Evaluation and Ranking of Criteria Affecting the Supplier’s Performance of a Heavy Industry by Fuzzy AHP Method

Abstract

Heavy Industry is an industry that involves one or more characteristics such as Large and Heavy Products; Large or Heavy Equipment and facilities; or Complex and Numerous Processes. Outsourcing in heavy industry sector has gained a strategic importance in order to survive in the cost and quality conscious environment. In order to meet the customer demand promptly, any industry must have a healthy and competent supplier base. The purpose of this paper is to evaluate and rank the criteria affecting the performance of the suppliers of a Heavy Industry (BHEL, Tiruchirappalli) by using Multi Criteria Decision Making Tool (MCDM) – Fuzzy Analytical Hierarchy Process (AHP). The Criteria and Sub Criteria affecting the supplier performance have been decided by a team of experts from the industry and through literature study. AHP derives the relative weights of the criteria using pairwise comparison between criteria in a hierarchical system. It also provides a clear picture to the industry about the importance of various factors affecting the performance of the suppliers. This research helps the industry and its suppliers to identify the factors in which they need to strengthen in order to improve their performance.