Supplier management by distributing orders among new and existing suppliers: the methodology and its application to a fast fashion company


Alagoz B. A. , TESTİK M. C. , DİNLER D.

JOURNAL OF FASHION MARKETING AND MANAGEMENT, 2021 (Peer-Reviewed Journal) identifier identifier

  • Publication Type: Article / Article
  • Publication Date: 2021
  • Doi Number: 10.1108/jfmm-04-2021-0080
  • Journal Name: JOURNAL OF FASHION MARKETING AND MANAGEMENT
  • Journal Indexes: Social Sciences Citation Index, Scopus, ABI/INFORM, Business Source Elite, Business Source Premier, INSPEC
  • Keywords: Supply chain, Supplier selection, Order distribution, Supplier evaluation, Supplier monitoring, Fast fashion, AHP MODEL, SELECTION, ALLOCATION, CRITERIA, SYSTEM

Abstract

Purpose This study aims to create a reliable, collaborative and sustainable business environment with suppliers of a company for providing high-quality and low-cost products on time. A supplier management system that sustains existing suppliers by sharing work based on systematic performance evaluation while developing the supplier base with potential suppliers is proposed. Design/methodology/approach Built on quantitative approaches, supplier management functions are integrated in the designed system. A quantitative strengths, weaknesses, opportunities and threats (SWOT) analysis is adapted for evaluating potential suppliers. A multi-objective integer linear programming (ILP) model is developed for the distribution of orders among selected potential and existing suppliers. A performance evaluation scheme based on an exponentially weighted moving average (EWMA) is proposed to evaluate and monitor suppliers' performance over time. Findings Proposed system develops a supplier base by methodically selecting and approving new suppliers, and a sustainable relationship with both new and existing suppliers is established based on performance over time. Decisions on retaining or removing suppliers from the base are objectively made by quantitative evaluations. Orders are fairly distributed among suppliers under the constraints imposed by the management. Dependence on a certain set of suppliers and its associated risks are reduced while agility in offering goods is enabled. Originality/value Business processes for selecting new suppliers, distributing orders among all suppliers, evaluating and monitoring performance over time are quantitatively integrated to add value in operational decision-making. The proposed system is original in the holistic approach for managing and sustaining multiple suppliers of a company based on performance.