Supplier Selection Using SMART Technique

The assignment is based on a case study where Glasstops UK needs to purchase material from an external supplier. Using the SMART (Specific, Measurable, Achievable, Relevant, Time-bound) technique, it must evaluate different suppliers and choose the most suitable one. The task involves analyzing strengths and limitations of using this approach for decision-making.

Analytical Thinking and Decision
Making

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1.1Importance of decision making process and applications of decision analysis.....................1
1.2 decision problem related to work .........................................................................................4
1.3 Apply the simple multi-attribute rating technique (SMART) for outlining decision
problem. .....................................................................................................................................6
1.4 Strength and limitation of the analysis .................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Analytical thinking is a critical and major components of visual thinking which provides
capability to resolve the problems effectively and quickly. It includes certain methodology in
step by step approach in order to thinking that permits a person to break down hard and complex
issues into manageable and single elements. Generally, analytical thinking includes process of
collecting data and information and determine key issues relation to the gathered information.
This kind of thinking also needs individual to make comparison of data and outline suitable
judgement form certain dataset in order to reach at proper solutions. In order to have
effectiveness of analytical thinking and decision making an individual should have practical tools
so that he can be able to evaluates different elements of the firms. For examines of any issues an
individual needs to frames objective that involves suitable diagnose the issues, innovative tricks
and methods, effectively using of team, natural thinking and behaviours of persons (Fish, 2011).
The assignment aims to reduce the number of supplier base of glass manufacturing company,
Glasstops UK that actively produces glass-molding machines, spare parts, accessories and glass
models.
This report guides the feature and importance of decision making other side how they can be
able to resolve issues with the help of SMART that is known as multi-attribute rating teaching.
Self assessment of the issues is also important so as to determine the potential and efficiency of
the process of decision making (Wierenga, 2012).
TASK 1
1.1Importance of decision making process and applications of decision analysis
The procedure of decision making is to chosen foremost prominent selection among
present alternatives. Decisions are refers as one of the best factors of management in order to
taking any worth decisions.
Importance of decision making process
Decision making is an act of selecting desirable choices among various alternatives. As a
human, we choose best outcome from multiple possibilities that comes to our way. In same
manner, business's day to day activities perform decision making, where manager have to take
some crucial decisions for problem or difficulty in workplace. Whatever a manager does he does
1

through making decisions that accomplishes short-term and long-term goals of the company.
From business's point of view, importance of decision making is stated below:
Executing Managerial functions: Various managerial functions such as planning,
organizing, directing, controlling and staffing requires effective decision making. It not only
provide best alternative for executing tasks but also give an evaluating criteria for performances.
For examples, employees are assigned their task through managerial functions (Gregory,
2012).Therefore, it act as a critical component in decision making process.
Ubiquitous decision making: Sometime, managerial activities require pervasive
decisions, hence it must be followed by every staff member.
Evaluating managerial performance: Making decisions help in evaluating various
performances of a manager. Positive result concludes, that a manager is efficient, able and
qualified in his/her field. In the same way, negative result concludes, that manager is not
qualified enough for job. This is how decision making process helps in evaluation.
Planning policies: Constructing policies and plans are a part of decision making. While
creating them, employee rights are to be consider, which again require critical thinking that can
be achieved via decision making.
Taking best alternatives: Always a best alternative is consider when it comes to decision
making. Experts look out for advantages and disadvantages of alternatives and select best from
the choices present.
Successful operation of business: Decision is made by every individual, department and
organization. It is important to study all internal and external factors that exist in business before
making a decision. Effective decision helps to sustain in the market and provide growth to
company (Gregory, 2012).
Facilitate innovation: Through decision making new ideas get generated and are shared
among experts that result in innovation of new strategy, technology or process.
Motivates employee: Employee always go for fair decision and expects the same in
return. Therefore, sensible and logical decisions are obtained through this process, as a result it
motivates employee to stick to their beliefs and values in the work culture and act as a
motivating factor.
Pervasive Function: the procedure of decision making is important and crucial in an
commercial business organisation and each and every group as well as every level or stage of
2

management with in a firm (Gregory, 2012). Such as high level of managements authorities
frame and impose strategic decisions like as planning and controlling, in-between level
management persons form and imply tactical decisions such as duty and fixation of some
possessions other side operation level of person management, manages and impose day to day
life matters like as division labours, making of scheduled works and a lot more. This reflects
decision making procedure extended throughout the group or firms that provide uniformity of
entire performance
There are hundreds of importance of decision making process. From successful tackle of
problems to effective business growth, decision making influence every managerial function. It
gives rational conclusion to every problem and increases efficiency. Efficiency is evaluated on
the basis of returns and cost of a business. Higher efficiency is achieved when returns are high
and cost is low and vice versa. This is again outcome of an effective decision making process. It
is said that management without a decision is a man without a backbone which is true because to
overcome uncertainty this process act as an problem solving approach for various issues that
arises in workplace (Reyna, 2011).
Application of decision analysis
As analysis of decision is an necessary criteria that provide help in examine the decision
making and facilitates judgement on the flaws in the business entity. Decision analysis provide
help to an organisation in order to evaluate various different structure and models and
understands their major conditions or consequences in the firm. The analysis also helps in the
business ion order to feels or observe recommendations and provide prescribed solution for some
particular decision. The utilization of practical techniques and tools will be helpful in respect to
observe various different elements and defining of the business. In more and many cases such as
financial locations various software are required to analyse different factors. For evaluating a
business, analyst needs to be more aware of values, objectives or goals, nature and frames
decision according to it.
Other side, decision in an organisation determine as non financial or monetary. Therefore
in both of the cases analyser concentrate the estimate or average values and decision in their
performance through comparing values of different various sections of an organisation.
Some of the major common financial grip is been listed that can be evaluated with the
help of various different techniques in an organisation.
3

Discount cash flow – It helps in calculation of the financial values in futuristic context
for some particular data such as simple interest and compound interest.
Net profit value – it will provides conversion of values of the cost to current values in
future relation. This will permit an organisation to frame estimation of their financial value in the
future and current values.
Interest rate of return- it helps in calculation of interest rate at time of NPV values is
Zero. This will calculate the total rate of interest and financial values of an organisation.
Average rate of return – The average or estimation of the return rate for a certain time
interval. It is the rate of return of the entire sales.
payback period – The whole time taken to provide value for the major initial
investment they have invested in it. This is about how can a company providing pay again back
to all the values in a particular time duration of the period.
Therefore, analysis of decision making also involves trad off practises of decision making
that includes valuation and evaluation of money. For examine the decision making is trade off
exercise decision tree is very essential and effective. It provide helps in collecting all the
elements in the one single platform for evaluation and analysis of various elements. Hence for
the above we can analysis which it is very prominent to have a good and sound decision making
process that will permit an organisation to make a systematic approach in examine various and
different prospective in their process of decision making. The firm needs to have different win
for process of decision making so that effective and efficient decision can be framed (Reyna,
2011).
1.2 Decision problem related to work
In order to flourish the business to different or a new location some of the factor needs to
be considered so that various multiple goal should be covered with effective and efficient
decision making. In context of sustaining and establish new business in demographic
environment some of specific planning needs to be done as covering various elements begin
form raw material to final or ready goods. Decision making is an element that is generally begin
used in different kinds of market. Hence an organisation should take some particular corrective
actions in order to boost up their efficiency in the business market.
Glasstops UK is bespoke glass manufacturing entity that produces glass, accessories and
other relevant products like cleaners, mirror screws, shower fittings and mirror adhesive. The
4

procurement division of the entity keep full control over the purchasing activities and inspected
the goods received through 100% inspection or sampling. Scrap items are returned for
replacement or repairing. Company purchase material from different suppliers and currently,
realized that it require to reduce the number of suppliers for the cost management purpose. As
the main activity of the company is to produce glass molding and spare parts, henceforth, the
current evaluation mainly focuses on the suppliers of spare parts.
1.3 Apply the simple multi-attribute rating technique (SMART) for outlining decision problem.
This smart technique needs to be impose in the process of decision making for Glasstops
UK. So that the firm can creates their business in the very smarter manner. SMART is an
analytical techniques that provides supports on the linear additive model. It will offers the entire
values of the listed alternatives. This facilitates helps in offering detailed analysis and also helps
in calculation through multiplying sum of the performance score with the relative weights of the
certain criteria. SMART is divided in to around 9 stages that are related with the issues had and
solution required to be pinned down. Various different stages of the process of SMART and
evaluation of their results or output (Provost, 2013 ).
The basis of producers is selected considering the critiera of selection and the best
supplier is determined through applying SMART technique as follows:
Stage 1 – Identification of decision makers
It should be clear that the decision maker are defined who are capable to have decisions
for the business in order to have expansion of the firm. It is essential factors to choose
appropriate individuals for having decision in the process of business. This will allow the firm to
form various prospects in the company structure (Fenton‐O'Creevy, 2011). . The behaviour and
attitude of the individual plays a signify role in a business as his all decision will makes
influences on the working of an organisation in new competitive market. Therefore, in order to
have some particular decision in the business it should be ensures that the firm shave all the main
criteria and elements that are covered for sustaining in the business market.
Referring the chosen business problem, Glass tops UK has three alternative suppliers
from whom spare parts can be purchased named as Supplier A, Supplier B and Supplier C.
Stage 2- Identification of different issues – depend upon the prospect and context of the
business.
5

This phase have all the detailed examined of entire level of issues that have entitled with
the business process. Like: cause of Brexit there are some political issues or disability in entire
UK due to this there are some protest and clashes that have arise in that particular location or
geographical area in may build up some issues for the business (Dane, 2012).
Here, in the given case, the main issue of Glasstops UK is to reduce the number of
suppliers so as to mitigate overrunning cost and also the complexity in the procurement process.
Stage 3 – Identification of alternatives
This phase is generally used to examine the several results of the business for future run
and frames planning in accordance to it. They should also make sure that they have various
alternatives for their business that will help them to continue in competitive environment .(Dane,
2012).
There are three suppliers from where Glasstops UK can purchase the material or spare
parts that are named as Supplier A, B and C. However, company is not sure that from whom it
should be purchased because there are number of factors which may vary from supplier to
supplier.
Stage 4 – Identification of criteria
It is very crucial and major for limiting conception context of values. It will be
completing by combining various criteria and remove the less valuable criteria (Pearson, 2013).
In the business firm some of particular criteria will come up in the process of business.
The firm needs to list all those factors and examine them effectively. After listing all the
situations or grounds the firm needs to rate them in accordance to their priority and examine the
all factors having major priority and eliminate the lower valuable one such as in establishing of
office in that particular place the firm needs to ensure that they have already knows all the legal
aspect of the government and domestic policies of trading, this will helps their policies of the
business firm.
The below table clearly present all the attributes along with their relevant criteria which will be
used for the evaluation of the most suitable supplier.
Attributes/ Selection
criteria
Criteria 1 (C1) Criteria 2 (C2) Criteria 3 (C3)
A1: Capability Technology use Monthly production
capacity
-
6

A2: Product quality Quality of the
products
Certification Application of
quality assurance
and control
A3: Geographical
condition
Geographic
proximity
A4: Service Ability to satisfy
promise of due date
Keep the right order
amount
A5: Price Selling price charged
A6: Reliability Years of working Customer referring Years of working
together
Stage 5 – Assigning value for different criteria
This is a straightforward approach as it provide ranking to different problems is signify to
giving wait age to the issues. It is known as the more hard task in order to establishing a office in
new business environment. In order to examine all the values to the various concept in the firm
appropriate brainstorming activities needs to be arranged that will provide chances to different
employees to have their views and suggestions to purchase spare parts from supplier by
Glasstops UK this will also determine several task skills and knowledge needs to having
advantages in the competitive market such as selection of the best supplier for the spare parts
will be evaluated through brainstorming. This event is very unique and powerful in determining
the appropriate staff member who have capacity to perform in competitive marketing conditions
the selected location (Schmoldt,2013).
Assigning proportion value
Attributes Relational value Proportion value (PV)
A1: Capability 90 0.17
A2: Product quality 100 0.19
A3: Geographical condition 85 0.16
A4: Service 95 0.18
A5: Price 80 0.16
A6: Reliability 70 0.14
Total 520 1.000
7

Product quality is the most important focus of the Glasstops Uk therefore, it is weights to
100. Thereafter, service quality comes at the second priority so as to make sure that suppliers
will meet their commitment and supply goods timely so that entity will not face any issue of
shortage. Afterwards, capability, geographical conditions and prices comes at least priority.
Stage 6 – Determining weight of different criteria
this is the most essential elements in an organisations. It reflects the rating of the most
valued criteria in the business firm. They do the same through examine the average age criteria
for any prescribe task and after the finishing of the task, that is exclude therefore ratio changes
in accordance to the importance of the task and process regulars till the offered task is
completed (Subramoniam, 2013). this issue with these problems is that they have various
dimensions to undertake hence it makes the task slow. So for reducing the complexity of the
business structure.
Capability
Suppliers C1 Point C2(machine
hours)
Points
A High 100 Low 40
B Low 40 Medium 70
C Medium 70 High 100
Quality
Suppliers C1 Point C2 Points C3 Points
A 80 80 - 0 0.70 70
B 92 92 - 0 0.95 95
C 67 67 - 0 0.52 52
Geographical conditions
Attribute A B C
Geographical conditions 100 100 100
8

Service
Suppliers C1 Point C2 Points
A 0.83 83 49/86 56
B 0.72 72 22/35 62
C 0.60 60 10/17 58
Price
Attribute A B C
Geographical conditions 50 50 50
Reliability
Suppliers C1 Point C2 Points C3 Points
A 15 65 1 80 8 100
B 20 85 3 100 6 80
C 12 47 1 80 4 55
Normalised values for subcontractors
Normalised values can be computed by dividing the sum of the total values for a given
attributes divided by the total number of criteria.
Attributes A1 A2 A3 A4 A5 A6
Normalised
values
0.17 0.19 0.16 0.18 0.16 0.14
Supplier A 70 75 100 69.5 50 81.67
Supplier B 55 93.5 100 67 50 88.33
Supplier C 85 59.5 100 59 50 60.67
Stage 7 – Weighted value
9

This phase is utilise to calculate the higher values of various criteria that have been taken.
It will creates a bunch of different kind of problem that permits them to manipulate more
different factors. Weighted value is here needs to be use by Glasstops UK to rank all the
suppliers using multi attributes model as follows:
Attributes A1 A2 A3 A4 A5 A6 TEU
Normalised
values
0.17 0.19 0.16 0.18 0.16 0.14
Supplier A 11.9 14.25 16 12.51 8 11.4338 74.0938
Supplier B 9.35 17.765 16 12.06 8 12.3662 75.5412
Supplier C 14.45 11.305 16 10.62 8 8.4938 68.8688
In the above table, suppliers have been ranked by multiplying their normalised values
with the proportion value of weights.
Stage 8- Making provisional decision
After detecting sand examine the various criteria in the business firm. They must creates
that firm makes some decision that allows them to proper in firm. Due to critical examine of
different element it is now easy for Glasstops UK to make decision as they sup up different
elements and makes plans that may avail in the business structure.
Ranking of suppliers
Attributes TEU Ranks
Normalised values
Supplier A 74.0938 2nd
Supplier B 75.5412 1st
Supplier C 68.8688 3rd
10

According to the findings, it is clearly seen that Supplier B’s total expected utility is
found highest to 75.54 therefore; it has been ranked first and suggested Glastops UK to purchase
spare parts from this particular supplier. However, Supplier A’s TEU is 74.09 stood at 2nd
position and Supplier C is found with the total expected utility of 68.86 stood at the last position.
Stage 9 – Performing sensitive analysis
The SMART is known as a multi- objective programming issues having controlled
parameters and structural variables. For making suitable result of any issue a mannered
algorithm is framed that provides details about complexity and sensibility of a particular
problem. All the major elements that are on the most of preference needs to be analysed with the
help of different simulation techniques hence all positive and negative impacts that will be found
out very easily such as In Glasstops UK computer they are concentrating on boosting up their
ability and reduce cost for lean supply through appropriate supplier selection. Through
evaluating market condition the firm makes effective planning for booming in business
organisation. In the given case, Sensitive analysis can be performed by assigning different
weights to the attributes to check the validity of the decisions.
Simple multiple attribute technique (SMART) is a very essential analytical tool to
resolve various decision making issues. It is a analytical techniques that help an organisation to
evaluate various context of the business activities and offers them suitable result so that the
firm can examine and frame planning for the future business. this is complex tool but it has
effective to cover several elements in only on box that relieved out quality in examine different
elements in market (Subramoniam, 2013).
1.4 Strength and limitation of the analysis
The report is about evaluating elements that should be measured and examine so that
Glasstops UK can reduce their cost in the lean supply and determine the best supplier from
whom spare parts should be purchase. The analysis process is done by SMART techniques that
not much effective in providing suitable evaluation of output.
Advantages
 this is as same as traditional CBA therefore it will be calculated as heavy sum of
effective sources.
 Helps in creating the decision making easier.
11

 capable to frame all the prospects in one attribute
 it provides the suitable output of surveys hence it will allows firm to have impressive
planning.
 This facilitates helps in categorization between various prospects according to the
outputs.
 It utilise mathematical technical that provide quality in market analysis.
 This helps in enhancing the profits by expanding the business in its environment
Disadvantages
 lengthy and time consuming process
 complex numerical formulae
 less effectual in small scale firms
 costly software and logical tools
 uncertain about the skillfulness of process
 it disregard poorly performing outlook hence decline the area of betterment.
CONCLUSION
Form the above report it has been concluded that SMART process has limitations and
advantages. They are efficaciously utilized in business environment as prominent analytical
tools. With the help of this evaluation it is determined which that tool will help Glasstops UK to
choose the most appropriate supplier applying SMART technique. After practical application of
the model, it is found that Supplier B is the most appropriate Alterntive exist to Glasstops UK
therefore, it must purchase material from this supplier. The assignment provide strength and
limitation of the analysis too.
12

REFERENCES
Books and Journals
Dane, E., Rockmann, K. W. and Pratt, M. G., 2012. When should I trust my gut? Linking
domain expertise to intuitive decision-making effectiveness. Organizational Behavior
and Human Decision Processes. 119(2). pp. 187-194.
Subramoniam, R., Huisingh, D., Chinnam, R. B. and Subramoniam, S., 2013. Remanufacturing
Decision-Making Framework (RDMF): research validation using the analytical
hierarchical process. Journal of Cleaner Production. 40. pp.212-220.
Fenton‐O'Creevy, M., Soane, E., Nicholson, N. and Willman, P., 2011. Thinking, feeling and
deciding: The influence of emotions on the decision making and performance of
traders. Journal of Organizational Behavior. 32(8). pp. 1044-1061.
Reyna, V. F. and Brainerd, C. J., 2011. Dual processes in decision making and developmental
neuroscience: A fuzzy-trace model. Developmental Review. 31(2-3). pp. 180-206.
Schmoldt, D., Kangas, J., Mendoza, G. A. and Pesonen, M. eds., 2013. The analytic hierarchy
process in natural resource and environmental decision making (Vol. 3). Springer
Science & Business Media.
Pearson, H., 2013. Science and intuition: do both have a place in clinical decision
making?. British Journal of Nursing.22(4). pp. 212-215.
Provost, F. and Fawcett, T., 2013. Data science and its relationship to big data and data-driven
decision making. Big data. 1(1). pp. 51-59.
Fish, R.D., 2011. Environmental decision making and an ecosystems approach: some challenges
from the perspective of social science. Progress in Physical Geography. 35(5). pp. 671-
680.
Daellenbach, H., McNickle, D. and Dye, S., 2012. Management science: decision-making
through systems thinking. Palgrave Macmillan.
Gigerenzer, G. and Gaissmaier, W., 2011. Heuristic decision making. Annual review of
psychology. 62. pp. 451-482.
Zhong, C.B., 2011. The ethical dangers of deliberative decision making. Administrative Science
Quarterly. 56(1). pp .1-25.
Wierenga, B., 2011. Managerial decision making in marketing: The next research
frontier. International Journal of Research in Marketing. 28(2). pp. 89-101.
Gregory, R. and et.al. 2012. Structured decision making: a practical guide to environmental
management choices. John Wiley & Sons.
13