Presentation on

A Generic Supplier Selection Model Using Grey Relational

Theory

Presented by

A. H. M. Saifuddin 0711020Md. Mizanur Rahman 0711021Sk. Mohiuddin Al Faruq 0711022

Supervised By

A.M.M. Nazmul Ahsan Lecturer, Dept. of Industrial Engineering & Management(IEM),KUET.

Supplier selection is the process of- choosing supplier for any supply chain- optimizing different criteria of Supplier selection- managing most critical activities of purchasing in

supply chain- involving qualitative and quantitative multi-criteria - consequently bringing out the most promising supplier

for the product.

Supplier Selection in a Nutshell

As global purchasing is becoming more risky. As the advancement of different technologies in

reducing time and cost such as Just In Time. Buyer supplier relation is no longer depends solely

on the price of the product rather than delivery time, quality and flexibility.

It helps assessing competitive market and allocates best option.

Why supplier selection is necessary

Fuzzy logic approach - measure supplier performance - help Decision Making (DM) for appropriate

orderingMultiple Attribute Utility Theory (MAUT) - formulate viable sourcing strategies - capable of handling multiple conflicting

attributes

Available techniques of supplier selection

Analytical Hierarchical Process (AHP) - for prioritizing alternatives when multiple

criteria must be considered - to structure complex problems in the form

of a hierarchyMulti-criteria decision model - for outsourcing contracts based on utility

function. The utility function includes the impacts on cost, delivery time, and dependability.

Available techniques of supplier selection

Multi-Criteria Decision Making (MCDM) - for quality evaluation and performance

appraisal - criteria attributes are both qualitative as well

as quantitative

Grey relational Theory - easily captures the dynamic characteristics of

different factors that in terms helps to save a lot costs and time.

Available techniques of supplier selection

Quick and saves a lot of money and time. It’s a dynamic process that in turns provides

opportunities for change in the number of attributes easily.

It can be easily transform into computer algorithm or program that simply gives a quicker approach in attaining solution.

Emphasizes mostly on objective factors rather than trust or dependency.

Reason to choose grey relational theory

Developed by Deng used to solve the uncertainty problems under the

discrete data and incomplete information especially for those problems with very unique

characteristic

What is grey relational theory ?

Gray Relational Equation

Here -i (j) is the jth value in ∆i difference data series.

- is called distinguishing coefficient (=0.5).

Grey Relational Theory

Data collected from Aftab Automobiles for the break system of Automobiles.

Several Attributes are chosen from different suppliers.

Cost and other attribute’s quantities against each Supplier has been tabulated.

Methodology

Data Analysis

Table 1 : Attributes for hydraulic brake system of a vehicle

Data Analysis

Table 2: Grey Relational Generation (Normalized, Reference Data Series)

Table 2: Grey Relational Generation (Normalized, Reference Data Series)

Table 3: Loss Estimates

Data Analysis

Gray Relational Equation

Here -i (j) is the jth value in ∆i difference data series. - is called distinguishing coefficient (=0.5).

Data Analysis

Table 4: Grey Relational Coefficients and overall Grey Relational Grade

Data Analysis

Table 5: Ranking of each supplier according to their Grey Relational Grade

Results

Fig: Comparison of grey relational coefficient between various suppliers

Results

In Recent times – Grey Relational Theory have found to be most

effective and promising in respect of time and cost. All the subjective and objective factors are equally

calculated for the entire set of suppliers. This paper has created future opportunities on

automation of supplier selection process. It was found to be dynamic process which responds

in a quickest possible way for any change.

Discussion

Due to the advantages of Grey multiple attributes decision, this paper proposes -

For new supplier selection, it is very convenient to perform overall measurement based on each company’s requirements.

The company can choose its own appropriate goal for each selection factor based on the characteristic demand of raw materials

Based on the preceding discussion, it is judged that the proposed Grey multiple attributes decision method is very precise on the whole. It can overcome the ambiguity arising from the measured parameters of each attribute.

Conclusion

Q & A Session

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THANKS TO ALL