Abstract

Supplier Risk Assessment and Selection under Disruption based on DMAIC and AHP Approaches.
Ali Khabbazian, Ph.D.
Concordia University, 2024

In today’s competitive business environment, different organizations are advancing their supply chain network to improving the quality of products and to reduce lead-time and total costs. Supplier risk is defined as “the possibility that a supplier will fail to supply their commitments to buyer company.” Business processes and projects that build trust only on suppliers may face higher risks/ failure/ loss. In some circumstances, businesses decide to mitigate these risks by diversifying their suppliers.
With the complication and globalization of outsourcing in today’s supply chains and from the other side with consideration of optimization techniques such as lean and just-in-time manufacturing for improving efficiency, they all together increased supply chain sensitivity and disruptions to even minor supply disruptions. Although these models facilitated companies to moderate overall costs and grow rapidly into new markets, they also exposed these companies to be at risk of supplier disruption, closing operations, or being acquired for companies. Considering several types of supply disruptions, the most intensive disruptions have a fairly low probability of occurrence with very high severity of impact when they occur, like COVID. While such risks cannot be eliminated, however, its intensity can be reduced.
It’s almost unmanageable to eliminate risk from the supply chain totally. However, businesses can minimize the risk and even eliminate the impact of certain risk events with cautious planning, tools, and processes to expect and manage risk more effectively.

There was many discussions and case studies about the affect of agility, lean manufacturing, and innovation of the enterprise and how it can help the companies to be more comparative in business environment. However most business they are neglectful about disruptions failures and necessary actions to face it.


Keywords: Supplier Selection, Supply Chain, Supply chain disruptions, Order allocation, Metaheuristics, DMAIC, Project Charter, Cost of Delay, Voice of the customer (VOC), Critical to Quality (CTQ), AHP, SIPOC, Pareto chart, Cause and Effect Diagram, Process Map Analysis, Regression Analysis, Supplier Development