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Multi-stage hybrid model for supplier selection and order allocation considering disruption risks and disruptive technologies

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  • Kaur, Harpreet
  • Prakash Singh, Surya

Abstract

In recent times, Supply chains are required to undergo the structural changes in order to adapt to the positive events such as Industry 4.0 and negative events such as natural and man-made disasters. Both positive and negative events tend to cause disruptions and affect business operations continuity. Supplier selection, being the critical and foremost activity must ensure that selected suppliers are capable of supporting the organizations against disruptions caused by these events. Hence, supplier selection and order allocation must be restructured considering the dynamics of Industry 4.0 and disaster events to ensure undisrupted flow of materials across supply chain. The paper proposes a multi stage hybrid model for integrated supplier segmentation, selection and order allocation considering risks and disruptions. The suppliers are then evaluated based on set of criteria suitable in Industry 4.0 environment using Data Envelopment Analysis (DEA) and are further prioritized using Fuzzy Analytical Hierarchical Process and Technique for Order of Preference by Similarity to Ideal Solution (FAHP-TOPSIS). The risk associated with each supplier is computed. The paper also proposes a Mixed Integer Program (MIP) as to optimize multi-period, multi item order allocation to suppliers in such a way that overall cost and risk of disruption is simultaneously minimized. In event of any disruption either from supply or demand side, the multi-stage hybrid model tends to reduce its economic impact by allocating emergency orders, thus, ensuring business operations continuity. The proposed multi-stage hybrid model is illustrated using a case of an automobile company.

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  • Kaur, Harpreet & Prakash Singh, Surya, 2021. "Multi-stage hybrid model for supplier selection and order allocation considering disruption risks and disruptive technologies," International Journal of Production Economics, Elsevier, vol. 231(C).
    • Handle: RePEc:eee:proeco:v:231:y:2021:i:c:s0925527320302000
    DOI: 10.1016/j.ijpe.2020.107830
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    6. Huilin Li & Jiaqi Yang & Ziquan Xiang, 2022. "A Fuzzy Linguistic Multi-Criteria Decision-Making Approach to Assess Emergency Suppliers," Sustainability, MDPI, vol. 14(20), pages 1-17, October.
    7. Urbaniak Maciej, 2021. "Role of supplier evaluation criteria in risk mitigation related to purchasing process," Engineering Management in Production and Services, Sciendo, vol. 13(2), pages 96-106, June.
    8. Moacir Godinho Filho & Luiza Monteiro & Renata de Oliveira Mota & Jessica dos Santos Leite Gonella & Lucila Maria de Souza Campos, 2022. "The Relationship between Circular Economy, Industry 4.0 and Supply Chain Performance: A Combined ISM/Fuzzy MICMAC Approach," Sustainability, MDPI, vol. 14(5), pages 1-21, February.
    9. Niloofar Jahani & Arash Sepehri & Hadi Rezaei Vandchali & Erfan Babaee Tirkolaee, 2021. "Application of Industry 4.0 in the Procurement Processes of Supply Chains: A Systematic Literature Review," Sustainability, MDPI, vol. 13(14), pages 1-25, July.
    10. Tseng, Ming-Lang & Bui, Tat-Dat & Lim, Ming K. & Fujii, Minoru & Mishra, Umakanta, 2022. "Assessing data-driven sustainable supply chain management indicators for the textile industry under industrial disruption and ambidexterity," International Journal of Production Economics, Elsevier, vol. 245(C).
    11. Mehdi Keshavarz-Ghorabaee, 2023. "Sustainable Supplier Selection and Order Allocation Using an Integrated ROG-Based Type-2 Fuzzy Decision-Making Approach," Mathematics, MDPI, vol. 11(9), pages 1-33, April.
    12. Islam, Samiul & Amin, Saman Hassanzadeh & Wardley, Leslie J., 2021. "Machine learning and optimization models for supplier selection and order allocation planning," International Journal of Production Economics, Elsevier, vol. 242(C).
    13. Aida Rezaei & Amir Aghsami & Masoud Rabbani, 2021. "Supplier selection and order allocation model with disruption and environmental risks in centralized supply chain," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 12(6), pages 1036-1072, December.
    14. Maciej Urbaniak & Piotr Rogala & Piotr Kafel, 2023. "Expectations of manufacturing companies regarding future priorities of improvement actions taken by their suppliers," Operations Management Research, Springer, vol. 16(1), pages 296-310, March.
    15. Liu, Zhongyi & Li, Mengyu & Lei, Ying & Zhai, Xin, 2022. "A joint strategy based on ordering and insurance for mitigating the effects of supply chain disruption on risk-averse firms," International Journal of Production Economics, Elsevier, vol. 244(C).
    16. Mohammed, Ahmed & Lopes de Sousa Jabbour, Ana Beatriz & Koh, Lenny & Hubbard, Nicolas & Chiappetta Jabbour, Charbel Jose & Al Ahmed, Teejan, 2022. "The sourcing decision-making process in the era of digitalization: A new quantitative methodology," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 168(C).
    17. Wu, Yang & Wang, Ziyang & Yao, Jianming & Guo, Haixiang, 2023. "Joint decision of order allocation and lending in the multi-supplier scenario purchase order financing," International Journal of Production Economics, Elsevier, vol. 255(C).
    18. Adnan Al-Banna & Zaid Ashraf Rana & Mohammed Yaqot & Brenno Menezes, 2023. "Interconnectedness between Supply Chain Resilience, Industry 4.0, and Investment," Logistics, MDPI, vol. 7(3), pages 1-23, August.
    19. Kraude, Richard & Narayanan, Sriram & Talluri, Srinivas, 2022. "Evaluating the performance of supply chain risk mitigation strategies using network data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1168-1182.
    20. Federico Toffano & Michele Garraffa & Yiqing Lin & Steven Prestwich & Helmut Simonis & Nic Wilson, 2022. "A multi-objective supplier selection framework based on user-preferences," Annals of Operations Research, Springer, vol. 308(1), pages 609-640, January.
    21. Katerina Fotova Čiković & Ivana Martinčević & Joško Lozić, 2022. "Application of Data Envelopment Analysis (DEA) in the Selection of Sustainable Suppliers: A Review and Bibliometric Analysis," Sustainability, MDPI, vol. 14(11), pages 1-30, May.

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