Robust Supplier Selection for Changing Product Architectures


Today, a noticeable trend in the US industries is the growing reliance of companies on their supply chain to provide competitive components/sub-assemblies with the desired functionality to not only meet current needs and demands but also the anticipated ones of the future. Supplier consolidation through reduction of the total number of suppliers is being widely practiced by many companies. The increasing dependence on a few key suppliers makes supplier selection critical to a company's success. Another distinct industry trend is shortening of product and technology lifecycles along with market demands for greater product variety. The direct implication of these trends is continually changing product architectures, which the manufacturers and their suppliers have to manage effectively. Thus, manufacturers need to base their supplier selection process on the robustness of suppliers to deliver components that are compatible with changing product architectures along with the other criterion such as price, reliability, quality, delivery time, etc. Supplier robustness, in the context of this paper, is defined as supplier ability to effectively cater to varying product architectures at minimum supplier costs. The current paper proposes an Ant Colony Optimization (ACO) based methodology for robust supplier selection by extending the robust engineering techniques to the supply chain domain. Taguchi's quality loss concept is used to evaluate how well the individual components/subsystems supplied by the suppliers' cost-effectively meet the customer needs. The objective is to select suppliers capable of meeting varying product architecture needs over a given planning horizon at optimal costs. The proposed methodology is demonstrated using an example of a cell phone product family.


Engineering Management and Systems Engineering

Keywords and Phrases

Ant Colony Optimization (ACO); Taguchi Loss Function; Taguchi Methods; Cost Effective Manufacturing; Supplier Consolidation

Document Type

Article - Conference proceedings

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