Implementation of Interpretive Structural Model and Topsis in Manufacturing Industries for Supplier Selection

Abstract

The world is becoming international marketplace and the international environment is pushing industries to take practically everything into attention. In recent years supplier selection and order distribution as an important part of supply chain management are facing extraordinary challenges and difficulties.  High customization and fast changing market stresses on modern supply chain management. Growing flexibility is needed to remain competitive and respond to quick changing market in this state supplier selection represents one of the most significant function to be done by the purchasing division.  Supplier selection is the process by which industries classify, calculate, and deal with suppliers. In order to select the finest supplier it is necessary to make a compromise between these tangible and intangible criteria. The supplier selection method deploys a tremendous amount of a firm’s financial resources. In return, firms expect significant benefits from contracting with suppliers presenting high value. This research investigates and examines supplier selection criteria and the impact of supplier selection to the industry performance. Interpretive structural modeling (ISM) and technique of order preference by similarity to ideal solution (TOPSIS) methods are used by the researcher for selecting finest supplier. ISM help to find the important criteria used by the firm and topsis give the rank to the supplier. The results show that the planned method is capable of improving the shape of manufacturing systems and delivers pictured information for decision manufacturers.

Keywords: - Supply Chain Management, Supplier Selection, ISM, TOPSIS Method