Multi-criteria decision framework for supplier classification in collaborative supply chains

Abstract

Purpose – Buyer companies’ engagement with suppliers varies according to their specific business needs. Prior models of supplier classification are based on the dimensions like product specification or criticality of purchase. As the supply chains are embracing collaboration among partners to respond to the dynamic market conditions, it is prudent to study the changes adopted by buyer companies for supplier classification. The paper aims to discuss these issues. Design/methodology/approach – This is an exploratory research for identifying the criteria used for supplier classification based on the interviews of practitioners from buyer multinational manufacturing companies operating in India. The content analysis of the subjective responses led to the identification of distinctive criteria. Findings – Although, many of the practitioners were unaware of the model per se, they labelled their suppliers as per the types stated in the Kraljic model. They mentioned twenty six criteria for supplier classification; five of which do not have any reference in the extant literature. The degree of presence of these criteria provides a multi-criteria framework for supplier classification that has been further extended based on prior models. Research limitations/implications – The exploratory nature of the study, its confinement to Indian milieu and small sample size could limit the generality and exhaustiveness of the findings. Practical implications – The framework and its extension can be used by practitioners in assessing and classifying their suppliers for strengthening supply chain collaboration. Originality/value – This research unveils five new criteria used by buyer companies for supplier classification. The multi-criteria framework for supplier classification and its extension give new insights into the supplier characteristics significant for supply chain collaboration.

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