Construction of the Supplier Evaluation Index System Based on Supply Chain
Hui-shan Li1, Chun-xian Wang2, Chun-he Zhang1
1
2
Department of Auto Engineering Military Transportation Academy, Tianjin, China
Engneering Teach Practice Training Center, Tianjin Polytechnic University, Tianjin,China
(lihuishan65@163.com)
Abstract - In order to make the supply chain select the
best suppliers, the supplier system is defined and analyzed,
finding out the main influencing factors. An index of
estimation system is established, and synthesis estimation
system for it has been built. In addition, it includes 4
principal indexes, 17 second grade indexes which can reflect
the comprehensive abilities. By using the AHP method,
defines the proportion of every factor, each index can be
transformed into a standardized mark. 11 suppliers are
selected, the index weights and then the linear weighted sum
method is used to calculated the comprehensive ability score
and by comparing these scores, which realizes the aim of
quantitative analysis.
Keywords - evaluation method, index system, supply
chain, supplier
I. INTRODUCTION
Supply chain has connected together the customer
and supplier together such as the chain, and the
connection and related tasks is assumed by means of
purchasing department. Suppliers have an important
impact on supply chain performance. Efficient logistics
providers can help enterprises obtain highly efficient
supply chain systems. How to select suppliers in many of
the long-term strategic partner, become purchasing
management department relevant issues to resolve. It is
more to supplier evaluation index system and the standard
[1][2]
, but so in some ways it is not fitting in very well on
certain feasibility evaluation index system and standard,
following the supply chain concept into the supplier
evaluation process [3-5]. It is the lack of systematic and
comprehensive. These research results are mainly based
on a single materials supply process and a single vendor
selection process. They cannot fully reflect the breadth of
a supplies process in the supply chain system. Supplier
evaluation system and standard are the foundation of the
relationship supply chain operation, how to reflect the
authentic representation has certain practical significance.
SYSTEM ESTABLISHED
The evaluation criteria of supplier selection began in
the Dickson study of 1996. Dickson agreed that product
quality, cost, and delivery time are the most important
criteria of supplier selection[6-8]. And others studies,
supplier selection should be based on actual needs, make
meticulous investigation and analysis, fully aware of the
supplier situation and overall balance, and select a few
alternative suppliers. Then make a quantitative analysis of
the comprehensive capacity of these suppliers to select
the best[9-11]. Under the supply chain environment
suppliers was gave a very thorough comprehensive
evaluation, must having a complete and scientific
comprehensive evaluation index system. General supplier
evaluation focuses on some short-term, such as price,
quality, delivery and the historical performance other
procurement related indicators [12][13]. Based on supply
chain
purchase,
the
strategic,
sustainability,
complementary and compatibility other aspects of the
content should be paid more attention to.
A. supplier evaluation factors
The system is made up of suppliers, procurement
department and users to complete the activities. The
supplier should meet the requirements, Mainly involves
the supplier product competitiveness and suppliers the
internal environment of the supplier and living
environment and suppliers ability of cooperation aspects
etc..[14] Supplier's products competitiveness is mainly
embodied in the prices of the products, the cost of the
products, the quality of the products, delivery of the
products, the service and flexible for the products. The
supplier internal environment is mainly embodied in the
product production capacity, business operations,
technical skills, management system. Supplier's living
environment is exactly a supplier facing the survival and
development of the environment, reflected in the political
and legal environment, the social culture environment, the
II. COMPREHENSIVE EVALUATION INDEX
principal index
Supplier's products competitiveness
(0.312)
Supplier's internal environment
TABLE I, supplier comprehensive evaluation index system
Relation matrix (Index status)
Second Principal index
weight
Very high
high
common
cost
0.244
3
4
3
quality
0.213
1
2
5
delivery time
0.243
2
1
5
service
0.184
1
1
6
flexible
0.116
0
2
5
production capacity
0.267
1
3
4
low
0
2
2
2
3
1
(0.225)
Supplier's living environment
(0.249)
Supplier's ability of cooperation
(0.214)
technical skills
business operations
management system
Economy environment
geographical environment
social culture environment
legal environment
technical compatibility
information compatibility
culture compatibility
credibility
economy and technology environment, the natural
geographical environment. Supplier's ability of
cooperation is mainly embodied in the ability of
cooperation between technical compatibility, information
platform compatibility, enterprise culture compatibility
and credibility.
B. comprehensive evaluation index system
The complexity of the supplier evaluation is
considered, with the analysis of influence factors to
establish a set of mutual connection and complement and
interdependent principal index (shown in table 1). The
elements of the hierarchy can relate to any aspect of the
decision problem. Based on this, according to the results
of the analysis system, Second principal index related to
principal index is set. One should explain it, while
selecting supplies, supply chains generally lay stress on
these factors: quality, price and delivery time. The quality
and delivery punctuality should be required first.
Therefore, this paper selects the evaluation indices
associated with quality and delivery punctuality. The
indices are shown in Tab. 1. The quality factors include
the products qualified degree, industry standard products,
production environment, the production process quality
control, as well as the quality system and quality
standards. Among them, the supplier product quality is
reliable, that is a very important evaluation index.
Suppliers must have a good quality control system,
provide products must be able to continue to achieve
stable product manual request. Service factors generally
lay stress on these factors: the service attitude, the service
response speed, dealing with complaints ability, product
technical support and after-sales service. The service
quality and after-sales are very important index, as a
result of selecting suppliers to carefully consider the
factors. The delivery time is the most important factor
generally lays stress on these factors: suppliers'
production cycle, production plan planning and flexibility,
the inventory preparation, the order response speed, the
transportation conditions and ability etc. The technical
ability includes research and development of new
products, the project management capability and the
quality of the staff, etc. Each node in the supply chain,
attention was held on the supplier research and
development ability and financial condition. But in the
evaluation of suppliers, the technical ability is to balance
0.298
0.253
0.182
0.242
0.281
0.239
0.238
0.325
0.175
0.257
0.243
1
2
0
4
2
1
1
1
1
1
2
3
3
2
3
3
3
3
3
3
4
2
5
5
5
3
4
4
4
5
4
4
5
1
0
3
0
1
2
2
1
2
1
1
the factors considered. Supplier prestige includes contract
performance ability and the supplier's financial condition
credit standing.
III. COMPREHENSIVE EVALUATION METHOD
The key problems that constitute comprehensive
evaluation index system is the selection of evaluation
methods. At present, in the practice of the widely used in
evaluation method, such as weighted summation
evaluation and square root evaluation method are too
simple, but difficult to meet the needs of the
comprehensive evaluation. The differences of the indices
dimensions and magnitudes affect the evaluation results
and result in poor decisions. So we should perform
standardized processing of evaluation to transform them
into standard mark which has dimensionless and the same
magnitude. According to the supply chain construction
assessment of the characteristics and requirement, we
used the analytic hierarchy process (AHP) comprehensive,
and confirm index weight[15]. The index weight reflects
the importance of the index. The determination of the
weights must reflect system functional requirements. This
paper uses the expert method to determine the index
weight.
A. analytic hierarchy process (AHP)
The Analytic Hierarchy Process (AHP) is a
structured technique for helping people deal with
complex decisions. The AHP provides a comprehensive
and rational framework for structuring a problem, for
representing and quantifying its elements. Once the
hierarchy is built, the decision makers systematically
evaluate its various elements, comparing them to one
another in pairs. It is to measure the index of the scale of
the relative importance, a indicators of the index system
to all other index effects. The judgment matrix is
constructed. The matrix is shown in formulate (1).
A criterion compared with itself is always assigned
the value l so the main diagonal entries of the comparison
matrix are all 1．The numbers 3, 5, 7, and 9 correspond to
the verbal judgments “moderately more dominant”,
“strongly more dominant”, “very strongly more
dominant” ,and “extremely more dominant” (with 2, 4, 6,
and 8 for compromise between the previous values).
Reciprocal values are automatically entered in the
transpose position. One is allowed to interpolate values
between the integers, if desired．
a11 a12 ..... ..... a1n
a21 a22 ..... ..... a2n
(1)
A  .... ...... ..... ..... .....
.... ...... ..... ..... .....
an1 an 2 an3 ...... ann
B. calculation under a criterion of the relative weight
The weights for the defined criteria are developed on
the basis of the well-known numerical scale for
preference values ranging from 1 to 9 ．The criteria
weights have the strongest impact on the results and
hence the determination of their preference values is often
the subject of debate among the interest groups
involved．To avoid these debates, one should allow each
interest group to establish its own matrix of preference
values．
For quantitative indices, we adopt vector
normalization to perform standardized processing. By the
optimization method, the comprehensive weight can be
calculated, and consistency examined. In a judgment
matrix A, characteristic root can be calculated, by
AW   max W . All regularized W belong to the same
scale as the weights. Generally the approximate method
can be used to solutionλmax and W.
(1) Calculation the judgment matrix line vectors
product Mi:
n
M i   ai , j (i  1,2, n)
(2)
j 1
(2) the calculate formulas of nth roots of Mi:
(3)
pi  n M i
(3) Pi normalized, get the weight of each index, It is
denoted as:
p
wi  i  p (i  1,2 n)
i
(4)
(4) Judgment principal matrix with satisfied
consistency. The biggest characteristic of the consistency
condition is equal the judgment matrix of root and matrix
order number, so consistency evaluation value of
treatment for customs is as follows:
n  AW 
n
I,
where, 
CI   m a x
 
max
n 1
i  1 n wi
(AW)I mean the I-th elements of A
CR=CI/RI
(5)
Note that the consistency ratios CR for the derived
weights are above 0.1 which would require a revision of
the preference matrix．However, the threshold value of
0.1 for the consistency ratio is derived from expert
judgment and experience and should therefore not be a
formal constraint．Moreover, a CR of about 0.12 is only
slightly above the recommended value of 0.1 and the
derived weights from tables I plausibly reflect the
assigned preference values ． Therefore,the preference
matrices were not revised and were used to derive the
weights for the subsequent weighted criteria summation．
IV.
DISCUSSION
Measure supplier evaluation standard is the
objective measure, supplier to the level of comprehensive
ability, with the standard to measure, is clear at a glance.
The dimension of supplier indexes on supply chain is
different, for example cost and technology ability indexes
are different units or content. In order to eliminate the
influence of dimensional, must through the mathematical
transformation of every evaluation index dimensionless
processing, that is to say, actual value of the indexes will
be the respectively into may same with the measure index
score. Only in this way, it will be possible to put more
different dimensional evaluation index integrated into a
value. For quantitative indices, we adopt supplier
normalization to perform standardized processing, the
formula of supplier normalization is shown in formulate
(6).
where the i-th item index scores-di ; the i-th item
measured value- xi; the i-th item don't allow the valuexi(s); the i-th item maximum value-xi(h).
x  xi( s )
(6)
d i  ( hi )
xi
 xi( s )
Usually, the measured value for each index in
between not allow value and the most satisfaction value,
is replaced by xi(s) ＜ xi ＜ xi(h), then 60 mark＜di ＜100
mark. Under special conditions,let xi= xi(s), di=60 mark
(just right pass)；then xi= xi(h), di=100 mark (maximum
value)。Whether positive or negative index, all can be
calculated by using the formula of the supplier points, the
index score for the index is "satisfaction rating", may with
the measure. For example, evaluation criteria are divided
into excellent, good, fair, poor four ranks, same as A, B,
C, D. Supplier's products competitiveness in principal
index, the delivery time, in a period of time the ratio of
delivery times on time Nt and the number of the total
delivery frequency N is greater than 95%, to determine
the grade A. If it reached 60%, based on the formula that
the 60% / 95% = 63% (to the grade A level about 60%)
reach the grade B (including 60%~90%). Where, 40% /
60% = 67% (to the grade B only 60%) reach the grade C
(including 40%~60%). So, 25% / 40% = 63% (to the
grade C only 60%) reach the grade D (including 25%~
40%). So on it can be got the secondary indexes of the
specific A, B, C, D standards.
V.
CONCLUSION
With 11 suppliers N1,N2,...,N11, purchasing
management departments use the evaluation index system
for the 11 suppliers on the evaluation. First, through the
questionnaire survey and data acquisition get second
principal index weight, aggregative them get principal
index, standardized treatment data is shown table II. See
Table II for the analysis of relative weightings in valid
survey responses. In the first tier evaluation aspects, the
rankings of factors among the 11 suppliers are:(1)
Supplier's products competitiveness N8 (0.96);(2)
Supplier's internal environment N8 (0.94);(3) Supplier's
internal environment N8 (0.72);(4) Supplier's ability of
cooperation (0.98). We proposed a comprehensive model
to select the best supplier N8. AHP enabled us to
incorporate 17 factors that are both qualitative and
quantitative for assessing the vendors．Although the final
decision indicates that N8 dominates the other suppliers
rather decisively based on these many factors, in the end
the managers decided to allocate the order quantities
between the two top suppliers in the supply chain, most
likely to have some redundancy. It shows us that the
number of criteria included in the supplier selection
process is quite important. Although we initially
considered 17 criteria, we went through an initial
trimming process and eliminated 4 of them. The choice
and number of factors to be included in the supplier
selection process must be conservatively selected since
the decision-making process is complex. Because of the
complexity of decision making, fuzzy thinking of human
judgment, a hybrid comparison matrix is not completely
consistent in some situations. Some deviations should be
permitted．
TABLE
supplier
N1
N2
N3
N4
N5
N6
N7
N8
N9
N10
N11
II, the 11 suppliers evaluation index treatment data
X1
X2
X3
X4
0.75
0.83
0.72
0.95
0.75
0.85
0.95
0.96
0.71
0.68
0.61
0.92
0.93
0.72
0.89
0.84
0.86
0.87
0.94
0.56
0.67
0.59
0.56
0.61
0.70
0.68
0.71
0.36
0.4
0.72
0.32
0.36
0.28
0.71
0.87
0.63
0.85
0.79
0.88
0.95
0.98
0.27
0.82
0.51
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