Supplier evaluation and management system for strategic sourcing based on a new multicriteria sorting procedure

Supplier selection and evaluation is increasingly seen as a strategic issue for companies. Unlike the past, an emerging trend is to select suppliers where a long-term relationship is desired and supplier involvement in product development is required and to sort suppliers into categories based on performances. This paper describes a supplier evaluation and management methodology for strategic sourcing, in which suppliers are assessed considering supplier's co-design capabilities and categorized based on overall performances, potential reasons for differences in performance of supplier groups are identified, and performances of the suppliers are improved by applying supplier development programs. A new multicriteria sorting method based on the PROMETHEE methodology is also introduced. By means of a strategic supplier selection example, we demonstrate that our methodology is a flexible and responsive decision-making tool for assessing strategic suppliers.