TH2 Presentation

Department of Design & Manufacturing Engineering

School of Mechanical & Manufacturing Engineering
(SMME)
National University of Science & Technology,
Islamabad, Pakistan

Presenter: Usama Tahir

Registration no: 276496

Supervisor: Dr Shahid Ikram Ullah Butt

Thesis Title
Sustainable &
Resilient
Supplier
Selection &
Order Allocation
Introduction/Theoretical Background
 Suppler selection (SS)
 The process through which firms identify, evaluate, and contract with
suppliers
 Order allocation (OA)
 The optimal order quantity assigning to each selected supplier
 SS and OA are complimentary activities
 SS precedes OA
 SS-OA is considered one of the most important strategic
decisions in supply chain network design and operation
 Generally, SS-OA as a research area is classified as part of
production and operations research

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Contd...

 Supplier selection is a complex and multi-criteria decision making (MCDM)

process
 It involves evaluation of multiple and sometimes conflicting criteria
 Conventional (economic) criteria considered for supplier selection are:
 Cost
 Product quality
 Defect rate
 Delivery time, etc.

 Order allocation is usually carried out through mathematical optimization in

order to determine the right quantity for each supplier

4
Contd...

 With the growing concern about environmental and social issues in

manufacturing and international trade, the purchasing practices of firms have
become more wide ranging
 While selecting, the suppliers are evaluated using relevant criteria from not only economic
but environmental and social perspectives as well, simultaneously
 This leads to a more comprehensive and sustainable supplier selection
 Inclusion of the so called triple bottom line or TBL sustainability criteria
transforms the SS-OA problem into sustainable SS-OA or SSS-OA problem

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Contd...
 Disruptions, natural or manmade, pose a serious risk to
adequate supply chain performance
 Earthquakes
 Pandemics e.g. COVID-19
 Territorial conflicts
 Security or trade sanctions
 Terrorism, etc.
 Resilience is the ability of the supply chain network to both
resist disruptions and to recover operational capability after
disruptions have occurred
 Resilience should be considered a performance evaluation criteria
alongside TBL sustainability in SS-OA problems

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Literature Review

 An analysis of recently published relevant literature was conducted in order to

explore the concurrent inclusion of TBL sustainability and resilience in SS-OA
 Summary of the literature review is included in the next slide

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8
Contd...

 Major shortcomings of published literature:

 TBL sustainability and resilience criteria have not been collectively considered for both
supplier selection and order allocation parts of the SS-OA problem
 Disruption scenarios have not been included for supply chain network performance
evaluation in any of SSS-OA models proposed so far
 Minor shortcoming of published literature:
 A lack of mathematical models that incorporate resilience sub-criteria alongside TBL
sustainability for optimal order allocation

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Objectives and Significance

 The criteria and sub-criteria for both sustainability and resilience have been
usually identified and listed in distinct categories in published literature
 In recent times, the global spread and impact of COVID-19 pandemic has
highlighted the shortcoming of this approach as it is not always the case that a
sustainable supplier will be a resilient supplier as well
 The performance of such a supplier will mostly be far from ideal under supply chain network
disruptions

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Contd…

 In this research work, this issue will be addressed and supplier selection and
order allocation problem will be modeled by taking into account both
sustainability and resilience criteria simultaneously
 In order to achieve this, a novel and comprehensive multi-phase, multi-period,
and multi-modal decision support framework has been proposed
 The decision support framework will address all major and minor shortcomings identified in
the literature review section

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Scope

● A Multi-echelon, multi-modal supply chain

network considered for the purposes of this
research work
● Sustainable and Resilient Supplier Selection
using Multi Criteria Decision Making
(MCDM) Technique
● Sustainable and Resilient Order allocation
using Mixed Integer Non-Linear
Programming (MINLP) Mathematical Model
 Methodology and Techniques

 The schematic (cross functional flowchart) of the proposed decision support

framework is presented in the following slide

13
Contd...

 The framework has been divided into five phases

 Phase-1: MCDM techniques i.e. fuzzy extended AHP (FE-AHP) and fuzzy
TOPSIS (FTOPSIS) have been used to evaluate the potential suppliers in the
context of triple bottom line sustainability and resilience criteria
 Phase-2: A multi-objective, mixed-integer nonlinear programming
(MOMINLP) model has been developed for optimal order allocation to the
selected suppliers
 The model will be solved using a suitable nonlinear solver and an exact algorithm
(Augmented ε-Constraint Method 2 or AUGMECON2) simultaneously for extracting a
candidate list of best solutions

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Contd...

 Objectives and elements of the MOMINLP model have been included as under:
 Min Total cost (TC) = Purchasing cost + Ordering cost + Inventory holding cost +
Transportation cost + Transfer cost + Custom clearance cost
 Min Total travel time (TTT) = Transportation time + Transfer time + Custom clearance time
 Min Environmental impact (EI) = Sum of all CO2 emissions during end to end transportation of
goods
 Max Total value of sustainable purchasing (TVSP) = Sum of products of sustainability criteria
weights and quantity of goods delivered by
suppliers
 Max Resilience Index (RI) = Sum of products of resilience criteria weights and quantity of goods delivered
by suppliers

15
Contd...

 Phase-3: MCDM techniques (AHP and TOPSIS) will be

again used to rank and select the best solutions
 Phase-4: The MOMINLP model will be again optimized
along with an additional objective i.e. service level while
being evaluated against multiple random or intentional
disruption scenarios
 The effect of these disruptions on the service level of the supply
chain network will be determined
 Phase-5: The disruption and pre-disruption solutions will
be compared against fixed criteria to arrive at the best
performance configuration for the supply chain network

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 Perceived Innovation/Applications

 This research work presents a novel modeling approach

for sustainable and resilient supplier selection and order
allocation under disruption scenarios
 The key novel aspects of the research work are included
as under:
 Simultaneous inclusion of sustainability and resilience criteria (in
both supplier selection and order allocation)
 Introduction of backup suppliers (to counteract the impact of
disruptions)
 Integration of service level with mathematical model (to evaluate
supply chain network performance under the effects of
disruptions)

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Perceived Innovation/Novelty

 This research work presents a novel modeling approach for sustainable

and resilient supplier selection and order allocation under disruption
scenarios

 The key novel aspects of the research work are included as under:

 Simultaneous inclusion of sustainability and resilience criteria (in both supplier

selection and order allocation)
 Integration of Resilience index with mathematical model (to evaluate supply
chain network performance under the effects of disruptions)
 Contd...
 A review of extant literature
available since 2010 on
sustainable supplier selection
and order allocation problem
has been carried out with the
objective to analyze the types of
application case studies
included in 184 relevant articles

Figure 1: Industry sector wise distribution of application

case studies.
Contd...
 The main focus of research since 2010 with regards to application case
studies:
 Automobile/automotive parts manufacturing industry (19%)
 Electrical/electronics goods manufacturing industry (16%)
 It is also noted that so far no case study has incorporated the evaluation
of the logistics performance of the supply chain network
 The proposed decision support framework takes into account the logistics
performance of the multi-echelon, multi-modal supply chain network
considered
Contd...
 For the purposes of this research work, we will implement the
decision support framework using data from:
 Air Conditioning Industry

 No TBL sustainability and resilience criteria or sub-criteria have been

identified for both above listed industries in published literature so
far
Thank You

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