From Traditional Purchasing to Supplier Management: A Fuzzy Logic-based Approach to Supplier Selection

Abstract

Making a decision requires the consideration of possible alternatives and then selecting the optimal one. This selection process generally relies quite considerably on subjective judgement. The intrinsic difficulty of any decision is increased by the unavailability of precise or complete information. This kind of problem exists when selecting the most appropriate supplier and it is worsened when purchasing managers are willing to adopt advanced approaches to supplier selection and auditing whereby less traditional criteria are considered. In fact, when dealing with such factors as the supplier's effort to implement total quality management principles, its capacity to adapt flexibly to changes in the customer's requirements, its technological profile, its capacity to operate in a just-in-time supply perspective and its organisational culture, the subjective and qualitative dimensions of the purchaser's judgements become paramount. In this paper, we develop a system for supplier selection using fuzzy logic. Fuzzy logic enables us to emulate the human reasoning process and make decisions based on vague or imprecise data. The approach seems to be particularly effective in reducing the uncertainty inherent in the determination of the relative importance (weight) given to the different criteria and in determining the impact of each alternative supplier on the attributes considered.