Proposal for suppliers evaluation using the integration of AHP/QFD methods

Galiotto, Juliane Carolina; Cassel, Ricardo Augusto

doi:10.1590/0104-530X2178-20

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ORIGINAL ARTICLES • Gest. Prod. 27 (3) • 2020 • https://doi.org/10.1590/0104-530X2178-20 copy

Proposal for suppliers evaluation using the integration of AHP/QFD methods

Proposta para avaliação de fornecedores utilizando a integração dos métodos AHP/QFD

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract

The present work has as main objective the development and presentation of a model for supplier’s evaluation. The proposed model includes the criteria of the lean concept and provides a comprehensive analysis for decision-making in the area of supplies. The work involved 05 steps: (i) identify and select the main criteria for lean suppliers management; (ii) perform the weighting of criteria using the AHP (Analytic Hierarchy Process); (iii) define the indicators to be used for the suppliers analysis in every sub-criteria; (iv) calculate the relative weight of each indicator through the analysis of interdependence between the sub-criteria and indicators; (v) testing partially the model through the application of the same in a product group in the reality of a company. The main contribution of this paper is to propose a model that combines the method AHP (Analytic Hierarchy Process) used for multiple criteria decision-making method with QFD (Quality Function Deployment) able to translate these criteria in guidelines for the supply management. From a practical point of view, the importance of this article is to present a relatively simple model for the systematization of building supply indicators. The obtained results recommend the use of this template.

Keywords:
Supply indicators; Supplier’s qualification; Quality function deployment; Hierarchical analytical process

Criteria	Sub-criteria	Search sources
Quality	• Product quality (specifications).	Drake et al. (2013)Drake, P. R., Lee, D. M., & Hussain, M. (2013). The lean and agile purchasing portfolio model. Supply Chain Management, 18(1), 3-20. http://dx.doi.org/10.1108/13598541311293140. http://dx.doi.org/10.1108/13598541311293... , Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Product packaging.	Note of the company where the methodology will be apply.
	• Material expiry date.	Note of the company where the methodology will be apply.
Cost	• Price.	Chang & Hung (2010)Chang, B., & Hung, H. (2010). A study of using RST to create the supplier selection model and decision-making rules. Expert Systems with Applications, 37(12), 8284-8295.
	• Cost with Reworks.	Note of the company where the methodology will be apply.
	• Non-fulfillment cost of the order.	Note of the company where the methodology will be apply.
	• Payment term.	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
Delivery	• Delivery Performance.	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Flexibility	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Production capacity.	Chang & Hung (2010)Chang, B., & Hung, H. (2010). A study of using RST to create the supplier selection model and decision-making rules. Expert Systems with Applications, 37(12), 8284-8295.
	• Delivery time.	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Storage capacity	Chang & Hung (2010)Chang, B., & Hung, H. (2010). A study of using RST to create the supplier selection model and decision-making rules. Expert Systems with Applications, 37(12), 8284-8295.
	• Purchase Lots	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Location.	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
Relationship	• Technological capability.	Chang & Hung (2010)Chang, B., & Hung, H. (2010). A study of using RST to create the supplier selection model and decision-making rules. Expert Systems with Applications, 37(12), 8284-8295.
	• Support Services.	Chang & Hung (2010)Chang, B., & Hung, H. (2010). A study of using RST to create the supplier selection model and decision-making rules. Expert Systems with Applications, 37(12), 8284-8295.
	• Technological capacity.	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Communication systems.	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Corporate culture	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Ability to develop new products	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Financial stability	Chang & Hung (2010)Chang, B., & Hung, H. (2010). A study of using RST to create the supplier selection model and decision-making rules. Expert Systems with Applications, 37(12), 8284-8295.
	• Consistency with strategic objectives	Florent & Zhen (2010)Florent, T. M., & Zhen, H. (2010). Study on the supplier evaluation index system of lean supply chain. In Proceedings of the International Conference on e-Education, e-Business, e-Management and e-Learning (IC4E 2010). Los Alamitos: IEEE Computer Society. http://dx.doi.org/10.1109/IC4E.2010.23. http://dx.doi.org/10.1109/IC4E.2010.23... .
	• Infrastructure.	Chang & Hung (2010)Chang, B., & Hung, H. (2010). A study of using RST to create the supplier selection model and decision-making rules. Expert Systems with Applications, 37(12), 8284-8295.

Attribute	The_1st	A₂	...	In
The_1st	X₁₁= 1	X₁₂	...	X_1n
A₂	X₂₁= 1/x₁₂	X₂₂= 1	...	X_2n
...	...	...	...	...
In	X_n1= 1/x_1n	X_n2= 1/x_2n	...	X_nn= 1

Sub-criteria	Performance metrics
Product quality	• Supplier Compliance index: reflects the% of deliveries according to technical specifications of the product;
	• Evaluation of the quality system: reflects the quality certifications obtained by the supplier;
	• Analysis of non-conformities: Non-conformity numbers issued to the supplier/month;
	• Quantity Index: Batches received in the right amount over the total batches received.
Shipping packing	• Packaging Conformity index: reflects the% of products received with packaging conforming considering the total packaging received.
Term material validity received	• Expiry date: Reflects the% of products received with an acceptable shelf life when compared to the total material received.
Price	• Cost avoidance: cost reduction in punctual negotiations;
Price	• saving: cost reduction in the purchase of current items;
Rework Cost	• Rework Value: Cost of supplier goods reworking
Cost of orders’ non-fulfillment	• Cost due to lack of stock: reflects the margin of the lost sales value due to material’s lack;
Cost of orders’ non-fulfillment	• Premium freight: cost with premium freight due to supplier orders’ non-fulfillment.
Payment term	• Payment Terms: Payment term offered by the supplier.
Performance of deliveries	• Supplier's punctuality index: reflects the% of deliveries within the previously agreed deadline.
Flexibility	• Inventory turnover: reflects the amount of times the stock was use in a given period.
Production capacity	• Production capacity: reflects the% of available capacity that the supplier has to meet our demand.
Lead Time	• Order cycle time: reflects the time between the order date and the delivery date of the goods.
Storage capacity	•% storage capacity: reflects the% of storage capacity that the vendor has compared to our demand.
Purchase Lots	• Purchase lot range: reflects the number in days that the purchase lot will be in stock considering the material demand.
Location	• Transit time: Reflects the number of days from the date the merchandise was bill and the date it was receive in the company.
Technological capacity	• Business Relationship Index: Through a questionnaire assesses technological capacity, financial stability, support services, level of computerization, communication systems, corporate culture; ability to develop new products, consistency with strategic objectives, among others.
Support Services
Computerization level
Communication systems
Corporate culture
Ability to develop new products
Consistency with strategic objectives
Financial stability	• Financial Stability: Through the analysis of the results statements, provides a score on the financial stability of the supplier to fulfill the contract realized.
Infrastructure	• Supplier Infrastructure Score: Based on the analysis of the supplier's infrastructure, provide a score for it.

Note	Meaning of note
4	Ideal condition
3	Intermediate situation, high enough.
2	Meets the criteria sufficiently
1	Intermediate situation, low enough.
0	It does not have sufficient conditions

Weight	Importance
0.5	Small
1.0	Average
1.5	Great
2.0	Very large

Weight	Importance
0.5	Above competition
1.0	Similar to competition
1.5	Below the competition
2.0	Far below the competition

Weight	Importance
0.5	Very hard
1.0	Difficult
1.5	Moderate
2.0	Easy

Sub-criteria	Importance
Lead Time	3.41%
Flexibility	2.18%
Delivery Performance	13.61%
Price	24.78%
Payment term	4.82%
Product quality	51.19%

Sub-criteria	Performance indicator	Unit of Measure

Product quality	Vendor Compliance Index	%
Product quality	Analysis of non-conformities	%
Payment term	Payment term	Days
Lead Time	Request Cycle Time	Days
Flexibility	Inventory turnover	Days
Delivery Performance	Vendor Punctuality Index	%
Price	Saving	R$

Performance indicators	4	3	2	1	0
Order Cycle Time	< = 60 days	< = 90 days	< = 120 days	< = 150 days	> = 150 days
Vendor Punctuality Index	> = 99.99%	> = 98%	> = 95%	> = 90%	< = 90%
Saving	< = value previously defined by supplies	< = 1% more than the value previously defined by supplies	< = 2% more than the value previously defined by supplies	< = 3% more than the value previously defined by supplies	> = 3% more than the value previously defined by supplies
Terms of payment	> = 60 days	> = 30 Days	> = 15 days	> = 1 day	Advance payment
Vendor Compliance Index	> = 98%	> = 95%	> = 93%	> = 85	< = 85%
Analysis of non-conformities	0	< 1	< 2	< 3	< 4
Stock turnover	< = 30 days	< = 45 days	< = 60 days	< = 75 days	> = 75 Days

QUALITY MATRIX
If the X indicator is below the optimum condition, will it affect (how?) on the delivery criteria?	Order Cycle Time	Inventory turnover	Saving	Payment terms	Supplier quality conformity Index	Technical non-compliance analysis	Supplier Punctuality Index
Criteria	Indicators							IDI	EI	MI	IDI
Lead Time	9	1					1	3.41%	0.5	1	2.41%
Flexibility	3	9					1	2.18%	0.5	2	2.18%
Price			9	1				24.78%	2	0.5	24.78%
Payment term	1	1		9				4.82%	1.5	0.5	4.17%
Product quality					9	9		51.19%	2	0.5	51.19%
Delivery Guarantee	1	1			3	3	9	13.61%	2	0.5	13.61%
Specifications	< = 60days	< = 30 days	< = value previously defined by supplies	> = 60 days	< = 99.99%	< = 0	> = 98%
IQJ	0.0460	0.0398	0.2230	0.0623	0.5015	0.5015	0.1271
Dj	1.5	2.0	0.5	1.0	0.5	0.5	0.5
Bj	1.0	0.5	2.0	1.5	2.0	2.0	2.0
IQJ*	0.0564	0.0398	0.2230	0.0764	0.5015	0.5015	0.1271				1.53

Indicators	%	Score Supplier 1	Score Supplier 2	Score Supplier 3	Score Supplier 4
Order Cycle Time	0.0564	3	3	2	2
Inventory turnover	0.0398	4	3	3	1
Saving	0.2230	0	1	4	3
Payment terms	0.0764	3	3	2	2
Supplier quality conformity Index	0.5015	3	3	4	4
Technical non-compliance analysis	0.5015	3	3	4	3
Supplier Punctuality Index	0.1271	2	2	4	4
SQI		3.82085416	4.00405868	5.7976312	4.99344027
%		63%	66%	95%	82%

Universidade Federal de São Carlos Departamento de Engenharia de Produção , Caixa Postal 676 , 13.565-905 São Carlos SP Brazil, Tel.: +55 16 3351 8471 - São Carlos - SP - Brazil
E-mail: gp@dep.ufscar.br

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[1] Source: Elaborated by the author.