A Methodology for Incorporating Resilience into Supplier Evaluation

Researchers: Shuting (Tina) Peng, Po-Wei (Ben) Chang, Boyu (MK) Wang

The increasing frequency and severity of global supply chain disruptions highlight the critical need for robust, risk-conscious supplier evaluation that incorporates resilience. This project aims to develop a decision-making framework for procurement managers to effectively evaluate and rank suppliers across four key dimensions: quality, cost, delivery speed, and disruption risk.

 The methodology integrates expected value analysis, indifference probabilities, and pairwise comparisons, quantifying each dimension on a unified economic scale. A user interface was developed with the following inputs for each supplier: procurement cost, non-conformance rate, late delivery prediction, and disruption probability over the planning period. The framework consists of four analysis stages. Each stage uses color-coded matrices to display uncertainty and employs binary searches to determine indifference probabilities. The first three stages progressively integrate each dimension and assess the monetary differences between each pair of suppliers, while the last stage converts these comparisons into a final supplier ranking.

Overall, the framework equips procurement managers with a comprehensive tool to make informed supplier decisions, addressing the complexities in supplier evaluation.