A combined methodology for supplier selection and performance evaluation

Today, organizations that wish to carry on the sustainable growing need a robust strategic performance measurement and evaluation system because of changing demands of consumers, reduced product life cycle, competitive and globalised markets. In this study, a new methodology is introduced and proposed for increasing the supplier selection and evaluation quality. The new approach considers both qualitative and quantitative variables in evaluating performance for selection of suppliers based on efficiency and effectiveness in one of the biggest car manufacturing factory in Turkey. This new methodology is realized in two steps. In the first stage, qualitative performance evaluation is performed by using fuzzy AHP (Analytical Hierarchical Process) in finding criteria weights and then fuzzy TOPSIS (Technique for Order Preference by Similarity to Ideal Solution) is utilized in finding the ranking of suppliers. So, qualitative variables are transformed into a quantitative variable for using in DEA (Data Envelopment Analysis) methodology as an output called quality management system audit. In the second stage, DEA is performed with one dummy input and four output variables, namely, quality management system audit, warranty cost ratio, defect ratio, quality management. As a result, comparing with the present system applied by the car factory, the new method seems to be some advantages and superiorities for making the decision in buying the quality car luggage side part (panel) by selecting the suitable supplier(s) in an automotive factory of Turkey. 2010 Elsevier Ltd. All rights reserved.