Strategic sourcing: a combined QFD and AHP approach in manufacturing

Abstract

PurposeThis paper aims to develop an integrated analytical approach, combining quality function deployment (QFD) and analytic hierarchy process (AHP) approach, to enhance the effectiveness of sourcing decisions.Design/methodology/approachIn the approach, QFD is used to translate the company stakeholder requirements into multiple evaluating factors for supplier selection, which are used to benchmark the suppliers. AHP is used to determine the importance of evaluating factors and preference of each supplier with respect to each selection criterion.FindingsThe effectiveness of the proposed approach is demonstrated by applying it to a UK‐based automobile manufacturing company. With QFD, the evaluating factors are related to the strategic intent of the company through the involvement of concerned stakeholders. This ensures successful strategic sourcing. The application of AHP ensures consistent supplier performance measurement using benchmarking approach.Research limitations/implicationsThe proposed integrated approach can be principally adopted in other decision‐making scenarios for effective management of the supply chain.Practical implicationsThe proposed integrated approach can be used as a group‐based decision support system for supplier selection, in which all relevant stakeholders are involved to identify various quantitative and qualitative evaluating criteria, and their importance.Originality/valueVarious approaches that can deal with multiple and conflicting criteria have been adopted for the supplier selection. However, they fail to consider the impact of business objectives and the requirements of company stakeholders in the identification of evaluating criteria for strategic supplier selection. The proposed integrated approach outranks the conventional approaches to supplier selection and supplier performance measurement because the sourcing strategy and supplier selection are derived from the corporate/business strategy.

Strategic sourcing with multi-stakeholders through value co-creation: An evidence from global health care company

“…The importance and influence of multiple stakeholders in sourcing decisions in order to ensure that the expectations of the end users of a firm's products/services are met has been widely acknowledged by practitioners and researchers (Scott et al 2014;Dey et al 2014;Roden and Lawson 2014;Genovese 2013;Reuter et al 2012;Goebel et al 2012;Ho et al 2011;Kamath and Liker 1994). Involvement of internal stakeholders in afirm's sourcing strategy and making use of stakeholder pressures positively contribute in influencing supply chain partners' behaviour (Grimm et al 2014).…”

Strategic sourcing supplier selection misalignment with critical success factors: Findings from multiple case studies in Germany and the United Kingdom

“…Otherwise, additional risks would occur and directly affect organisation's reputation, brand value, and reliability. Ho et al (2011) propose that internal stakeholders and their requirements must be considered in the strategic supplier evaluation process such that the supplier selection is aligned with the business strategies. Kern et al (2011) empirically prove that the successful management of three stakeholder groups (suppliers, internal clients, procurement and supply management staff) significantly contributes to enhance sourcing performance in terms of cost, delivery, quality, and flexibility.…”

Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

“…However, the contrary and surprising finding is the misalignment with critical success factors, in which quality was ranked as the main criterion. In addition, risks are not targeted in the objectives; although several risks are identified in Table 4-1 as relevant trends to the company, the sourcing function neither consider these as a trend to the department nor as an objective within the sourcing strategy (Moses and Åhlström, 2008;Ho et al, 2011;Kusaba et al, 2011). This is despite the significant risks to the company, its competitive advantage and business performance.…”