Procedure for supplier selection based on Cpm applied to super twisted nematic liquid crystal display processes

The loss-based process capability index C _pm , sometimes called the Taguchi index, has been proposed to the manufacturing industry as a method to measure process performance. The index C _pm takes into account the targeting degree of the process, which essentially measures process performance based on average process loss. Based on the C _pm index, a mathematically complicated approximation method was developed previously for selecting a subset of processes containing the best supplier from a given set of processes. The present paper implements this method and develops a practical step-by-step procedure to aid supplier selection decisions. The accuracy of the selection method is investigated using a simulation technique. The accuracy study provides useful information about the sample size required for a designated selection power. A two-phase selection procedure is developed to select a better supplier and to examine the magnitude of the difference between the two suppliers. Also investigated is a real-world case on the super twisted nematic liquid crystal display manufacturing process, and it is applied to the selection procedure using actual data collected from the factories to reach a decision in supplier selection.     

Employing dynamic fuzzy membership functions to assess environmental performance in the supplier selection process

The proposed system illustrates that logic fuzzy can be used to aid management in assessing a supplier's environmental performance in the supplier selection process. A user-centred hierarchical system employing scalable fuzzy membership functions implement human priorities in the supplier selection process, with particular focus on a supplier's environmental performance. Traditionally, when evaluating supplier performance, companies have considered criteria such as price, quality, flexibility, etc. These criteria are of varying importance to individual companies pertaining to their own specific objectives. However, with environmental pressures increasing, many companies have begun to give more attention to environmental issues and, in particular, to their suppliers’ environmental performance. The framework presented here was developed to introduce efficiently environmental criteria into the existing supplier selection process and to reflect on its relevant importance to individual companies. The system presented attempts to simulate the human preference given to particular supplier selection criteria with particular focus on environmental issues when considering supplier selection. The system considers environmental data from multiple aspects of a suppliers business, and based on the relevant impact this will have on a Buying Organization, a decision is reached on the suitability of the supplier. This enables a particular supplier's strengths and weaknesses to be considered as well as considering their significance and relevance to the Buying Organization.     

A four-phase AHP–QFD approach for supplier assessment: a sustainability perspective

Recently, companies have become increasingly aware of the need to evaluate suppliers from a sustainability perspective. Introducing the triple bottom line (economic, social, and environmental performance) into supplier assessment and selection decisions embeds a new set of trade-offs, complicating the decision-making process. Although many tools have been developed to help purchasing managers make more effective decisions, decision support tools, and methodologies which integrate sustainability (triple bottom line) into supplier assessment and selection are still sparse in the literature. Moreover, most approaches have not taken into consideration the impact of business objectives and requirements of company stakeholders on the supplier evaluation criteria. To help advance this area of research and further integrate sustainability into the supplier selection modelling area, we develop an integrated analytical approach, combining Analytical Hierarchy Process (AHP) with Quality Function Deployment (QFD), to enable the ‘voice’ of company stakeholders in the process. Drawing on the sustainable purchasing strategy development process, our AHP–QFD approach comprises four hierarchical phases: linking customer requirements with the company's sustainability strategy, determining the sustainable purchasing competitive priority, developing sustainable supplier assessment criteria, and lastly assessing the suppliers. An illustrative example is provided to demonstrate the application of the proposed approach.     

Supplier selection by testing the process incapability index

In the competitive global business environment of the 21st century, enterprises must respond effectively to customer demands. The selection of suppliers and the evaluation of their performance are becoming major challenges that face manufacturing managers. Assessing a group of suppliers and selecting one or more of them is a complex task because various criteria must be considered in the decision making process. Quality is an essential factor in qualifying a corporation to enter the marketplace. In fact, the quality of parts obtained from suppliers determines the quality of the finished product. Hence, quality is the fundamental factor for supplier evaluation among various criteria. This study applies the process incapability index C_pp to develop an evaluation model that assesses the quality performance of suppliers. The model simplifies the evaluation of suppliers, facilitates their effective selection, and provides insights into the process situation of suppliers who may enter into a long-term partnership with a company.     

Two-phase selection framework that considers production costs of suppliers and quality requirements of buyers

Buyers are faced with selecting the optimal supplier, while suppliers are left to consider production costs. In this study, we developed a two-phase selection framework that allows buyers to evaluate the performance of suppliers while taking production costs into account for value maximisation. This scheme is a win-win solution capable of promoting long-term relationships between buyers and suppliers. Under the assumption of normality, the first phase involves constructing a new Six Sigma quality capability analysis chart (SSQCAC) which takes production costs into account. The objective is to evaluate all potential suppliers using the 100?×?(1–α)% upper confidence limit (UCL) of an integrated Six Sigma quality index (SSQI) Q_PIh when dealing with products with smaller-the-better (STB), larger-the-better (LTB), or nominal-the-best (NTB) quality characteristics. According to interval estimation theory, this method can have a significant impact on the consumption of resources; i.e. the production costs of the supplier can be decreased by reducing the production quality to below that required by the buyer. The proposed method also filters out unsuitable suppliers in order to simplify the decision problem and reduce computational demands and operational risks/costs without compromising the quality of the final product. In the second phase, a detailed analysis is conducted using Euclidean distance measure to select the optimal supplier from among the remaining candidates. We conducted a real-world case study to evaluate the efficacy of the proposed method. We also conducted comparisons with existing methods to demonstrate the advantages of the proposed method and its managerial implications. Suggestions for future study are also provided.     

An improved approach for process performance evaluation with the consideration of process yield and quality loss

In recent years, several process capability indices have received considerable research attention and increased usage in evaluating process performance and purchasing decisions in manufacturing industries. In particular, the third-generation capability index C_pmk is constructed by taking process yield and quality loss into consideration. Unfortunately, the sampling distribution of the estimated C_pmk is complicated, making the establishment of the exact confidence interval very difficult. Thus, this study applies the concept of the generalised pivotal quantity (GPQ) to derive the generalised confidence interval (GCI) for the index C_pmk. To examine the performance and the effectiveness of the GCI approach, a series of simulations is undertaken. Three types of bootstrap methods are also implemented and compared with the proposed GCI approach. The results reveal that the proposed GCI approach is superior to the three bootstrap methods since the obtained coverage rates are very close to the nominal confidence level in most of our studied cases even for small sample sizes. Therefore, this article recommends the GCI approach for evaluating process performance in real applications.     

Buyer behaviours and the performance of the supply chain: An international exploration

This paper studies the effects of buyer?supplier interaction in a supply chain environment. It focuses on the effects of buyer behaviours (such as supplier selection, number of suppliers, percentage of outsourcing, and frequency of production changes) on the performance of the supply chain. Using data collected from machine tool manufacturers around the world, the various behaviours of buyers are examined to see how they induce or mitigate the degree of uncertainty experienced by suppliers and thus affect suppliers' delivery performance. In addition, it was investigated how such buyer behaviours could further affect the supply chain's ability to perform as expected. The statistical results suggest that many buyer behaviours that have no direct effect on buyer's performance can have a significant effect on their suppliers' performance. Specifically, buyer behaviours directly manifest in supplier performance and only indirectly manifest in their own performance. This can give the buyer the false impression that the supply base is harming performance, when the real problem is the way the buyer manages the supply chain. The results vary by region of the world, suggesting that any theory that links buyer behaviours to supplier performance will need to consider a firm location.     

Select better suppliers based on manufacturing precision for processes with multivariate data

Process capability indices have been widely used in the manufacturing industry for measuring process reproduction capability according to manufacturing specifications. Processes with univariate data have been investigated extensively, but are comparatively neglected for processes with multivariate data. Chou (Chou, Y.M., 1994. Selecting a better supplier by testing process capability indices. Quality Engineering, 6, 427–438) developed a procedure using univariate C_p to determine whether or not two processes are equally capable, which allows one to select the supplier with better quality. However, for processes with multiple characteristics, no methods are available for comparing two processes with multivariate data. In this paper, we consider the supplier selection problem based on manufacturing precision in which the processes involve multiple quality characteristics. We derive the distribution of the corresponding test statistic, and calculate critical values required for the comparison purpose. A real-world application is presented for justification.     

On the bootstrap confidence intervals of the process incapability index Cpp

The process incapability index C_pp is an indicator, introduced by Greenwich and Jahr-Schaffrath, for evaluating the capability of a process. When C_pp is applied to evaluate a process, estimating the confidence interval of C_pp is important for statistical inference on the process. Calculating the confidence interval for a process index usually needs the assumption about the underlying distribution. Bootstrapping is a non-parametric, but computer intensive, estimation method. In the present paper we report the results of a simulation study on the behavior of four 95% bootstrap confidence intervals (i.e. standard bootstrap, percentile bootstrap, biased-corrected percentile bootstrap, and biased-corrected and accelerated bootstrap) for estimating C_pp when data are from a specific Burr distribution, which is used to represent various probability distributions. A detailed discussion of the simulation results is presented and some conclusions are provided.     

Supplier Selection Based on Process Capability and Price Analysis

Supplier selection is an important part of supply chain management. Among the numerous methods that have been proposed, process capability index is considered to be the most effective technique for identifying quality parts. However, supplier selection should be carried out on the basis of quality and cost together. There is no easy tool available to evaluate the price and quality in an integrated manner. In this article, a new approach to supplier selection using capability index and price comparison (CPC) chart is presented. The CPC chart integrates the process capability and price information of multiple suppliers and presents them in a single chart. It provides a simple but effective method to consider quality and price simultaneously in the supplier selection process.     

Supplier selection for outsourcing from the perspective of protecting crucial product knowledge

This paper considers the supplier selection problem in terms of the characteristics of the products/processes to be outsourced. Emphasis is placed on the possible risk that may arise in sharing or transferring crucial product/process knowledge to suppliers during outsourcing. Two indices are employed to assess the suitability of a supplier for outsourcing a product/process. The first measures the supplier's capability for technological innovation in the products for which they offer outsourcing services, and includes investment in R&D projects and the ratio of R&D personnel to the total work force. The second index measures the supplier's practices in protecting its clients’ intellectual property rights, and includes corporate image, track record in protecting clients’ intellectual property rights, and compliance with internal and external requirements. These two indices are then used to classify suppliers into four major groups, which are in turn assigned to classes of components/processes depending on their strategic importance and vulnerability – a portfolio approach. The proposed portfolio approach has been validated via a substantial empirical study involving data for 401 parts, 216 suppliers, and 36 manufacturing companies operating in China.     

Maintenance supplier selection considering life cycle costs and risks: a fuzzy goal programming approach

In this study, we address a new variant of supplier selection problem named maintenance supplier selection problem faced by a manufacturer. The production system consists of different multi-component equipments whose maintenance activities require several components (parts) each of which could be provided by multiple suppliers. A multi-objective mathematical model is developed to decide about the supply base of each part as well as the purchasing quantity of each part from each selected supplier. The model accounts for the total life cycle costs of purchased parts and various risks threatening the candidate suppliers. A fuzzy/soft lexicographic goal programming approach with soft priorities between objectives is proposed to enable the decision-maker to make preferred trade-offs between objectives by which the effects of various risks in each phase of life cycle of procured parts are investigated. The capability and effectiveness of the proposed model is validated through a case study. Some sensitivity analyses are also carried out for investigating the impact of cost, risk and objectives’ priorities on the final preferred compromise solution. Finally, some managerial insights and concluding remarks are provided.     

Integrated model for supplier selection and negotiation in a make-to-order environment

The paper deals with the development of an integrated supplier selection and negotiation process for multiple parts/materials procurement. The main objective is to integrate decisions in the internal supply chain of a make-to-order manufacturer. Two main decisions during the negotiation process are considered: (1) the manufacturing planning decision responsible for determining the production schedule and fabrication lot size and (2) the supplier selection decision concerning which suppliers are selected for company business and the order volume allocated to each selected supplier. The model is designed to support the negotiation process by generating a set of effective alternatives in each negotiation period. Its structure is multi-objective and non-linear. The combination of the interactive weighted Tchebycheff method and Benders decomposition method is applied to generate a set of effective alternatives to support the decision-maker in each negotiation period.     

Supplier Selection Critical Decision Values for Processes with Multiple Independent Lines

The process yield is the most common criterion considered for decision making in supplier selection problem. For normally distributed processes with multiple independent lines, the index provides an exact measurement for the overall yield. Therefore, the index can be implemented to deal with the supplier selection problem with processes having multiple independent lines. In this article, a test statistic obtained by a division method is employed to establish a hypothesis testing procedure, with two phases, which is developed to determine whether two suppliers are equally capable or not. The sampling distribution and the probability density function of the test statistic are derived. For various minimum requirements of process capability, number of lines, sample sizes, magnitudes of the difference between the two suppliers and the type I error, the critical values for decision making are presented. The required sample sizes for various designated powers at given type I error are tabulated. A thin‐film transistor type liquid‐crystal display application example is provided to demonstrate the testing procedure. Copyright © 2012 John Wiley & Sons, Ltd.     

Supply chain network design with unreliable suppliers: a Lagrangian relaxation-based approach

This paper deals with the integrated facility location and supplier selection decisions for the design of supply chain network with reliable and unreliable suppliers. Two problems are addressed: (1) facility location/supplier selection; and (2) facility location/supplier reliability. We first consider the facility location and supplier selections problem where all the suppliers are reliable. The decisions concern the selection of suppliers, the location of distribution centres (DCs), the allocation of suppliers to DCs and the allocation of retailers to DCs. The objective is to minimise fixed DCs location costs, inventory and safety stock costs at the DCs and ordering costs and transportation costs across the network. The introduction of inventory costs and safety stock costs leads to a non-linear NP-hard optimisation problem. To solve this problem, a Lagrangian relaxation-based approach is developed. For the second problem, a two-period decision model is proposed in which selected suppliers are reliable in the first period and can fail in the second period. The corresponding facility location/supplier reliability problem is formulated as a non-linear stochastic programming problem. A Monte Carlo optimisation approach combining the sample average approximation scheme and the Lagrangian relaxation-based approach is proposed. Computational results are presented to evaluate the efficiency of the proposed approaches.     

产品生命周期过程(横向集成)供应商选择模型研究

通过分析集成化供应链管理环境下供应商选择过程,给出了选择指标体系及选择步骤。在此基础上,建立了“横向”集成型企业供应商选择的模糊综合评价选择模型。应用此模型可对选择最满意的供应商做出相应的决策。     

A model for performance monitoring of suppliers

The purchasing function is central to the strategic operations of effective supply chain management. This centrality is mainly due to the significant impact of material costs on profits, increased investments in inter-organizational advanced manufacturing and information technologies, and a growing emphasis on the just-in-time operations philosophy. The critical business processes of the purchasing function include supplier selection, negotiation of supply contracts, monitoring supplier performance, and acting as an interface between an organization and its suppliers. Within these core processes of purchasing, this paper narrows its scope to focus upon the supplier performance evaluation and monitoring process, which assists in maintaining effective customer-supplier linkages. While price has been traditionally considered as the single most important factor in evaluating suppliers, it has been agreed upon that value performance emphasis needs to include other important factors such as quality, delivery and flexibility. Given this evolving business competitiveness environment, the contribution of this research is threefold. First, it applies a new multi-criteria evaluation model for supplier performance evaluation by considering various performance criteria. Second, a proposed application extension of this model serves as a monitoring and control mechanism for the performance of suppliers, thus supporting continuous process improvement to achieve efficient customer-supplier relationships. Third, the paper presents this technique as a new methodological extension to data envelopment analysis research by improving the discriminatory power of an existing variable returns to scale model. The model and its application are demonstrated through a previously published illustrative case example.     

Outsourcing in non-developed supplier markets: a lean thinking approach

The benefits organisations can gain from outsourcing include cost savings and higher levels of innovation. On the other hand, outsourcing drawbacks include potential operations and performance issues such as capability and capacity problems. Some large organisations are pursuing the practice of outsourcing, more specifically, targeting global outsourcing from developing and low-wage countries. However, the perception of expected cost saving benefits when outsourcing to low-wage countries does not always reflect reality. A number of companies have failed to achieve the expected cost savings in sourcing from low-wage countries due to operational-level capability. The objective of this study is to develop an extended evaluation method that takes into account operational-level influence factors, in addition to the procurement factors, in the context of non-developed supplier markets. Our extended evaluation method of potential suppliers addressed the paradigm of ‘standard industry recipes’, by encompassing operational-level influence factors and integrating supplier value stream analysis into the evaluation and selection process of outsourcing. A survey was distributed to 369 international manufacturers. Operational levels were categorised into seven latent constructs: Customer Service/Sales, Purchasing, Production Planning and Control, Manufacturing Engineering, Shop Floor and Quality Control, Receiving and Shipping. Structural Equation Modelling (SEM) confirmed the seven constructs, but measuring items were reduced from 39 to 23 significant observed measuring items, compromising the supplier selection framework. Our proposed framework will help practitioners make better informed decisions in outsourcing from non-developed supplier markets.     

Comparing the lens displacement profile data by using the sequential approach for selecting alternative suppliers

The lens module is a critical part of the camera module. The quality of the lens module significantly influences the auto-focus and image stability functions of the camera module. A new approach that uses sequential tests is proposed to select the alternative suppliers that provide the qualified parts as the current supplier under the linear profile data. Having several qualified alternative suppliers can reduce the dependency on one supplier, improve bargaining power, and reduce capacity risk. The lens displacement that has a linear relationship with current is the quality characteristic for evaluating the lens module suppliers. To select the qualified alternative suppliers, the proposed sequential approach tests the profile difference between the current supplier and the investigated suppliers. The simulation results show that the power of the sequential approach is higher than the simultaneous confidence bands method in differentiating profiles. Last, the proposed approach is effectively applied to select the qualified alternative lens module suppliers for the camera module manufacturer. Procuring the lens module from the selected suppliers can maintain production quality and flexibility for the camera module manufacturer in practice.     

网络分析法(ANP)及其在供应商选择中的应用

解释了网络分析法(ANP)的原理,总结、精练出网络分析法的8个操作步骤,指出了网络分析法与层次分析法(AHP)的异同.在合理选择供应商评价准则的基础上,运用ANP方法构建了供应商选择的依存、反馈网络,克服了传统AHP方法中因假设元素间相互独立而偏离实际的缺陷.以本文的评价方法进行供应商选择将更为实际.