A trasilient decision making tool for vendor selection: a hybrid-MCDM algorithm

Abstract

Purpose Vendor selection is the main activity in a sourcing decision, which is a strategic decision in that it leads enterprises to eliminate costs and improve their performance. However, an inappropriate selection may compromise the financial and operational status of the enterprise. But vendor selection is a complex, multi-criteria decision-making process because different and conflicting criteria have to be considered and assessed in order to find consistent suppliers. Consequently, evaluating and selecting the best vendor is the key to successful business. Traditionally, vendors are normally selected on the basis of traditional criteria (TC), such as costs and quality, neglecting resilience criteria (RC) (e.g. agility and flexibility). Thus, enterprises ultimately realize that a selecting method which involves TC as the only ones is inefficient and needs to be changed. The paper aims to discuss this issue. Design/methodology/approach This study was set in motion by a problem in practice. It aims to provide a user-friendly decision-making tool for selecting the best vendor from a group which submitted their tenders for implementing a proposed radio frequency identification (RFID)-based passport tracking system (Dukyil et al., 2017). The main traditional and resilience (“trasilience” henceforth) selection criteria were identified in a unified framework in collaboration with experts in the institution. Next, the Decision-Making Trial and Evaluation Laboratory (DEMATEL) algorithm was used to determine the relative importance of each criterion and the weights thus obtained were integrated into the ELimination Et Choix Traduisant la REalité (ELECTRE) algorithm. The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) algorithm was also applied, to evaluate the performance of vendors and to select the best one. The qualitative evaluation of the criteria and the vendors was based on four decision makers. Finally, the Spearman’s rank correlation coefficient (SRCC) approach was applied to obtain the statistical difference between the ranking orders obtained from the two algorithms. Findings The efficiency of the proposed decision-making tool was evident from the real-case study of six tenders submitted for implementing a RFID-based passport tracking system. The SRCC also turned out a “very strong” association value between TOPSIS and ELECTRE. Practical implications The developed trasilient decision-making tool can easily be used to solve similar vendor or supplier selection problem. Moreover, other criteria can be added to fit other cases. Later, the tool was made available to the institution under study for solving future evaluation problems. Originality/value The literature shows that none of the previous papers presented an integrated trasilient approach that considers RC and TC simultaneously. This study presents a new trasilience tool for selecting a vendor.

Green sourcing in the era of industry 4.0: towards green and digitalized competitive advantages

“…They take the advantage of each approach to develop the most accurate and suitable models. For instance, Mohammed et al (2018) utilized a hybrid DEMATEL-TOPSIS-ELECTRE based model to evaluate the overall suppliers' state on the basis of traditional business and resilience performance. Dobos and Vorosmarty (2014) used Data Envelopment Analysis (DEA) as a linear mathematical modelling technique to appraise the suppliers' environmental efficiency.…”

“…Supplier evaluation and selection is one of the most challenging duties in supply chain management appreciating the truth that purchasing of raw materials and products may stand for 75% of a firm's initial capital costs (Mohammed et al, 2018). Hence, ineffective supplier selection may distress the firm's revenue.…”

Enhancing Company Financial Transparency for Contractor Selection Process through XBRL: A Conceptual Framework

“…Contractor selection process conventionally focused so much on the deliverables of the contractor. Mohammed, Harris, & Dukyil (2019), identified that traditional criteria (TC) for contractor selection are typical via performance based on cost and quality (please see Figure 1). That study proposed CS to also, take Resilience Criteria (RC) as a critical consideration.…”

Performance of TV programs: a robust MCDM approach

“…Traditionally, MCDM techniques have been popular in the financial sector (Ferreira et al , 2019). This research builds on recent works that applied TOPSIS to non-convectional MCDM problems, such as assessing and ranking the educational quality of free online instructional videos (Acuña-Soto et al , 2019), selecting the best vendor considering traditional and resilience criteria simultaneously (Mohammed et al , 2019), and integrating corporate social responsibility valuations with the financial performance of companies (Bilbao-Terol et al , 2019). Therefore, this study answers recent calls to alert practitioners and researchers to the practical applications of the MCDM approach (Ferreira et al , 2019) by creating a relevant tool to analyze the performance of TV programs and bringing lessons to the TV industry of how their products can be improved.…”

“…Recently, TOPSIS has been applied to examine the impact of perceived social media marketing activities on customer loyalty via customer equity drivers in an e-commerce context (Yadav et al , 2019), to optimize cryo-treated electrical discharge machining variables (Mohanty et al , 2018), to evaluate the performance of vendors to then select the best one (Mohammed et al , 2019), and the energy efficiency drivers in South Africa (Aye et al , 2018).…”