Track: Supply Chain Management

Abstract

Supplier selection is one of the most influential decision an organization can make towards their operational efficiency. However, this activity can become highly resource-intensive in the absence of a structured framework, especially in supply chains involving large numbers of components. This research aims to utilize risk assessment as a tool to screen for construction equipment components that should be considered for re-sourcing to new suppliers. The severities of risks are evaluated by cost of poor quality and occurrence by the frequency of nonconformities. High-risk components were selected for a change of suppliers. Multi-criteria decision-making – analytic hierarchy process (MCDM-AHP) is then used to determine the suitable weights of 12 supplier evaluation criteria between four different managers.  Suppliers with the highest results are selected. Once new suppliers are selected, a second risk assessment is conducted to review the impact of the change in suppliers to the cost of poor quality and frequency of nonconformities.