Document Type : Original Article
Professor, University of Tehran.
Ph.D Student, University of Tehran.
In this paper, inspired by a real case study, a hierarchical approach is presented for supplier development and supporting its critical decisions in each stage. Supplies needing development and their eligible suppliers for development are first identified using the best-worst multi-criteria decision-making method. The related decision criteria are selected based on the literature review and subjective opinions of procurement experts. Finally, a bi-objective mathematical model is proposed for selecting and allocating candidate development plans to each candidate supplier. The objectives of the proposed model include maximizing the degree of achievement of the development goals of the buyer and maximizing the net present value of the development plans’ portfolio (i.e. the selected development plans for eligible suppliers). The computational results and derived managerial insights demonstrate the effectiveness and applicability of the proposed approach and its ability to support supplier development decisions for the buyer.
- Aboutorab, H., Saberi, M., Asadabadi, M. R., Hussain, O., & Chang, E. (2018). ZBWM: The Z-number extension of Best Worst Method and its application for supplier development. Expert Systems with Applications, 107, 115–125.
- Awasthi, A., & Kannan, G. (2016). Green supplier development program selection using NGT and VIKOR under fuzzy environment. Computers & Industrial Engineering, 91, 100–108.
- Azevedo, S. G., Carvalho, H., & Cruz-Machado, V. (2011). A proposal of LARG Supply Chain Management Practices and a Performance Measurement System. International Journal of E-Education, e-Business, e-Management and e-Learning, 7–14.
- Bache, J., Carr, R., Parnaby, J., & Tobias, A. M. (1987). Supplier development systems. International Journal of Technology Management, 2(2), 219–228.
- Bai, C., & Sarkis, J. (2011). Evaluating supplier development programs with a grey based rough set methodology. Expert Systems with Applications, 38(11), 13505–13517.
- Bai, C., & Sarkis, J. (2016). Supplier development investment strategies: A game theoretic evaluation. Annals of Operations Research, 240(2), 583–615.
- Batson, R. G. (2008). A survey of best practices in automotive supplier development. International Journal of Automotive Technology and Management, 8(2),
- Benton, W. C., Prahinski, C., & Fan, Y. (2020). The influence of supplier development programs on supplier performance. International Journal of Production Economics, 230, 107793.
- Brush, G. (2000). Supplier development strategies for small high technology firms. R & D Enterprise: Asia Pacific, 3(3), 3–10.
- Chan, F. T. S., & Kumar, N. (2007). Global supplier development considering risk factors using fuzzy extended AHP-based approach. Omega, 35(4), 417–431.
- Charpin, R., Powell, E. E., & Roth, A. V. (2021). The influence of perceived host country political risk on foreign subunits’ supplier development strategies. Journal of Operations Management, 67(3), 329–359.
- Dastyar, H., & Pannek, J. (2019). Numeric evaluation of game-theoretic collaboration modes in supplier development. Applied Sciences, 9(20),
- Esmaelian, M., Hematgir, H., & Ghaenian, R. (2018). Designing and Implementation of Suppliers Evaluation Process in the Supplier Relationship Management System (SRM)(Case Study: Mobarakeh Steel Company). Journal of Industrial Management Perspective, 8(3), 37–61. (In Persian)
- Friedl, G., & Wagner, S. M. (2012). Supplier development or supplier switching? International Journal of Production Research, 50(11), 3066–3079.
- Fu, X., Zhu, Q., & Sarkis, J. (2012). Evaluating green supplier development programs at a telecommunications systems provider. International Journal of Production Economics, 140(1), 357–367.
- Glock, C. H., Grosse, E. H., & Ries, J. M. (2017). Reprint of “Decision support models for supplier development: Systematic literature review and research agenda.” International Journal of Production Economics, 194, 246–260.
- Golmohammadi, A., Taghavi, M., Farivar, S., & Azad, N. (2018). Three strategies for engaging a buyer in supplier development efforts. International Journal of Production Economics, 206, 1–14.
- Govindan, K., Kannan, D., & Noorul Haq, A. (2010). Analyzing supplier development criteria for an automobile industry. Industrial Management & Data Systems, 110(1), 43–62.
- Hines, P. (1994). Internationalization and Localization of the Kyoryoku Kai: The Spread of Best Practice Supplier Development. The International Journal of Logistics Management, 5(1), 67–72.
- Humphreys, P. K., Li, W. L., & Chan, L. Y. (2004). The impact of supplier development on buyer–supplier performance. Omega, 32(2), 131–143.
- Jokar, M., Mozafari, M., & Akbari, A. (2020). A Weighted Robust Two-Stage Stochastic Optimization Model for Supplier Selection and Order Allocation under Uncertainty. Journal of Industrial Management Perspective, 10(2), 111–135. (In Persian)
- Kraljic, P. (1983). Purchasing Must Become Supply Management. Harvard Business Review.
- Krause, D. R. (1999). The antecedents of buying firms’ efforts to improve suppliers. Journal of Operations Management, 17(2), 205–224.
- Krause, D. R., & Ellram, L. M. (1997a). Success factors in supplier development. International Journal of Physical Distribution & Logistics Management, 27(1), 39–52.
- Krause, D. R., & Ellram, L. M. (1997b). Critical elements of supplier development The buying-firm perspective. European Journal of Purchasing & Supply Management, 3(1), 21–31.
- Krause, D. R., Handfield, R. B., & Scannell, T. V. (1998). An empirical investigation of supplier development: Reactive and strategic processes. Journal of Operations Management, 17(1), 39–58.
- Krause, D. R., Handfield, R. B., & Tyler, B. B. (2007). The relationships between supplier development, commitment, social capital accumulation and performance improvement. Journal of Operations Management, 25(2), 528–545.
- Kremic, T., Icmeli Tukel, O., & Rom, W. O. (2006). Outsourcing decision support: A survey of benefits, risks, and decision factors. Supply Chain Management: An International Journal, 11(6), 467–482.
- Leenders, M. R. (1966). Supplier Development. Journal of Purchasing, 2(4), 47–62.
- Li, W., Humphreys, P. K., Yeung, A. C. L., & Edwin Cheng, T. C. (2007). The impact of specific supplier development efforts on buyer competitive advantage: An empirical model. International Journal of Production Economics, 106(1), 230–247.
- Markowitz, H. M. (1991). Foundations of Portfolio Theory. The Journal of Finance, 46(2), 469–477.
- Matzler, K., Bailom, F., Hinterhuber, H. H., Renzl, B., & Pichler, J. (2004). The asymmetric relationship between attribute-level performance and overall customer satisfaction: A reconsideration of the importance–performance analysis. Industrial Marketing Management, 33(4), 271–277.
- Mavrotas, G., & Florios, K. (2013). An improved version of the augmented ε-constraint method (AUGMECON2) for finding the exact pareto set in multi-objective integer programming problems. Applied Mathematics and Computation, 219(18), 9652–9669.
- Noshad, K., & Awasthi, A. (2015). Supplier quality development: A review of literature and industry practices. International Journal of Production Research, 53(2), 466–487.
- Olfat, L., Amiri, M., Raeesi Vanani, I., & Esmaeilzadeh, M. (2019). Identifying and categoring supplier development-related activities in the automative industry. Journal of Industrial Management Perspective, 9(3), 9–54. (In Persian)
- Praxmarer-Carus, S., Sucky, E., & Durst, S. M. (2013). The relationship between the perceived shares of costs and earnings in supplier development programs and supplier satisfaction. Industrial Marketing Management, 42(2), 202–210.
- Proch, M., Worthmann, K., & Schlüchtermann, J. (2017). A negotiation-based algorithm to coordinate supplier development in decentralized supply chains. European Journal of Operational Research, 256(2), 412–429.
- Rezaei, J. (2016). Best-worst multi-criteria decision-making method: Some properties and a linear model. Omega, 64, 126–130.
- Rezaei, J., Wang, J., & Tavasszy, L. (2015). Linking supplier development to supplier segmentation using Best Worst Method. Expert Systems with Applications, 42(23), 9152–9164.
- Routroy, S., Pradhan, S. K., & Sunil Kumar, C. V. (2016). Evaluating the implementation performance of a supplier development program. Asia Pacific Journal of Marketing and Logistics, 28(4), 663–682.
- Routroy, S., & Sunil Kumar, C. V. (2014). Analyzing supplier development program enablers using fuzzy DEMATEL. Measuring Business Excellence, 18(4), 1–26.
- Saghiri, S. S., & Mirzabeiki, V. (2021). Buyer-led environmental supplier development: Can suppliers really help it? International Journal of Production Economics, 233, 107969.
- Saghiri, S., & Wilding, R. (2021). On the effectiveness of supplier development programs: The role of supply-side moderators. Technovation, 103, 102234.
- Sánchez‐Rodríguez, C., Hemsworth, D., & Martínez‐Lorente, Á. R. (2005). The effect of supplier development initiatives on purchasing performance: A structural model. Supply Chain Management: An International Journal, 10(4), 289–301.
- Sillanpää, I., Shahzad, K., & Sillanpää, E. (2015). Supplier development and buyer-supplier relationship strategies—A literature review. International Journal of Procurement Management, 8(1/2),
- Sunil Kumar, C. V., & Routroy, S. (2018). Modeling Supplier Development barriers in Indian manufacturing industry. Asia Pacific Management Review, 23(4), 235–250.
- Talluri, S., Narasimhan, R., & Chung, W. (2010). Manufacturer cooperation in supplier development under risk. European Journal of Operational Research, 207(1), 165–173.
- Terpend, R., Tyler, B. B., Krause, D. R., & Handfield, R. B. (2008). Buyer–supplier relationships: Derived value over two decades. The Journal of Supply Chain Management, 44(2), 28–55.
- Tran, P. N. T., Gorton, M., & Lemke, F. (2021). When supplier development initiatives fail: Identifying the causes of opportunism and unexpected outcomes. Journal of Business Research, 127, 277–289.
- Trapp, A. C., & Sarkis, J. (2016). Identifying Robust portfolios of suppliers: A sustainability selection and development perspective. Journal of Cleaner Production, 112, 2088–2100.
- Valipour Parkouhi, S., Safaei Ghadikolaei, A., & Fallah Lajimi, H. (2019). Resilient supplier selection and segmentation in grey environment. Journal of Cleaner Production, 207, 1123–1137.
- Wagner, S. M. (2006). Supplier development practices: An exploratory study. European Journal of Marketing, 40(5/6), 554–571.
- Wang, F.-K., Du, T., & Li, E. (2004). Applying six-sigma to supplier development. Total Quality Management & Business Excellence, 15(9–10), 1217–1229.
- Wang, Y., Gilland, W., & Tomlin, B. (2010). Mitigating Supply Risk: Dual Sourcing or Process Improvement? Manufacturing & Service Operations Management, 12(3), 489–510.
- Yahya, S., & Kingsman, B. (1999). Vendor rating for an entrepreneur development programme: A case study using the analytic hierarchy process method. Journal of the Operational Research Society, 50(9), 916–930.
- Yawar, S. A., & Seuring, S. (2020). Reviewing and conceptualizing supplier development. Benchmarking: An International Journal, 27(9), 2565–2598.