How to use the Evaluation of Suppliers to Develop the Supply System

How to use the Evaluation of Suppliers to Develop the Supply System

Emilio Esposito, Renato Passaro
Copyright: © 2012 |Pages: 16
DOI: 10.4018/978-1-60960-585-8.ch017
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Abstract

In recent decades several studies have highlighted that the competitive advantage of large customer firms arises significantly from their ability to achieve a successful supply system through the adoption of effective tools and methodologies for evaluating suppliers. Nevertheless it emerges that a gap exists between a growing number of applications and the scarce empirical evidence of the practical usefulness of such applications. The purpose of this chapter is to provide a contribution to bridging this gap through applying the Analytical Hierarchical Process (AHP) methodology suppliers’ evaluation. The evaluation tree of the AHP assures transparency and traceability, features that allow using it as a tool for strategic management of the supply system. The AHP evaluation tree provides relevant indications for the strategic decision that both customers and suppliers have to adopt to reinforce the supply system and their competitive position. Relevant issues arising from the application and managerial implications for both customer and suppliers are discussed. In particular, we underline how the AHP methodology is not only a tool for supplier evaluation but also a strategic management tool to develop the supply system.
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The Theoretical Background

Several studies have shown that suppliers are increasingly essential contributors to building the competitive advantage of customers and that their actions have a positive impact on the performance of the entire supply chain (Vonderembse, Tracey, 1999; Sarkara, Mohapatrab, 2006; Shu et al., 2006). In the last decades an incresing number of scholars have focused on the issue of supplier selection methodologies (Weber et al, 1991; Bhutta, 2003; Cheraghi et al, 2004; Sonmez, 2006; Bruno et al., 2010) to develop supplier management process and supply relationship system able to rapidly react to market requirements and to innovation dynamics (Lamming et al, 1996; de Boer et al., 2001; Lee et al, 2001; Prahinski, Benton, 2004; Kamann and Bakker, 2004; Saen, 2007). In a general perspective, some scholars pointed out that, in recent decades, the evolutionary processes of supply chains also depend on the ability of large customer firms to adopt a proper suppliers’ evaluation system (Esposito and Passaro 2009a, 2009b).

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