A Multi-Criteria Decision-Making approach for Supplier Selection in procurement using AHP and ISM-MICMAC

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Rituparna Seal, Dr. Yashomandira Kharde

Abstract

Selectinga supplier is a multi-criteria decision-making technique which includes factors that can both be quantitative and qualitative.The purpose of this paper is to explore various parameters that can affect the process of supplier selection using criteria that have earlier not been explored much. The parameters take into consideration the Services provided by the Supplier, their inclination towards the practice of building a sustainably driven organization, the overall profile of the supplier as well as certain behavioural factors that are often latent features that somehow drive the supplier selection process. This study presents an integrated framework that involves the incorporation of AHP, ISM and MICMAC to determine the factors’ and their attributes’ driving and dependence power. Basedon the Literature review, a total of 16 parameters were identified. Subsequently, surveys and interviews were conducted to judge the importance of each of the factors. The final results were depicted as a MICMAC Graph incorporated with the AHP ratings. It was found out that Reliability and Compliance to Standards rated the highest in terms of weights. The inter-relationships between the parameters can be expressed as a 6-level structure. This study can help procurement managers understand their existing suppliers better as well as would be a stepping stone for decision making while onboarding any new suppliers.

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