Strategic Procurement: Supplier Selection using MCDM Models

STRATEGIC PROCUREMENT
0

Table of Contents
Introduction......................................................................................................................................2
Literature Review............................................................................................................................3
Method.............................................................................................................................................6
Case study findings and analysis.....................................................................................................8
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
1

Introduction
Strategic procurement refers to an organization based process and it needs input from all sectors
and functional zones for the organization. Mainly strategic procurement team is created for
selecting relevant suppliers of the inputs so that inputs can be utilized to fulfil business
objectives. The company dealing with medical devices is facing complexities regarding selection
of right supplier. Selection of suppliers refers to the way of selecting a right individual from
whom necessary raw materials can be collected for supporting organizational production. It is the
duty of the procurement manager to select the right supplier from various suppliers depending
upon sustainability performance of the company so that value of the company can be maximized
(Azadnia et al., 2015). Selection of right supplier is always important because it helps in cost
reduction and also ensures proper quality of the product to be produced by the organization. The
company is facing a problem of supplier selection so that proper understanding of the medical
equipments is possible and also safety of the equipments is ensured. Research objective refers to
the selection of right supplier by the procurement manager so that proper inputs are delivered to
the company and business performance is improved. Once the supplier is selected, challenge
faced by the company related to supplier selection will be solved and supplier selection will be
done using MCDM models. Implication of the research is to solve the problem of supplier
selection and meet business objectives dealing with safety and quality of medicine products other
than cost. Methodology will be followed by a questionnaire method where seven decision
makers and two managers will be interviewed related to the topic. Various data will be identified
from reviewed articles and journals to carry on with the critical analysis and proper outcome will
be reached solving the issue of supplier selection. Articles and journals will be reviewed to focus
2

on MCDM models that will help procurement manager to carry on with the supplier selection
effectively.
Literature Review
In the given article importance of supplier selection process is discussed which is actually
helping to maintain business strategies. According to Nair and other authors, selecting relevant
supplier for a business process is long term concept and such process is mainly helping the
producer to reduce the cost of production. Supplier selection process is playing an important role
for every organization because it is focusing on price negotiation, purchasing condition of the
materials and finally selection of the right supplier (Nair et al. 2015). In contrast to the
discussion it can be said that the given medicine company is more concerned about the quality
and safety of the products as compared to the product price. Even if the article is reflecting the
importance of supplier selection it is required to focus on MCDM models for further analysis.
As mentioned in article, MCDM refers to Multiple Criteria Decision Making and it refers to a
research which helps in evaluating various complex criteria in decision making process. In other
words, such models are helping in decision making process of complex ideas both in normal life
and in setting objectives of business and medicines (Silva and Figueiredo, 2018). Thus the model
can be utilized for selecting right supplier for the medicine company so that quality and safety of
the products can be maintained.
The article mainly focuses on two classes of MCDM and those are MADM and MODM. MADM
refers to the ultimate option chosen from all the available options so that it becomes easy to
evaluate decision making process and business objectives can be fulfilled. MODM however
mainly focuses on objectives in particular and it helps in advancing different objectives of the
3