Developing a quality-based supplier selection model from the buying company perspective

ABSTRACT

In the face of increased competition and globalization, supply chain management has become a crucial aspect of securing competitive advantage. Within this, the quality offered by suppliers is vital. Thus, in this paper, we develop a model to select the best supplier based on process quality from the perspective of the buyer. We first employ the process capability index $S_{pk}$, which can provide an exact measure of process yield, to evaluate the process quality of suppliers. However, $S_{pk}$ must be estimated from preliminary samples or obtained subsamples. This increases uncertainty and can lead to miscalculation. To ensure the reliability of assessment, we derive the lower confidence limit of $S_{pk}$ to serve as a standard of process quality assessment and construct a process capability analysis chart to select the best supplier. The chart also provides recommendations for process improvement to serve as a reference for suppliers with poor performance. Finally, we present two real-world case studies to demonstrate the practical applicability of the proposed method.

KEYWORDS:

• Supplier selection
• process quality
• process capability index
• lower confidence limit
• process capability analysis chart

Acknowledgments

The authors would like to thank the Editor and three anonymous referees for their constructive comments and valuable insight, which significantly improve the presentation of our paper. The earlier version of this paper was presented at the 10th European Decision Sciences Conference, June 2-5, 2019, held in Nottingham, UK.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Kuen-Suan Chen

Kuen-Suan Chen is currently a Lifetime Distinguished Professor of the Department of Industrial Engineering and Management at National Chin-Yi University of Technology, Taiwan, Republic of China. He obtained his Ph.D. degree in Industrial Engineering and Management from the National Chiao Tung University in 1995. His research interests include statistical process control, quality management, process capability analysis, performance evaluation method, and Six Sigma. He has published in International Journal of Production Research, International Journal of Production Economics, Journal of Quality Technology, Quality Engineering, Computers & Industrial Engineering, Journal of Computational and Applied Mathematics, Applied Mathematical Modelling, Annals of Operations Research, etc.

Leanne Chung

Leanne Chung is currently a Senior Lecturer (Associate Professor) in Human Resource Management and Organizational Behaviour at the Cardiff Business School. She has a cross-disciplinary background. Her initial training was in Organizational Psychology in Taiwan and Hong Kong. She then studied for her PhD in International Business and Management at the Judge Business School, University of Cambridge. She currently focuses on innovation management, headquarter-subsidiary relationships, and managerial control, with particular reference to Chinese multinational corporations.

Tsang-Chuan Chang

Tsang-Chuan Chang is currently an Assistant Professor of College of Intelligence, National Taichung University of Science and Technology, Taiwan. He received the Ph.D. degree in the Department of Industrial Management in National Taiwan University of Science and Technology, Taiwan. His current research interests include service management, process capability analysis, Six Sigma methodology and applications, performance evaluation, and quality management. His research has been published in Total Quality Management & Business Excellence, Journal of Testing and Evaluation, Journal of Engineering Manufacture, International Journal of Production Research, etc.