A Compatible Supplier Selection Model for New Product Configuration

Abstract

Compatibility among suppliers is an effective approach to manage the dependencies between members of supply chain. These members often try to achieve their respective goal, disregarding the objective of the complete supply chain for a new product development and at last, the supply chain converges towards higher supply chain cost, greater leading times and a large variance between supply and demands. Kim and Wagner (2012) suggested compatibility among suppliers is necessary for new product development (NPD). On the basis of literature survey, compatibility among suppliers can be defined as the joint efforts of the suppliers towards mutually defined goals. Compatibility involves the interaction within as well as outside of the organizations/firms. Outside interaction of the organization and supplier management is considered as a critical success factor for any organizations. In the modern global manufacturing environment, the most important factors for the compatibility between the suppliers are information sharing, reliance, and commitment. Therefore, the analysis of supplier-supplier relationship for their compatibility is a very challenging task for academician and practitioners. Another salient feature of this thesis is to identify the key factors for perfect compatibility between suppliers and their relationship for new product development. Although a large number of academician and practitioners try to achieve the compatibility among suppliers. However, little attention has been given to analyze a comprehensive way for measuring the compatibility among suppliers. Therefore in this thesis, an attempt has been made to identify various mechanism of compatibility among suppliers. Graph theory is utilized to identify the compatibility among suppliers. In most studies compatibility criteria are assumed to be independent of each other. However, these criteria are likely to affect each other. The main purpose of this paper is to show how the graph theory may served as a decision analysis tool for supplier selection–which is more suitable to be employed in this interdependent relationship framework. The proposed method can be used as a decision support system by project owners in order to identify an eligible supplier to be awarded the compatible supplier.