SUPPLIER SIFT - A STRATEGIC NEED OF MODERN ENTREPRENEURSHIP

Abstract

In today’s modern manufacturing where the technology and innovation has changed the production environment and put enough pressure on the entrepreneurs to redesign their production strategy and supply chains to cope up the impetus of highly competitive market. Supplier appraisal fosters energy in Supply Chain Management and helps in best optimization of viable business partners for a company. It is envisaged that the procurement of raw material / services usually follow 80 / 20 Pareto Law. The benefits accrued due to operational integration between suppliers and stakeholders are obvious. Supplier appraisal process is a multi-criteria decision making (MCDM) problem, as few tangible and intangible factors have significant bearing on decision making. Many Decision Making techniques have already been proposed by researchers for supplier’s appraisal. However, Analytic Hierarchy Process (AHP) is assumed to be the most structured technique to attain near-best solution of the problem. After thoroughly studying AHP technique, it is implemented for suggesting a viable model for supplier appraisal in PSEs which can subsequently, help in prioritizing and ranking the criteria against each alternative. It is observed that cost overrun, increased throughput time and quality like issues are clearly visible chiefly in Public Sector Enterprises (PSE). The procurement procedures are governed by Public Procurement Regulatory Authority (PPRA) rules 2004. The rules explicitly define prequalification, bidding, registration and tendering procedures, emphasizing supplier selection on the basis of lowest bidding. The researchers found that the Lowest Bidding has few inherent implications which refrain Industries in pursuit of their strategical objectives. Through structured questionnaire, various criteria and suppliers are sifted to design an AHP model and deriving meaningful results. AHP model so developed is to show the workable framework to be used by PSEs for supplier appraisal. It also suggests that on what factors a PSEs must focus while dealing with their suppliers and what should the suppliers do to synchronize their activitities with the strategical objectives of Organization.