Vendor Selection Using Interpretive Structural Modelling (ISM)

Abstract

Vendor selection is one of the most important activities of a purchasing department. Traditionally, vendors are selected for their ability to meet the quality requirement, delivery performance and the price offered. However, as they are selected not only to meet the immediate requirement but also future needs, one needs to consider many other factors when selecting a reliable vendor. Analyses some of the most important criteria which have been classified into four categories: autonomous, dependent, linkage and driver depending on their driver power and dependence. Develops an interpretive structural model (ISM) to show the inter‐relationship of different criteria and their levels of importance in the vendor selection process. Reveals that “attitude and willingness for business” and “after sales service” are as important factors as quality, delivery and practice. These criteria are dependent on all the others. This analysis could provide a meaningful analytical base in the vendor selection process.