Performance evaluation of existing vendors using Analytic Hierarchy Process

Abstract

This study, done on a light engineering industry situated at Faridabad having most of the vendors within 10 km radius, evaluates the performance of existing die casting vendors. The organization wants to reduce existing die casting vendors from five to three. System adaptability criterion consists of factors such as green manufacturing, support to lean manufacturing by adapting Direct on Line (DOL) system. Other criteria are cost, quality, schedule adherence and general cooperation. The management guided for the weightage to different criteria. Performance of the vendors was evaluated using Analytic Hierarchy Process (AHP), which is a powerful and flexible decision-making tool for complex, multi-criteria problems. Consistency ratio was checked. Composite rank was calculated for vendors. Based on composite rank score recommendations were made. After that number of vendors reduced to streamline the supply chain.