaciones públicasPara conseguir este objetivo se realiza primero un estudio cuantitativo para comprobar las hipótesis a través de un análisis de ecuaciones estructurales desde el enfoque Partial Least Squares (PLS). Posteriormente se realiza otro estudio cualitativo para apoyar los resultados cuantitativos obtenidos.

Resultados

Los resultados muestran que los motivos internos y externos influyen en la interiorización y que los aspectos más importantes para interiorizar un sistema de calidad son la implicación, la comunicación, la formación, el reconocimiento y el seguimiento interno. Además, la mejora continua es clave para mejorar los resultados de clientes, empleados y sociedad.

Originalidad/valor

La contribución del trabajo es que proporciona apoyo empírico a los resultados de trabajos previos sobre interiorización centrados en organizaciones manufactureras y de servicios y extiende estos resultados al caso de organizaciones públicas.

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Article

Tritos Laosirihongthong, Premaratne Samaranayake and Sev Nagalingam

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…

Abstract

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.

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Article

Anuj Dixit, Srikanta Routroy and Sunil Kumar Dubey

Drug warehouses (DWs) play a crucial role in drug distribution of government-supported healthcare supply chain as it controls both the cost and responsiveness of the…

Abstract

Purpose

Drug warehouses (DWs) play a crucial role in drug distribution of government-supported healthcare supply chain as it controls both the cost and responsiveness of the logistics activities. The current study proposes a methodology using data envelopment analysis (DEA) to estimate the performance along different dimensions and was applied to 30 government-supported DWs.

Design/methodology/approach

This study employs DEA to evaluate the performance and relative technical efficiency of DWs. In this research, four inputs and six outputs are identified based on intensive literature review and discussion with all stakeholders of DWs. The inputs are warehouse storage capacity, temperature-controlled storage capacity, number of skilled employees and operational cost, while the outputs are fill rate, number of generic drugs, volume of drugs, consumption points, inventory turns ratio and time efficiency.

Findings

Results show that 30% DWs operate at the most productive scale size with 100% efficiency level while 47% DWs have a significant possibility for further enhancement in productive efficiency and 23% DWs should diminish their operational size to increase their productivity level. It was also found that achieving 100% operational productivity along warehouse space capacity needs significant effort, whereas other three inputs, namely temperature-controlled capacity, number of skilled employees and operational cost, require comparatively less effort. Similarly, it was observed that the performance along the fill rate and time efficiency is satisfactory, whereas the performance along other fours output variables (i.e. number of generic drugs, volume of drugs, consumption points and inventory turns ratio) needs to be improved.

Practical implications

The findings offer insights on the inputs and outputs that significantly contribute to efficiencies so that inefficient DWs can focus on these factors.

Originality/value

Although many issues related to DEA have been widely researched and reported, but no literature has been found for analysis of DWs in general and government-supported DWs specifically to find out efficiencies for supply chain performance improvement.

Details

Journal of Advances in Management Research, vol. 17 no. 4
Type: Research Article
ISSN: 0972-7981

Keywords

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Article

Lisa M. Ellram

Total cost of ownership is a methodology and philosophy which looksbeyond the price of a purchase to include many other purchaserelatedcosts. This approach has become…

Abstract

Total cost of ownership is a methodology and philosophy which looks beyond the price of a purchase to include many other purchaserelated costs. This approach has become increasingly important as organizations look for ways to better understand and manage their costs. Examines case studies of 11 firms which use total cost of ownership concepts in purchasing. Based on the case study data and the literature, barriers and benefits associated with the total cost of ownership approach are discussed. The total cost of ownership models used by the case study firms are classified by type as dollar‐based or value‐based, and an example of each is shown. The total cost of ownership models are then further classified by their primary usage: supplier selection or supplier evaluation. This cross classification reveals a strong relationship between model type and model usage. Concludes with a comparison of the models, recommendations for practitioners and a discussion of future research directions.

Details

International Journal of Physical Distribution & Logistics Management, vol. 25 no. 8
Type: Research Article
ISSN: 0960-0035

Keywords

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Article

Barry Shore and A.R. Venkatachalam

Competitive advantage is often determined by the effectiveness of an organization's supply chain, and as a result, the evaluation and selection of suppliers has become an…

Abstract

Competitive advantage is often determined by the effectiveness of an organization's supply chain, and as a result, the evaluation and selection of suppliers has become an increasingly important management activity. But the evaluation process is complex. The data that must be considered are both technical and social/organizational. Much of the data are difficult to obtain and ambiguous or vague to interpret. In addition, the dynamic global environment of changing exchange rates, economic conditions, and technical infrastructure, demand that the pool of potential suppliers be re‐evaluated periodically. Nonetheless, a rational process of evaluation must exist to select the most appropriate suppliers. This paper addresses one dimension of the evaluation process, the information sharing capability of potential supply chain partners. It is an especially important dimension since information technology is necessary to horizontally integrate geographically dispersed operations. Fuzzy logic, a subset of artificial intelligence, together with analytical hierarchy process is used to model this process and rank potential suppliers. It is an appropriate methodology to use for this application and has the potential to be used with other supply chain design decisions since it explicitly handles vague, ambiguous, and imprecise data.

Details

International Journal of Physical Distribution & Logistics Management, vol. 33 no. 9
Type: Research Article
ISSN: 0960-0035

Keywords

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Article

Finn Wynstra, Björn Axelsson and Wendy van der Valk

Most existing classifications of business services have taken the perspective of the supplier as opposed to that of the buyer. To address this imbalance, the purpose of…

Abstract

Purpose

Most existing classifications of business services have taken the perspective of the supplier as opposed to that of the buyer. To address this imbalance, the purpose of this paper is to propose a classification of business services based on how the buying company applies the service with respect to its own business processes.

Design/methodology/approach

The paper considers some specific aspects of the process of buying and exchanging business services, focusing on the everyday production and consumption of services as opposed to the initial purchasing and negotiation phases.

Findings

Earlier literature has developed similar, albeit less elaborate classifications, but does not provide detailed insight into how such classifications are related to differentiated buyer‐supplier interaction. This classification distinguishes between four business service applications; as a component, semi‐manufacture, instrument or consumable. For each of these four types of services, interaction has to achieve different objectives and consequently they differ with regards to required organizational resources in terms of required capabilities and buyer‐supplier interfaces.

Research limitations/implications

Primarily conceptual and exploratory in nature, this paper is intended as a review of existing literature and possible starting point for further empirical validation and theoretical refinement. The paper contends that the differences in application have a significant impact on interaction patterns, but this is not to say that other variables have no impact on buyer‐supplier interaction patterns. Subsequent research should seek to control for those other possible sources of variation.

Practical implications

The overall implication of this classification is that for different services, the buying company should assess how they are applied. Subsequently, it is relevant for firms to consider what functional aspects are crucial and who are likely to become, or who should be involved and to what extent, in the purchasing decision process and in the interactions that take place after the decision has been made.

Details

International Journal of Service Industry Management, vol. 17 no. 5
Type: Research Article
ISSN: 0956-4233

Keywords

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Article

Augusto Bianchini, Andrea Benci, Marco Pellegrini and Jessica Rossi

The purpose of this paper is to provide a flexible and extensible model for the classification of suppliers, within the purchasing guidelines and market trends of an…

Abstract

Purpose

The purpose of this paper is to provide a flexible and extensible model for the classification of suppliers, within the purchasing guidelines and market trends of an Italian small company, leader in the production of street lamps. The model is applied to identify critical supply chains with the final objective of lead-time reduction.

Design/methodology/approach

The model is obtained by the application of the purchasing portfolio analysis through the construction of Kraljic matrix. Profit impact and supply risk criteria are selected according to the main company requirements, and then prioritized by the analytical hierarchy process (AHP). Finally, supply chain lead-times are analyzed with Gantt diagrams.

Findings

The application of the model allows the determination of company criticalities in terms of high lead-times and of the involved suppliers. The analysis of critical suppliers positioning in the Kraljic matrix allows the definition of some possible strategies to implement for lead-time reduction.

Research limitations/implications

Purchasing portfolio analysis and Kraljic matrix are practical instruments to quickly frame company purchasing situation, but their application is not simple due to the numerous and different factors involved, especially in small and medium enterprises (SMEs), where resource are scarce and several constraints limit operations. The objective of the research is the development of a practical tool for strategic purchasing, simple and robust to be implemented in SMEs, with limited resources and access to quantitative supplier data.

Originality/value

Evaluation criteria definition is one of the most difficult phases, such as their univocal and quantitative comparison. The problem of selecting and prioritizing both quantitative and qualitative criteria for suppliers classification is overcome with the combined application of Kraljic matrix and AHP. The newly integration of the two methodologies allows the realization of a reliable and robust model for suppliers classification, which can be easily adapted to company business strategy changes.

Details

Benchmarking: An International Journal, vol. 26 no. 4
Type: Research Article
ISSN: 1463-5771

Keywords

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