Strategic Supplier Selection for Medical Devices Using MCDM Models

This case study examines the strategic supplier selection process within a medical device company, focusing on the application of Multi-Criteria Decision Making (MCDM) models to address the complexities of choosing the best supplier based on sustainability performance. The study reviews literature on supplier selection, MCDM models like MADM and MODM, and Sustainable Supply Chain Management (SSCM) practices. It highlights the importance of balancing cost considerations with quality and safety requirements, particularly in the medical device industry. The methodology involves interviewing decision-makers and managers within a food and drug administration Company to understand their current supplier selection processes and challenges. The case study findings analyze the company's background, competitive landscape, and the role of SSCM in enhancing supplier effectiveness. Ultimately, the report aims to demonstrate how MCDM models, specifically the Analytic Hierarchy Process (AHP), can be utilized to improve supplier selection decisions, ensuring both sustainability and the quality of medical devices. The report concludes by emphasizing the need for a holistic approach that considers safety, quality, and cost factors in supplier selection.

STRATEGIC PROCUREMENT
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Table of Contents
Introduction......................................................................................................................................2
Literature Review............................................................................................................................3
Method.............................................................................................................................................6
Case study findings and analysis.....................................................................................................8
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
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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
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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
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decision maker. In contrast to the given area, it can be said that procurement manager of the
company will take help of MCDM model to select the right supplier for the company so that
quality of the products can be maintained and safety of the products will be also be ensured.
Multi criteria decision making model is an essential tool for assessing monetary advantage,
solving decision making problems and helps the manager of the company to select the right
supplier in particular (Luthra et al. 2017). Luthra and other authors consider the model for
recognizing and investigating a particular choice from the other given choices so that qualities
can be mentioned by the decision makers. For selecting the best choice, the author mainly
focused on number of options and chose the best one as per the objective of the business. The
articles focused on MCDM Models to manage complicated decision making process but
selection criteria of medicine departments are not discussed properly. The given report will
highlight MCDM model for selecting the best supplier so that challenges of the medicine
company can be solved and ultimate business objectives can be achieved.
The article focuses on SSCM practice or Sustainable Supply Chain Management and is mainly
discussing four stages for developing an effective network of supply chain. Supply chain
management discusses the involvement of members of the company from defining the business
process to the production of the ultimate product (Dubey et al. 2017). SSCM practice is helping
the company to bring the input from the correct suppliers and carry on with the business process
till the product is produced.
The first stage refers to supply management where only those suppliers are included who are
dealing with transaction based communications. Selection of right supplier is always important
because it helps in cost reduction and also ensures proper quality of the product to be produced
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by the organization. Second stage refers to supply chain management where suppliers are sharing
important information along with transaction related communications. Third stage is integration
of supply chain which is followed by the company for benefiting all the members involved in the
chain (Fallahpour et al. 2017).
The last stage refers to supply of essential information for making supply network a successful
one. All such stages are mentioned in the article to deal with supply chain management properly
and it also helps in understanding the right supplier for every stage of supply chain management
and also improves process of production. The given study is focusing on selection of right
suppliers so that quality and safety of medicine equipments can be mentioned and such ideas are
not mentioned in the reviewed studies. Even if MCDM model tried to show its utilization in the
medicine department, it failed to focus on quality maintenance and safety. All the ideas and
thoughts from the previous studies should be considered along with the gaps so that critical
analysis on supplier selection is done effectively to meet the objectives of the given company.
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Method
This study has been completed with the help of interview session with the managers of the food
and drug administration Company. Total 7 decision makers were asked few question regarding
the medical equipments and tools used by them. The scale, which the company is using for
collecting and gathering data and information, is very high. The scale, that is used by the
decision matrix ranges from 1 to 9. As commented by Mathivathanan et al. (2018) there are
mainly five subscales namely equally importance, much more importance, more important and
many more. Based on the case study it has been observed that there are three main suppliers of
this FDA company and this company has been adopted an effective tool namely MCDM for
selecting the suppliers easily.
The main motive of using this model is due to its effectiveness and three main qualities it
provides namely safety, sustainability and the quality. It has been observed from the case study
that XYZ is the manufacturer of the company and it manufactures the medical devices since
1992. As per the views of Saberi et al. (2019), there is an increase in competition and the number
of competitors have been raised which is the major issue faced by XYZ manufacturers. The
market share of the company has been taken by new a competitor who has slowed down the
perspective for future growth and development. The main problems identified from the case are
regarding the supplier selection; therefore MCDM model will he to solve the issues.
Interview
Questions Manager 1 Manager 2
What types of method did you
use to enhance the selection
According to me the main
problems which our company
I believe that to increase the
efficiency of supplier selection
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process? is facing is regarding the
selection of suitable suppliers.
In order to avoid future
challenges I and my team have
started using decision matrix
process and other decision
making strategies to raise the
quality.
process it is crucial for whole
team to interact and
communicate with each other.
It is important for every
members of the company to
collaborate and cooperate with
each other.
Is MDCM tool and decision
matrix is helpful for your
company?
Yes, I personally believe that
these tools have enhanced our
decision making power and
multi criteria decision making
process is quality strategy to
establish a decision which is
accomplished using an
analytic hierarchy process.
As per my point of view
decision matrix is the better
way for selecting effective
strategy for selection of the
suppliers.
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Case study findings and analysis
This report is based on the decision making problems of the suppliers and they are using
Analytic hierarchy process. The company which is been used in the case study is associated with
the US agency which helps to supervise the drugs, medicines, dietary supplement along with
cosmetics, animal foods and blood products. As commented by Hong (2018), the medical device
is an essential tool used by the care users in order to investigate and monitor the psychological
processes. It has been analysed that XYZ are the manufacturers of this company and these
medical equipments are used in laboratories a well as operating rooms and x-ray domains.
It has been illustrated that the company FDA should check the quality of the products and goods
in order to satisfy the needs of the customers. In the year 1992 it has been observed that XYZ
have been emerged which is a medical manufacturer and it was linked with the FDA for many
tears. With the emergence of new competitors in US market has increase the competition and
level of competition. As stated by Zhang et al. (2018), the strategy which was used by the FDA
recently to raise their profitability is by decreasing the selling price of the medical tools. It has
been observed that the main problem which is faced by the company is regarding the selection of
the suppliers.
This study mainly concentrates on the sustainable supply chain management in order to raise the
effectiveness of the FDA Company. As per the views of Roy et al. (2018), SSCM practice is
important for increasing the positive impact of the environment on the individuals. It helps the
company to examine the economic, political as well as social impact of the company on the
target customers. The pressure which is created by the government on the employees of the
company is one of the main reasons behind implementation of SSCM practices. In order to
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accomplish their goals in future it is their responsibility to enhance the effective supplier of
medical devices. It is of utmost importance to develop an appropriate step towards sustainability
plan by setting a goal. Moreover it is important for the individuals to develop a common goal for
both the suppliers as well as other customers. The main motive of this paper is to depict the
impact of SSCM strategy on the manufacturing firm of the company. The main motive of the
Multi criteria decision making tool is to examine various processes such as solving decision
making problems, and it helps the procurement manager of the company to select the right
supplier. Sustainable supply chain management system helps to depict the four effective stages
of the suppliers.
It has been observed that there are two types of practices present in the SSCM that is sustainable
supply chain management namely internal and external management. It helps to illustrate the
implementation of SSCM reflected that, economic performance of the individuals are associated
with both environmental and social factors. As per the views of Castillo et al. (2018), in addition
it has been evidenced that the technique of supply chain management has been increasing, which
has helped to minimize the cost price and raise the profitability index. It is a positive approach
towards increasing the effectiveness and growth of the country. It has been observed that the
supplier selection process is effective in every company because it help to improve the process of
price negotiation as well as purchasing process. Based on the vase study, it has been observed
that the company needs a well-developed and effective model to obtain quality results. In
addition, it was illustrated that the AHP model was categorised into three sub parts namely cost,
quality, sustainability and safety. The fur factors of AHP model are as follows:
 Cost
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The cost is the first factor of AHP model which determine the price of products and purchasing
costs which the company should invest for manufacturing of other medical devices. The
additional cost will be invested or the maintenance purpose and end of cycle indicates that the
cost which will be invested when the components are of no use.
 Quality
The quality of this model helps to provide accurate and precision result as it was related with the
health and treatment of the care users this medical device should have quality properties to
handle and provide the proper diagnosis and treatment. The comfort of people indicates the rate
of discomfort as well as pain a person is suffering due to the medical device. As stated by
Rostamzadeh et al. (2018), the durability of the model indicates that the time period it will
consume to show the result. In addition, the design indicates the physical factors such as size and
weight of the machines associate with the components of the suppliers.
 Sustainability
Sustainability is been affected by the environmental factors in the time of production and
manufacturing of the components. It has been observed that the high consumption rate of energy
and the impact of environment might affect the medical device on a large scale. The last factor
that is recycling determines the environmental factors which affect the operation of the FDA
Company which manufactures the medical devices.
 Safety
Safety factor of the model indicates that this device is easy for use and it is the responsibility of
the company to train the employees before using the devices. It helps to increase the safety of the
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patients and help in the treatment of the care users. It enhances the safety for the doctors by
helping them to measure the risks of the patients and it determines the rat of risks.
The main motive of this model is to determine the medical device quality and the issues
associated with the model. This SSCM model mainly highlights the modern issues of the medical
device and every company wants to maintain the quality of the device. After evaluating the
model and its application it can be suggested that weight is the main criteria to enhance the
performance of the suppliers. The matrix model indicates that the company is concentrating
towards increasing the performance and quality of the model. As stated by Xiao et al. (2019), it
have been illustrated that the third supplier was appropriate and he can help the company to fulfil
all the needs of the FDA Company and the XYZ manufacturers. It has been illustrated that the
AHP model can be used by the company in order to select right supplier for the medical devices
company; it can be stated that the quality and safety of the medical equipments and products can
be enhanced. It has been observed that the article mainly concentrates on two main domains of
MCDM. The FDA Company and their manufacturers stated that their performance level is based
on the AHP model.
1 5 1 4 3 2 3 4
3 4 4 2 3 1 3 4
2 3 1 5 2 4 4 5
3 5 5 4 4 5 1 2
1 4 3 3 4 3 4 5
4 5 1 4 3 5 2 3
1 5 5 3 2 5 3 4
2 4 4 4 1 4 4 5
5 5 2 3 1 1 1 2
1 4 1 4 4 4 4 5
1 3 4 5 3 1 4 5
11C
B
A
Criterion 4Criterion 3Criterion 2Criterion 1