Development of the supplier selection model - A case study in the advanced technology industry

Abstract

Because of the pressure of globalization in the last two decades, outsourcing activities has become an important strategic decision so that supplier selection is a prime concern. In fact, the selection problem is more crucial for the manufacturers of sophisticated semiconductor assembly equipments, as it is a multi-item, multi-person and multi-criterion decision problem. Among the reported literature, the analytic hierarchy process (AHP) has been recognized as an appropriate tool to tackle the said problem. In this paper, a case study is reported to illustrate an innovative model which adopts AHP and quality management system principles in the development of the supplier selection model. The proposed model can provide not only a framework for the organization to select supplier but also capability to deploy the company strategy to suppliers. Added to this, it also has flexibility to respond to the changing needs of the organization due to dynamic business environment. Through an illustration of the proposed model, it is found that the supplier selection problem can be solved in a structural and timely manner.