Development of an Evaluation Framework for The

Vendor Performance in Footwear Industry

Applied Management Research Project

By

Shambhav Gupta

17BM60090

Under the Supervision of

Prof Kunal Kanti Ghosh

VINOD GUPTA SCHOOL OF MANAGEMENT

INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

November,2018
 CERTIFICATE

This is to certify that the report entitled ‘Development of an Evaluation Framework for The

Vendor Performance in Footwear Industry’ submitted by Shambhav Gupta to Indian Institute

of Technology Kharagpur is a record of bona-fide research work under my supervision.

__________________________
_
Prof Kunal Kanti Ghosh
Assistant Professor
Vinod Gupta School of Management
Indian Institute of Technology Kharagpur

Date: ____ / _____ / ______

2
 DECLARATION

I, Shambhav Gupta hereby certify that this report titled ‘‘Development of an Evaluation
Framework for The Vendor Performance in Footwear Industry”

a. Is an original work and has been done by me under the guidance of my supervisor;

b. I have conformed to ethical norms and guidelines while writing the project;

c. Whenever I have used materials (data, model, figures and text) from other sources, I have

given due credit to them by citing them in the text of the report, giving their details in the

references, and following ‘fair use doctrine’ policies of copy righted materials if any used in this

report.

_________________________
Shambhav Gupta
17BM60090
Dated:

3
 VIVA VOCE EXAMINATION

Date: ____ / _____ / ______

This is to certify that the report entitled ‘Development of an Evaluation Framework for the

Vendor Performance in Footwear Industry’ submitted by Shambhav Gupta to Indian

Institute of Technology Kharagpur was evaluated by us.

Panel Member Panel Member

Panel Member Panel Member

4
 ACKNOWLEDGEMENT

I wish to express my sincere thanks to Vinod Gupta School of Management, IIT Kharagpur for
offering a unique platform to utilize all my knowledge and as well as learn new things.

My heartfelt gratitude to Prof. Kunal Kanti Ghosh for her guidance and encouragement
throughout the project. His insights helped me in getting a clear direction to my work and
eliminate possibilities of error. I am thankful for the tremendous support from Pradeep Kumar,
research scholar from Vinod Gupta School of Management.

I would also like to thank Sourcing Managers who helped me in answering the questionnaire
and also my classmates here at VGSoM for their help.

Shambhav Gupta
17BM60090
MBA 2017-19
Vinod Gupta School of Management, IIT Kharagpur

5
 Table of Contents

CERTIFICATE............................................................................................................................. 2

DECLARATION........................................................................................................................... 3

VIVA VOCE EXAMINATION........................................................................................................4

ACKNOWLEDGEMENT..............................................................................................................5

EXECUTIVE SUMMARY............................................................................................................. 7

CHAPTER I: INTRODUCTION AND PROBLEM STATEMENT...................................................8

CHAPTER II: LITERATURE REVIEW.......................................................................................13

CHAPTER III: RESEARCH METHODOLOGY...........................................................................14

CHAPTER IV: ANALYSIS AND RESULTS................................................................................16

CHAPTER V: CONCLUSION....................................................................................................22

REFERENCES.......................................................................................................................... 24

6
 EXECUTIVE SUMMARY

This study on Developing an Evaluation Framework for The Vendor Performance in Footwear
Industry discusses the various factors that are considered by sourcing managers while selecting
the vendors in the organisations. This study focuses on the motivation behind what are the
factors which need to be considered while selecting Vendors specially for the Footwear
Industry. The selection of Vendors in Footwear Industry is highly different from other industries
and also what factors are highly considered and what factors are under less consideration
according to organisations while selecting Vendors.

Based on the extensive literature review, various clusters are studied and some major clusters
are chosen for current study that highly relatable. Those clusters are further constructed into
factors and global factors to fit into the model that is being applied as the research methodology.
So as to know which cluster are more important and which are least important, we need to rank
them in the order of importance. For this purpose, Multi criteria decision making tool Analytical
Hierarchy Process is used.

An excel sheet is floated to sourcing managers of different organisations and asked them to
rate the importance of the factors and sub factors. Based on the results obtained from the
questionnaire, consistency of the results is checked and further AHP calculations are done
to rank the factors in the order of importance. Further project scope and constraints of this
study are discussed in the conclusion section.

7
 CHAPTER I: INTRODUCTION AND PROBLEM STATEMENT

A Supply Chain is an arrangement of associations, individuals, activities, data, and resources

engaged with moving an item or administration from supplier to client. These activities include
the change of natural resources, crude materials, and segments into a completed item that is
conveyed to the end client. It is a procedure utilized by organizations to guarantee that their
production network is proficient and financially savvy. Basic elements of Supply Chain model
are as follows: -
1. Planning
2. Sourcing
3. Manufacturing
4. Delivering
5. Return
The complex process of Supply Chain starts from Sourcing, primary stage of this chain. It is a
component of an organization which covers the extent of exercises running from sourcing,
obtaining, arranging and acquisition. It involves building a powerful relationship with suppliers of
the raw materials required in creating the merchandise the corporate delivers. Sourcing comes
into play when the company needs to have their product from vendors. Activities involved are
researching, obtaining quotes with pricing, capabilities, turnaround times, and quality of work,
negotiating contracts, managing relationships, assigning jobs, evaluating daily performance and
ensuring payments are made. This part involves not solely distinguishing reliable suppliers
however conjointly coming up with ways for shipping, delivery, and payment. Supplier choices
are a standout amongst the most essential angles that organizations must join into their vital
procedures. With the expanding significance of the buying capacity, supplier administration,
choices have turned out to be more vital. As associations turn out to be more reliant on
suppliers, the immediate and roundabout consequences of poor decision making become
critical.
Vendor/Supplier Selection is one of the most promising dimensions of research in the Sourcing
process. It is the way toward choosing a supplier to gain the fundamental(raw) materials to help
the yields of associations. Choice of the best as well as the most appropriate suppliers depends
on evaluating supplier’s abilities. It is our motivation to give a precise way to deal with dissecting
these choices simultaneously, endeavoring to distinguish what are the critical perspectives that
organizations must center around while confronting these difficulties. The procedure of material

8
prerequisites arranging as the main component of the inventory network decides the adequacy
of assist tasks of numerous ventures. Proper raw material requirements arrangement begins in
hunting down cost reduction, change underway quality and shortening the time of the
procedures making an incentive for the customer. It is essential to choose the fitting technique
of the best supplier. For selecting suppliers some information is points are need to be
considered which are as follows: -
1. Determining the necessities coming about because of material prerequisites
(sorts of materials and administrations), their properties, the required amount,
time of conveyance and so forth.
2. The manner in which the organization needs to fulfil the current material
necessities
3. Defining potential suppliers
4. Indicating the criteria of the assessment and selection of the suppliers
After all these activities we get the list of suppliers along with the criteria through which we have
selected them. There can be a possibility we can get one or many suppliers. The agreement
needs to be signed between the parties as Purchase Order, with proper negotiations which
results in signing of a contract.
There are certain requirements which are need to be fulfilled by the Suppliers: -
1. Supplier should meet the specifications and demands provided by the client
during the start of the contract.
2. They should fulfil all the requirements of the producer during the phase
3. And they should lay emphasis on improvising their products.
For this research work we need to develop a framework for the Footwear Industry, since it is a
never dying industry, people will always wear shoes and sleepers. The value of the global
Footwear market totalled $371.8 billion by 2020, up 5.5% from a year earlier, registering a
CAGR of 2% during the forecast period 2015-2020. The year over year growth rate for 2018 is
estimated at 1.96% (Source: Technavio).

9
Market growth of the Footwear Industry worldwide from 2009 to 2018 (Source: Euromonitor 2018)

In India Footwear Industry footwear production is over 22 billion pairs annually, accounting for
approximately 9.6% of the total global footwear output per year. The footwear industry in India
employs over 1.1 million workers, making it one of the top employment sources in the country
The footwear market in India is now dominated by men’s footwear which contributes close to
58% of the total Indian footwear retail market and is expected grow at a CAGR of 10% by 2020.
The women’s footwear segment, however, is projected to grow at a much faster CAGR of 20%.

Value of the Footwear market in India (Source: Statista 2018)

10
 Source: Technopack, Make in India, Ministry of Textiles

If we look at the history of the Footwear Industry in India, it is such a diverse nation, the types
of traditional footwear found all over the country are diverse too. The history of footwear in India
reflects the country’s cultural and regional diversity. The first crafted footwear is the Sandals,
which are known to be the successors to these wrappings. In India these Sandals were called
as Padukas, which were mainly worn by the Saints. Over centuries many varieties of footwear
were made in the Himalayan region in order to protect the feet from cold weather. Footwear was
made of leather, wool or remains of the plants. Since most part of India is warm, footwear was
not a necessity and therefore Indians were barefooted for many years. Until half a century ago,
India was described as a barefoot country.
India being a country of artisans is known for its traditional craft of footwear making. Some of
the traditional footwear created by village craftsmen include leather chappals in Kohlapur'
embroidered Juttis in Jodhpur, Indo-Tibetan felt boots in Sikkim and vegetable fibre shoes in
Ladakh. The industrial policy 1967 reserved the leather industry including footwear only for
small scale sectors. It was only during the mid-1970s, 100% export-oriented footwear units in
large scale sector were promoted.
The Indian Footwear sector is a promising one with tremendous opportunity for growth both in
the international and domestic market. With low production cost, abundant supply of raw
material, evolving retail system, buying patterns and huge consumption market, this sector is
posed to grow to great heights. But this market is highly fragmented. The unorganized sector
dominates the industry posing a threat to the organised players.

11
 Supply Chain of Footwear Industry

Planning in Footwear Industry starts 9 months before when Researchers try to gather new form,
patterns or trends coming into the market. These designs are given to the Buyer to analyse the
cost of making and profit of those designs and Sourcing people are asked to Source those
designs inside that expense. After cost approval and negotiations done production takes place
and purchase orders are completed within estimated time and approved cost. Finished products
go to the Distribution Channel where Planner decides in which place which product need to go
analysing the socioeconomics of that place.
OBJECTIVE
In the quick changing style advertise, being adaptable and versatile is a key to survival.
Subsequently, supply chain technique like speedy reaction is imperative in the Footwear
industry. Determination of providers to help such methodologies is in this way a standout
amongst the most basic exercises yet isn't very much considered. Customarily, providers are
chosen typically dependent on amount necessity and cost, which are by all account not the only
vital issues in the operation of the Footwear production network these days. This study shows a
precedent on taking care of the supplier selection in the Footwear business by utilizing the
Analytic Hierarchy Process (AHP), which takes different factors (Cost, Deliver, Quality,
Flexibility, Reliability and Aesthetics) into record for supporting supply chain strategies.
ANALYTIC HIERARCHY PROCESS
Analytic Hierarchy Process initially proposed by Saaty who is a U.S. tasks examine researcher,
the essential thought of AHP is the decision problem separated into various levels as indicated
by the main objective, sub-objectives, factors, sub-property, programs, child programs and the
order of the particular measures, to build a progressive structure display, at that point utilize its
matrix to compute relative weights which the different qualities of each level in respect to the
past level property. It is a powerful and MCDM (Multiple-criterion decision making) tool capable
of handling many criterions. It would be appropriate to use this strategy as our goal is to choose
the best supplier and we have set of criteria which we have searched through primary and
secondary research and alternatives (potential suppliers). Through this approach we can

12
calculate the relative importance of each criteria and sub criteria with each other respectively
and rank them accordingly. Therefore, AHP is employed in this paper to help selection of
suppliers to support Supply Chain in the Footwear industry.

AHP MODEL

Vendor Selection

Cost Delivery Quality Flexibility Reliability HSE

Supplier’s Geographic Customer Production Trust/
Selling Location Service Pollution
Capacity Reputation
Price
Freight Information Stable Labor
Shapes
Internal Terms Sharing Workforce Condition
Cost
Trade Design and
Incentives Inventory Economic Animal
Restrictions Construction availability Condition Health

Vendor 1 Vendor 2 Vendor 3

CHAPTER II: LITERATURE REVIEW

Since the literary work identified with the Selection of Vendors in Footwear Industry are
limited, a systematic literature review has been adopted to catch an extensive variety of
factors and clusters from different and multiple industries. The search results obtained
from the extensive literature review are summarized in Table 1. In this different research
papers related to Vendor Selection have been studied and different clusters are identified
shown in Table under those factors different factors have been marked.

13
 Table 1

Cheng and Li (2002) stated that AHP has two basic applications. Firstly, it is to assign weights
to a set of pre-determined elements (e.g., criteria, factors) and then make a decision out of
several scenarios or alternatives. Secondly, it can help to prioritize (rank) elements in order to
identify the key elements.

CHAPTER III: RESEARCH METHODOLOGY

As many Footwear companies want to source their products to vendors and asking them to
deliver the products at proper time with defined cost and quality, it is important to develop the
framework for the evaluation of Vendor’s performance. In this study we are interested in
knowing the factors considered by Sourcing managers who outsource their products to vendors.
We would also be knowing the order of importance of the factors by using Multi Criteria
Decision Making (MCDM) tool and understand which factors are majorly considered and which
are the factors of least importance.
In the first step, from the research papers, the major factors are identified that are considered in

14
selecting vendors by organizations. Then, the excel sheet is floated to get the piece wise
comparisons. Since clusters and factors are huge in number so instead of preparing
Questionnaires an excel sheet is floated. Once weights are determined, AHP can be applied to
find the ranks.
Clusters considered for Vendor Selection:
Many factors are mentioned by researchers and practitioners for Vendor Selection into
organization by Sourcing Managers. The factors discussed in literature are as follows: -
1. Cost
a. Supplier’s Selling Price
b. Internal Cost
c. Incentives
d. Cost of Ordering and Invoicing
2. Delivery
a. Geographic Location
b. Freight Terms
c. Trade Restrictions
d. Packaging
e. Total Order Lead Time
f. Percentage of On-Time Deliveries
3. Quality
a. Innovation
b. Design and Construction
c. Customer Service
d. Sizes
e. Shapes
4. Flexibility
a. Production Capacity
b. Inventory Availability
c. Information Sharing
d. Product Customization
e. Negotiability
5. Reliability
a. Feelings of Trust/Reputation
b. Country’s Political Situation

15
 c. Stable Workforce
d. Economic Condition
e. Warranty
f. Size of the Organization and Financial Stability
6. HSE
a. Labor Condition
b. Pollution
c. Animal Health

These are the clusters and under those clusters factors are identified through secondary
research then model is created using AHP (Analytical Hierarchy Process). The essential method
of AHP is to deteriorate the issue into chain of importance of different levels, make combine
shrewd correlation and build up needs among the components in each level of the progressive
system, integrate the outcomes (to get the general rating of options thinking about the needs of
components in the past levels, and assess the consistency of judgments).
The scale used in the questionnaire to rate the importance of the factors is as follows:

CHAPTER IV: ANALYSIS AND RESULTS

Using the hierarchy model, questionnaire has been prepared and floated to Sourcing Managers
of different organizations for responses. Based on the responses that are received pair wise
comparison matrices have been built for Global factors and sub factors as below.

Global
Factors
Delivery Reliability Quality Cost Flexibility HSE
Delivery 1.00 4.00 0.50 2.00 3.00 5
Reliability 0.25 1.00 0.20 0.33 0.50 2
Quality 2.00 5.00 1.00 3.00 4.00 6
Cost 0.50 3.00 0.33 1.00 2.00 4

16
 Flexibility 0.33 2.00 0.25 0.50 1.00 3
HSE 0.20 0.50 0.17 0.25 0.33 1

Cost of Ordering
Supplier's Internal
Cost - Sub Factors Incentives and
Selling Price Cost
Invoicing
Supplier's Selling Price 1.00 3.00 7.00 5.00
Internal Cost 0.33 1.00 5.00 3.00
Incentives 0.14 0.20 1.00 0.33
Cost of Ordering and
0.20 0.33 3.00 1.00
Invoicing

Total
Percentage
Delivery - Sub Geographi Order Trade Freight
Packaging of On-Time
Factors c Location Lead Restrictions Terms
Deliveries
Time
Geaographic
1.00 5.00 6.00 3.00 2.00 3.00
Location
Packaging 0.20 1.00 2.00 0.50 0.17 0.25
Total Order Lead
Time
0.17 0.50 1.00 0.33 0.20 0.25
Trade Restrictions 0.33 2.00 3.00 1.00 0.25 0.33
Freight Terms 0.50 6.00 5.00 4.00 1.00 2.00
Percentage of On-
Time Deliveries
0.33 4.00 4.00 3.00 0.50 1.00

Design and Customer

Quality- Sub Factors Innovation Sizes Shapes
Construction Service
Design and Construction 1.00 5.00 4.00 3.00 2.00
Innovation 0.20 1.00 0.50 0.33 0.25
Sizes 0.25 2.00 1.00 0.50 0.33
Customer Service 0.33 3.00 2.00 1.00 0.50
Shapes 0.50 4.00 3.00 2.00 1.00

Flexibility - Sub Production Inventory Informatio Product Negotia

Factors Capacity availability n Sharing Customization bility
Production Capacity 1.00 5.00 4.00 3.00 2.00
Inventory availability 0.20 1.00 0.50 0.33 0.25
Information Sharing 0.25 2.00 1.00 0.50 0.33
Product Customization 0.33 3.00 2.00 1.00 0.50
Negotiability 0.50 4.00 3.00 2.00 1.00

Reliability - Sub Feeling Warranty Organizati Economic Stable Politic

Factors of on's size Condition Workforce al

17
 Trust/Re Situati
putation on
Feeling of
Trust/Reputation
1.00 5.00 6.00 3.00 2.00 3.00
Warranty 0.20 1.00 2.00 0.50 0.17 0.25
Organization's size 0.17 0.50 1.00 0.33 0.20 0.25
Economic Condition 0.33 2.00 3.00 1.00 0.25 0.33
Stable Workforce 0.50 6.00 5.00 4.00 1.00 2.00
Political Situation 0.33 4.00 4.00 3.00 0.50 1.00

HSE- Sub Factors Pollution Animal health Labor Condition

Pollution 1.00 2.00 0.25
Animal health 0.50 1.00 0.17 Now the
Labor Condition 4.00 6.00 1.00
consistency of the
pair wise comparison matrices is found using the AHP technique to measure degree of logical
consistency among pair-wise comparisons. Following calculations are made using the excel to
check the consistency of the pair-wise comparisons of global factors and sub factors.

Consistency Check for Sub factors of Cost Factor with Normalized Comparison Matrix:
Supplier's Cost of Ordering Weighte After Matrix
Interna Incentive
Selling and d Multiplicatio
l Cost s
Price Invoicing Average n

Supplier's Selling
Price
0.60 0.66 0.44 0.54 0.56 0.935134054

Internal Cost 0.20 0.22 0.31 0.32 0.26 1.193831169

Incentives 0.09 0.04 0.06 0.04 0.06 0.910236822
Cost of Ordering and
Invoicing
0.12 0.07 0.19 0.11 0.12 1.137477718
4.177 0.058893254
Sum CI

CI/RI 0.0654 <.1 Consistent

Consistency Check for Sub Factors of Delivery Factor with Normalized Comparison Matrix:
Percentag
Trade Freigh
Geographi Packagin Total Order e of On- Weighted After Matrix
Restriction t
c Location g Lead Time Time Average Multiplication
s Terms
Deliveries
Geaographi
c Location
0.39 0.27 0.29 0.25 0.49 0.44 0.35 0.898952014
Packaging 0.08 0.05 0.10 0.04 0.04 0.04 0.06 1.07165639
Total Order
Lead Time
0.07 0.03 0.05 0.03 0.05 0.04 0.04 0.888205235
Trade 0.13 0.11 0.14 0.08 0.06 0.05 0.10 1.137105378

18
 Restrictions
Freight
Terms
0.20 0.32 0.24 0.34 0.24 0.29 0.27 1.120703535
Percentage
of On-Time 0.13 0.22 0.19 0.25 0.12 0.15 0.18 1.206756911
Deliveries
6.323 0.065
Sum CI

0.052
CI/RI <1 Consistent

Consistency Check for Sub Factors of Quality Factor Normalized Comparison Matrix:
Design and Customer Weighted After Matrix
Innovation Sizes Shapes
Construction Service Average Multiplication
Design and
Construction
0.44 0.33 0.38 0.44 0.49 0.42 0.95

Innovation 0.09 0.07 0.05 0.05 0.06 0.06 0.936

Sizes 0.11 0.13 0.10 0.07 0.08 0.10 1.035
Customer
Service
0.15 0.20 0.19 0.15 0.12 0.16 1.101
Shapes 0.22 0.27 0.29 0.29 0.24 0.26 1.069
Sum 5.090 CI 0.0226
CI/RI 0.02019 <.1 Consistent

Consistency Check for Sub Factors of Flexibility Factor Normalized Comparison Matrix:

Product
Production Information Inventory Weighted After Matrix
Negotiability Customizatio
Capacity Sharing Availability Average Multiplication
n

Production
Capacity
0.44 0.33 0.38 0.44 0.49 0.42 0.95
Information
Sharing
0.09 0.07 0.05 0.05 0.06 0.06 0.936
Negotiability 0.11 0.13 0.10 0.07 0.08 0.10 1.035
Product
Customization
0.15 0.20 0.19 0.15 0.12 0.16 1.101
Inventory
Availability
0.22 0.27 0.29 0.29 0.24 0.26 1.069
Sum 5.090 CI 0.0226
CI/RI 0.0201 <.1 Consistent

Consistency Check for Sub Factors of Reliability Factor Normalized Comparison Matrix:
Size of Econom
Feeling of Stable Country's
the ic Weighted After Matrix
Trust/Reput Warranty Workf Political
Organizat Conditi Average Multiplication
ation orce Situation
ion on
Feeling of
Trust/Reputation
0.39 0.27 0.29 0.25 0.49 0.44 0.35 0.898952014
Warranty 0.08 0.05 0.10 0.04 0.04 0.04 0.06 1.07165639
Size of the
Organization
0.07 0.03 0.05 0.03 0.05 0.04 0.04 0.888205235

19
 Economic
Condition
0.13 0.11 0.14 0.08 0.06 0.05 0.10 1.137105378
Stable Workforce 0.20 0.32 0.24 0.34 0.24 0.29 0.27 1.120703535
Country's
Political Situation
0.13 0.22 0.19 0.25 0.12 0.15 0.18 1.206756911
Sum 6.323 CI 0.065
CI/RI 0.052 <.1 Consistent

Consistency Check for Sub Factors of Health, Safety and Environment (HSE) Factor
Normalized Comparison Matrix:
Pollutio Animal Labor Weighted After Matrix
n health Condition Average Multiplication

Pollution 0.18 0.22 0.18 0.19 1.064270153

Animal health 0.09 0.11 0.12 0.11 0.959001783
Labor Condition 0.73 0.67 0.71 0.70 0.991582492
Sum 3.105 CI 0.01
CI/RI 0.01 <.1 Consistent

Consistency Check for Global factors Normalized Comparison Matrix:

Weighte After Matrix

Deliver Reliabili Flexibi
Quality Cost HSE d Multiplicati
y ty lity
Average on

Delivery 0.23 0.26 0.20 0.28 0.28 0.2380 0.25 1.0658221

Reliability 0.06 0.06 0.08 0.05 0.05 0.0952 0.07 1.0151603
Quality 0.47 0.32 0.41 0.42 0.37 0.2857 0.38 0.9294256
Cost 0.12 0.19 0.14 0.14 0.18 0.1904 0.16 1.1364055
Flexibility 0.08 0.13 0.10 0.07 0.09 0.1428 0.10 1.1097795
HSE 0.05 0.03 0.07 0.04 0.03 0.0476 0.04 0.9123109
Sum 6.169 CI 0.0337
CI/RI 0.0272 <.1 Consistent

20
 Inventory Availability
Product Customization
Negotiability
Information Sharing
Production Capacity
Shapes
Customer Service
Sizes
Innovation
Design and Construction
Country's Political Situation
Stable Workforce
Economic Condition
Size of the Organization
Warranty
Feeling of Trust/Reputation
Percentage of On-Time Deliveries
Freight Terms
Trade Restrictions
Total Order Lead Time
Packaging
Geaographic Location
Labor Condition
Animal health
Pollution
Cost of Ordering and Invoicing
Incentives
Internal Cost
Supplier's Selling Price

Prioritizing/Ranking the Global Factors and Local factors:

Using the weighted averages which is also called priority vector we rank the sub factors in the
normal comparison matrices as follows.

Sub-Criteria weight
Loca
Main Criteria Globa Global
Sub-Critera Local weight l
Criteria Weight l Rank weight
Rank
Supplier's Selling Price 0.557892475 0.08950477 3
Internal Cost 0.263345111 0.042249438 9
Cost 0.16 3
Incentives 0.056889801 0.009127043 23
Cost of Ordering and
Invoicing 0.121872613 0.019552478 16

21
 Geographic Location 0.354849479 0.088297222 4
Packaging 0.057927372 0.014414072 19
Total Order Lead Time 0.042295487 0.010524389 21
Delivery 0.25 2
Trade Restrictions 0.096093412 0.023910931 13
Freight Terms 0.272235677 0.067740423 5
Percentage of On-Time
Deliveries 0.176598572 0.043943036 7
Design and Construction 0.416212445 0.157893274 1
Innovation 0.062376387 0.023662944 14
Quality 0.38 1 Sizes 0.098572773 0.037394312 10
Customer Service 0.161050407 0.061095665 6
Shapes 0.261787988 0.099311213 2
Production Capacity 0.416212445 0.042637299 8
Information Sharing 0.062376387 0.006389911 25
Flexibility 0.10 4 Negotiability 0.098572773 0.010097912 22
Product Customization 0.161050407 0.016498196 18
Inventory Availability 0.261787988 0.026817874 12
Feeling of Trust/Reputation 0.354849479 0.023240589 15
Warranty 0.057927372 0.003793908 28
Reliability 0.07 5 Size of the Organization 0.042295487 0.00277011 29
Economic Condition 0.096093412 0.006293563 26
Stable Workforce 0.272235677 0.017829863 17
Country's Political Situation 0.176598572 0.011566185 20
Pollution 0.193503664 0.008406453 24
HSE 0.04 6 Animal health 0.106555754 0.004629142 27
Labour Condition 0.699940582 0.030407785 11
Table showing the ranks of global and local factors

The order of all global factors and local factors are identified using the weighted average and to
make them in order we have ranked them.

CHAPTER V: CONCLUSION

Here the important factors for development of model for the evaluation of vendor’s performance
are discussed and they are ranked in the order of importance. Sourcing managers select
vendors in the Footwear industry considering the factors as mentioned. There is one another
factor included which is Health Safety and Environment (HSE) and plays a vital role in Vendor
Selection specially in Footwear Industry not in any other industry.
Though many factors have been considered, sourcing managers majorly select vendors to fulfil
their Purchase Order within given timeline and specifications. Quality plays a very important role

22
in selecting the Vendors. If Quality of the product is not met by the vendor according to the
merchandiser or buyer then that Vendor is not even considered. So, vendors have come to the
defined Design and specifications and make the sample or fit within the defined shapes and
sizes given by the Merchandiser.
Delivery is another important factor because the basic target of the Vendor is to complete the
Purchase Order within the given timeline because if it is delayed from Vendor’s side then that
product will reach late to the Warehouse and ultimately it will take time to reach to the store. It is
highly influential in Footwear Industry as the volatility in this industry is huge as the market trend
changes frequently. There are certain clauses regarding the delivery of the consignment or the
completion of Purchase Order as known as Late Delivery (LD) charges which Vendor needs to
incur. Flexibility and Reliability are down the line below the delivery in the scale of importance.
Flexibility only shows how vendor can change according to the company’s requirements
because in Footwear Industry you never know which product or which material public like so the
company will give the order to produce that particular product only and HSE is the new factor in
Footwear Industry as it shows the condition of labor working and how vendor is taking care of
environment through production, as sourcing manager do consider this how vendors are taking
care of these factors.
Since organisations these days not only outsource or select vendors from the same country.
These days in this global market organisations wants to outsource their material or finished
product from every corner of the world it’s all about the cost and reliability of that Vendor. So,
Reliability plays an important role but it is not that much important.
Footwear organizations are confronting steep rivalry in the worldwide market. They need to
settle on right choices at various phases of supply chain activities and experience issues at the
key level, the strategic level and the operational level of basic leadership forms. Supplier
evaluation is never again simply the issue of getting low item costs. It manages the expenses in
all the related supply chain exercises. A simple to utilize supplier’s performance evaluation
model that covers all supply chain issues can offer buyers incredible benefits in hunting down
new suppliers and assessing current accessible suppliers. This exploration gave a model that is
thorough and sufficiently flexible to determine one of the major vital choice issues, to have a
successful sourcing activity.

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 Weights
HSE
4%
Flexibility
10% Delivery
25%

Cost
16%

Reliability
7%

Quality
38%

Future Scope:
Different MCDM techniques can be compared to see if the outcomes vary. Also, the effect of
introducing fuzziness can also be studied by comparing models with and without fuzziness.
Also, we need to observe the other side of the coin that is from the vendor side that what
problems they face while fulfilling all the conditions and requirements imposed by the buyers
and understand opposite phenomenon.

Project Limitations:
For assigning the weights, only 3 sourcing professionals could be obtained from different
organizations due to time and physical constraints. More experts would have helped made the
weights more objective. Also, from the literature survey, we have identified only 6 major factors
and under them various sub factors. There may be criteria that can have more preference
among some professionals than others. This is also a constraint. It can be also that the
importance of the factors differs from one organization to other and one type of industry to other.
That is also a constraint.

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