An integrated multicriteria decision-making methodology for outsourcing management

• Published in: Computers & operations research 2007-12, Vol.34 (12), p.3738-3756
• Main Authors: Araz, Ceyhun, Mizrak Ozfirat, Pinar, Ozkarahan, Irem
• Format: Article
• Language: English
• Subjects: Fuzzy goal programming; Outsourcer management; Outsourcer/supplier selection; PROMETHEE
• ISSN: 0305-0548; 1873-765X
• DOI: 10.1016/j.cor.2006.01.014

In this study, an outsourcer evaluation and management system is developed for a textile company by use of fuzzy goal programming (FGP). At first phase of the methodology, evaluation criteria for the outsourcers and the objectives of the company are determined. The existing outsourcers of the company are evaluated by PROMETHEE. At the second phase, the FGP model developed selects the most appropriate outsourcers suitable to be strategic partners with the company and simultaneously allocates the quantities to be ordered to them. In the end, the results achieved are compared with the current situation of the company. The results indicated that scientific methodology for outsourcer management system is very beneficial for the company. Scope and purpose The purchasing activities of a company constitute a very important part in the overall operation of the company. The quality and the delivery capabilities of any manufacturing firm depend heavily on the performance of its suppliers. When companies outsource a significant part of their business and become more dependent on outsourcers, the quality and delivery performance of the company depends totally on its outsourcers. The consequences of poor decision making become more severe. It is therefore too important for an outsourcing type manufacturer to evaluate, manage and select their suppliers. This research proposes an outsourcer evaluation and management system on scientific basis. The procedure developed is made up of two phases. The first one is the evaluation of outsourcers in terms of the decision maker's objectives. This phase is followed by FGP modeling phase which provides the decision maker the list of suitable outsourcers.