A fuzzy logic approach to supplier evaluation for development

Decision making techniques used to help evaluate current suppliers should aim at classifying performance of individual suppliers against desired levels of performance so as to devise suitable action plans to increase suppliers׳ performance and capabilities. Moreover, decision making related to what course of action to take for a particular supplier depends on the evaluation of short and long term factors of performance, as well as on the type of item to be supplied. However, most of the propositions found in the literature do not consider the type of supplied item and are more suitable for ordering suppliers rather than categorizing them. To deal with this limitation, this paper presents a new approach based on fuzzy inference combined with the simple fuzzy grid method to help decision making in the supplier evaluation for development. This approach follows a procedure for pattern classification based on decision rules to categorize supplier performance according to the item category so as to indicate strengths and weaknesses of current suppliers, helping decision makers review supplier development action plans. Applying the method to a company in the automotive sector shows that it brings objectivity and consistency to supplier evaluation, supporting consensus building through the decision making process. Critical items can be identified which aim at proposing directives for managing and developing suppliers for leverage, bottleneck and strategic items. It also helps to identify suppliers in need of attention or suppliers that should be replaced.