Supplier Evaluation With BWM and Fuzzy CODAS Methods

Introduction

Evaluating the performance of suppliers and identifying suppliers having the best performance constitutes one of the most critical problems encountered in supply chain management. In addition, suppliers' performance can affect the entire supply chain performance. For example, if the raw material supplier fails to deliver the raw material to the production plant on time or delivers incomplete quantities, production disruption will occur first, then disruptions in distribution will be affected and other members of the chain will be affected gradually.

One of the most significant success factors in production companies in supply chain management depends on the proper functioning of supply activities. Under the increasingly competitive conditions that come with globalization, in order to ensure business continuity and competitive advantage, production plants should use their resources with high efficiency and manufacture products with high quality and at the lowest cost.

The selection of suitable upstream suppliers is a significant achievement aspect, which will significantly reduce buying costs, enhance the satisfaction of downstream customer and rise competitive ability (Liao and Kao, 2010). The growing and quick changing demands of customers force firms to focus on their core competencies and allow suppliers to do more of the business than ever before. This will increase companies' dependence on suppliers, so companies need to collaborate with their suppliers. In this relationship, there is a need to assess the performance of the suppliers as the performance of suppliers may affect the performance of company directly or indirectly. Therefore, companies need to evaluate the performance of their suppliers periodically.

The selection of supplier is a crucial process that as a result of assessments of their performance manufacturing companies identify the best ones among suppliers offering high-value services and materials. The main objective of supplier selection is to determine the most suitable suppliers with respect to the company's goals. The selection of supplier is, therefore, an important process for the firm to obtain goals of business. More attributes or criteria are needed to take into account in the supplier selection problem. Thus, MCDM (Multi Criteria Decision Making) methods are useful to address this problem.

In choosing suppliers, considered criteria usually contain uncertain and ambiguous data. In order to handle uncertain data, in the literature many approaches have been proposed. One of them is FST (fuzzy set theory). This theory have been integrated with different MCDM methods to address supplier selection problem many times in the literature (Chai et al., 2013; Ghorabaee et al., 2017a). An integrated MCDM model comprising BWM (Best-Worst Method) and fuzzy CODAS (Combinative Distance-based Assessment) is proposed to address a supplier selection problem for a Turkish furniture workshop in this study. The reasons why BWM is preferred in this study can be listed as follows. BWM requires fewer benchmarks compared to the AHP (Analytical Hierarchy Process) method. However, compared to the AHP method, it makes more consistent criteria comparison and uses only integers differently from the AHP method, making BWM easier to use (Rezaei, 2015). The reasons why fuzzy CODAS is preferred in this study can be listed as follows. The CODAS method utilizes two different distances (Euclidean and Taxicab) in order to evaluate the alternatives on multiple criteria (Ghorabaee et al., 2016). This can make the CODAS method to obtain much more robust results than other MCDM methods. In this study, fuzzy CODAS method will be utilised to handle the uncertainties in the problem.

This study aims to fill a research gap in the literature. This research gap is that the number of studies using the BWM and CODAS method is limited (Maghsoodi et al., 2020). However, both methods have advantages over other MCDM methods. Some of these advantages are mentioned above. For this reason, the BWM and fuzzy CODAS methods are used together in the study. These MCDM methods are utilized to select the best supplier for a furniture workshop. The main purpose of this study is to obtain more consistent criteria weights with fewer data compared to AHP by using BWM and to address the uncertainty by using fuzzy CODAS in the supplier selection problem.