Strategic Evaluation of Supplier Candidates
Iivanainen, Mary (2023)
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023120133521
https://urn.fi/URN:NBN:fi:amk-2023120133521
Tiivistelmä
The current volatility of the external environment is placing global organisations and their supply chains under high pressure. This is particularly felt in the automotive electronics industry, where high customer requirements extend product development and qualification periods, and dependence upon semiconductor ICs requires the formation of strategic partnerships with upstream suppliers. Similar to other industries, the performance of these organisations is directly impacted by their ability to select suppliers which fulfil the strategic requirements of the organisation.
The objective of this action research was to develop a supplier selection tool which can be used by the case organisation to make efficient evaluation of the alignment of supplier candidates to the organisation’s strategy. The hybrid method of AHP-QFD (Analytic Hierarchy Process – Quality Function Deployment) was selected for the model of the selection tool. The tool was developed within a ten-day period of participatory workshops with managers and experts of the organisation and resulted in a tool with eighty-one selection criteria in the categories of strategic alignment, organisational & business capability, and quality & delivery performance & capability.
Additional objectives of the research were to test the tool and to collect the participant’s feedback, as a foundation for future development of the selection tool. The test was completed with an existing known supplier and the resulting evaluation matched the organisation’s expected level, indicating that the tool gives reliable results. The feedback from participants emphasised that the process for creating the tool was arduous and sometimes even “painful” because of the high count of evaluation criteria.
The high count of criteria was a detriment to both the creation and use of the tool. Re-aligning the tool to any strategic shifts would require significant resource commitment from the organisation. It is also time-consuming to collect the needed data from new unknown suppliers. Both situations could occur in the current volatile environment; therefore, a reduction and simplification of the evaluation criteria is recommended.
The objective of this action research was to develop a supplier selection tool which can be used by the case organisation to make efficient evaluation of the alignment of supplier candidates to the organisation’s strategy. The hybrid method of AHP-QFD (Analytic Hierarchy Process – Quality Function Deployment) was selected for the model of the selection tool. The tool was developed within a ten-day period of participatory workshops with managers and experts of the organisation and resulted in a tool with eighty-one selection criteria in the categories of strategic alignment, organisational & business capability, and quality & delivery performance & capability.
Additional objectives of the research were to test the tool and to collect the participant’s feedback, as a foundation for future development of the selection tool. The test was completed with an existing known supplier and the resulting evaluation matched the organisation’s expected level, indicating that the tool gives reliable results. The feedback from participants emphasised that the process for creating the tool was arduous and sometimes even “painful” because of the high count of evaluation criteria.
The high count of criteria was a detriment to both the creation and use of the tool. Re-aligning the tool to any strategic shifts would require significant resource commitment from the organisation. It is also time-consuming to collect the needed data from new unknown suppliers. Both situations could occur in the current volatile environment; therefore, a reduction and simplification of the evaluation criteria is recommended.