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Evaluating the critical success factors of supplier development: a case study


Srikanta Routroy and Sudeep Kumar Pradhan
Department of Mechanical Engineering, Birla Institute of Technology & Science, Pilani, India
Abstract
Purpose The purpose of this paper is to identify and evaluate the critical success factors (CSFs) responsible for supplier development (SD) in a manufacturing supply chain environment. Design/methodology/approach In total, 13 CSFs for SD are identied (i.e. long-term strategic goal; top management commitment; incentives; suppliers supplier condition; proximity to manufacturing base; supplier certication; innovation capability; information sharing; environmental readiness; external environment; project completion experience; supplier status and direct involvement) through extensive literature review and discussion held with managers/engineers in different Indian manufacturing companies. A fuzzy analytic hierarchy process (FAHP) is proposed and developed to evaluate the degree of impact of each CSF on SD. Findings The degree of impact for each CSF on SD is established for an Indian company. The results are discussed in detail with managerial implications. The long-term strategic goal is found to be the most signicant CSF for successful SD implementation. Research limitations/implications This study has not been statistically validated in a manufacturing supply chain environment for complete acceptability. Practical implications The simplicity and clarity of the proposed approach enhances its acceptability for evaluating CSFs in manufacturing supply chain environment. It also provides the direction for optimally allocating the efforts and resources for successful implementation of SD in short duration. Originality/value Although both CSFs and SD have been widely researched, but no study has been reported in the literature to prioritize and rank the CSFs of SD in an Indian manufacturing environment. The paper contributes to research in the supply chain management area in general and SD in particular for manufacturing environment. The proposed approach has the ability to capture the judgment of multiple experts to prioritize and rank CSFs for SD. Keywords Critical success factors, Supplier development, Supply chain management, Fuzzy analytic hierarchy process, India, Manufacturing industries Paper type Research paper

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Received 19 August 2011 Revised 18 October 2011 Accepted 18 October 2011

Benchmarking: An International Journal Vol. 20 No. 3, 2013 pp. 322-341 q Emerald Group Publishing Limited 1463-5771 DOI 10.1108/14635771311318117

1. Introduction Todays manufacturing business environment is less vertically integrated due to dynamic market place, high degree of technological changes, increased number of competitors, more demanding customers and shrinking product life cycles. The manufacturing companies move towards downsizing and outsourcing. They have to depend more on the suppliers so that quality product/service can be delivered in a timely and cost effective manner. They are also expecting enhanced performance from their suppliers in multi-dimensions like quality, reliability, exibility, innovation, green capability and, etc. in order to achieve competitive advantage. It is observed that manufacturing companies are putting resources and efforts to improve the supplier capability if it is not up to the expectations.

This is termed as supplier development (SD). SD may be a short term effort or long term effort undertaken jointly by both the supplier and manufacturer. Many manufacturing companies world-wide such as Sony, Honda, Chrysler, Ford, General Motors, General Electric, Nissan, Toyota, IBM, Motorola, Visteon Corporation, John Deere, HP, Wal-Mart, National Grid Company (UK), Dell, Whirlpool, and Pontiac (Hartley and Jones, 1997; Dunn and Young, 2004; Sako, 2004; Hahn, 2005; McGovern and Hicks, 2006; Sharma, 2010; Aggrawal, 2010; Chandrasekaran, 2010; Talluri et al., 2010; Wagner, 2010) have implemented the SD to enhance the capability of the supplier and to create a win-win environment. It is also reported that the supplier performance is enhanced due to SD (Watts and Hahn, 1993; Krause et al., 2000; Lee et al., 2000; Humphreys et al., 2004; Batson, 2008; Park et al., 2010; Talluri et al., 2010). The supply chain manger should identify and understand the details of the critical success factors (CSFs) for SD as they play signicant role for effective and efcient implementation of SD in short duration. The degree of impact level of each CSF on SD is different in manufacturing environment. Therefore, it should be evaluated correctly through judgment of multiple experts. To address this issue, a fuzzy analytic hierarchy process (FAHP) is proposed which has the ability to capture the judgment of multiple experts to prioritize and evaluate CSFs for SD. The simplicity and clarity of proposed approach enhances its acceptability for implementation. In order to explain the salient features of the concept, the proposed approach is applied to an Indian manufacturing company. 2. Literature review Leenders (1966) was rst to mention the term SD. The manufacturing companies may achieve competitive advantage from strategic procurement initiatives such as SD because of shortened product life cycles, fast-changing technologies, ever increasing quality levels and cost-cutting by competitors (Hahn et al., 1990). When supplier shows his inability to satisfy the expectation of the manufacturer, then manufacturer has four possible alternatives (i.e. invest time and resources to increase the performance and/or capabilities of their present suppliers; manufacture the purchased item in-house; search for an alternative supplier; and choose some combinations of the previous three) (Krause et al., 1998). The rst alternative is SD. SD is dened in various ways by managers, researchers and academicians. Some of the denitions of SD are mentioned in Table I. The antecedents of SD are buying rms top management support, importance of purchased inputs to the buying rm, inter-rm communication, buying rms perspective towards suppliers, supplier commitment, buying rms expectation of relationship continuity, transaction-specic SD activities, buying rm market competition and rate of technological change in buying rms industry (Krause, 1999). SD practices can be classied into four major categories as knowledge transfer, investment and resource transfer, feedback and communication, and management and organizational practices (Bai and Sarkis, 2011). SD can also be classied as direct SD (DSD) and indirect SD (ISD). DSD aimed at long-term relationship. The activities such as on-site consultation, education and training programs, temporary personnel transfer, inviting the suppliers personnel, the provision of equipment or capital/investment in supplier operation and, etc. are included in DSD (Krause, 1997; Krause and Ellram, 1997; Krause et al., 2000; Monczka et al., 1993; Sachin and Vincent, 2007; Krause et al., 2007). ISD is aimed at enhancing supplier performance with limited resource support by incentives, future business assurance and, etc. The ISD improves suppliers product and

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Authors Leenders (1966) Hahn et al. (1990)

SD denition SD dened as manufacturers efforts towards increasing a number of relevant suppliers and their performance improvement SD dened as any systematic organizational effort to create and maintain a network of competent suppliers SD dened as a long-term cooperative effort between a buying rm and its suppliers to upgrade the suppliers technical, quality, delivery, and cost capabilities and to foster ongoing improvements SD dened as any set of activities undertaken by a buying rm to identify, measure and improve supplier performance and facilitate the continuous improvement of the overall value of goods and services supplied to the buying companys business unit SD dened as any effort by a buying rm with a supplier to improve the suppliers performance and/or capabilities and to meet the buying rms shortand/or long-term supply needs SD dened as long-term business strategy that is the basis for an integrated supply chain SD dened as any effort of a buying rm with regard to its supplier to increase the performance and/or capabilities of the supplier to meet the buying rms supply needs

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Watts and Hahn (1993) Krause et al. (1998)

Krause (1999) Handeld et al. (2000) Abdullah and Maharjan (2003)

Table I. Denitions of supplier development

delivery performance and supplier capabilities whereas DSD strongly improves supplier capabilities (Wagner, 2010). However, SD efforts are less effective if indirect and DSDs are applied simultaneously. Therefore, at any given time, rms should engage in either ISD or DSD, not in both (Wagner, 2010). The appropriate SD activities are powerful to substantially back up the customer rms differentiation as well as cost leadership strategy (Wagner, 2006a). Park et al. (2010) categorized suppliers for SD programs into four group, i.e. the prime group that prefers providing strong incentives and constructing long-term trust relationships; the collaboration group that reinforces and improves cooperation to increase mutual benets; the maintenance group that maintains the status quo and pursues a mutual benet; and the improvement group that focuses on the supplier via inspections and improvement activities. SD is more effective in mature as opposed to initial and declining life-cycles phases (Wagner, 2011). It is also obvious that returns on SD investment will be enhanced for the manufacturer with positive long-term relationship with supplier. SD investments should be made based on the potential for competitive advantage (Krause et al., 2000). Talluri et al. (2010) presented a set of optimization models for optimally allocating investment dollars among multiple suppliers to minimize risk while maintaining an acceptable level of return. Based on empirical survey-data from organizations in Denmark and the USA, Narasimhan et al. (2008) concluded that rms must emphasize relation and trust building activities before investing in SD initiative. The literatures are also available on SD discussing and analyzing various aspects of SD in the manufacturing environment. Hartley and Jones (1997) designed four steps (i.e. assess the suppliers readiness for change, build commitment through collaboration, implement system-wide changes and transition out of the suppliers organization) process oriented SD to effectively improve the capability of the supplier. Quayle (2000) discussed the overview of SD and suggested the rationale and rewards of SD for small rms. Reed and Walsh (2002) found SD to be effective in strengthening

relationships between customers and suppliers and building mutual trust through case studies of SD in the UK aerospace and defense sectors. Wang et al. (2004) indicated that a lot of issues are involved to implement SCM successfully and one of the major issues is SD. They also applied Six-Sigma approach for SD in order to enhance supplier performance. Wouters et al. (2007) mentioned that cost management is a dominant motive for taking local SD initiatives on basis of results of a eld study of supply chain experiences of international companies in Thailand and Vietnam. Li et al. (2007) conducted a survey of 142 electronics manufacturing companies in Hong Kong to study the impacts of SD efforts on buyer competitive advantage. They concluded that joint actions and trust are the two most critical elements to enhance the operational effectiveness of a buyer, while asset specicity improves the market responsiveness of a buyer slightly. Shokri et al. (2010) found that SD practices in a food supply chain have dramatic impact on the suppliers performance in providing better service and product quality for the end consumer. Bai and Sarkis (2011) introduced a methodological approach for evaluating SD programs using grey systems and rough set theories. Humphreys et al. (2011) conducted a survey of companies in the Hong Kong electronics industry examining the role of SD activities in the context of buyer-supplier performance (BSP). They concluded that effective communication, supplier evaluation, suppliers strategic objectives, trust and DSD are signicant predictors of BSP. It is not always encouraging for the manufacturing rm for adoption SD as it needs investment and there is risk involved for returns on its investment. Therefore, proper selection of supplier for SD is prerequisite in most of the manufacturing environment in order to survive and sustain in the todays market place. It requires appropriate identication and prioritization of CSFs for adoption of SD. The prioritization of CSFs also shows the direction to the manufacturer for optimum allocation of resources in order to achieve maximum return from SD adoption. From the literature review, it is clear that researchers have largely overlooked the identication and prioritization of CSF for adoption of SD which is important issue in manufacturing environment. No literatures are also found to prioritize the CSF of SD using judgment of multiple experts. Therefore, a systematic approach using FAHP for prioritizing CSFs of SD in manufacturing environment is proposed. 3. Development of FAHP for evaluating the CSFs of SD The evaluation and prioritization of CSFs in manufacturing environment should be carried out considering the judgment of multiple experts. And also the fuzziness of experts judgment cannot be ignored. Although the Analytic Hierarchy Process is widely used for tackling multi-criteria decision making problem, but it has not the ability to capture the inherent uncertainty and imprecision associated with the mapping of the decision makers perception to crisp values. Therefore, the FAHP is proposed and developed for evaluating and prioritizing CSFs of SD as it is a qualitative, imprecise, complex and unstructured multiple criteria decision problem. The FAHP is applied in many areas by managers, researchers and academicians to solve real life issues in systematic way but not limited to supplier selection (Kahraman et al., 2003; Chan et al., 2008; Lee et al., 2009a; Kuo et al., 2010 and Kilincci and Onal, 2011), customer requirements (Kwong and Bai, 2003; Kahraman et al., 2004; Nepal et al., 2010), selection of third-party reverse logistics provider (Kannan and Murugesan, 2011), evaluation of the benets of information-sharing decision problems (Perc in, 2008), selection

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of a suitable ERP system for textile industry (Cebeci, 2009), evaluation the forms of buyer-supplier relationship (Lee, 2009) and evaluation of alternative manufacturing systems (Singh et al., 2007). The step by step FAHP algorithm used in this paper is mentioned below. Step 1. Identify and nalize the list of CSFs for a manufacturing environment considering supply chain strategy, degree of competition, availability of suppliers for development, internal constraints, internal manufacturing environment and, etc. Step 2. The pair-wise comparisons among the CSFs are developed on the basis of judgment of experts. A scale of 1 to 9 as shown in Table II is used for pair-wise comparisons. The pair-wise comparisons are done considering how much one CSF dominates another CSF. These are found on the basis of experts judgment and are expressed as integers. If CSF X dominates over CSF Y, then the whole number integer is entered in row X and column Y. Also the reciprocal is entered in row Y and column X. If the CSFs being compared are equal, one is assigned to both positions. Step 3. Construct a set of pair-wise comparison matrices for CSFs on the basis of the judgments of all pre-decided number of experts. Step 4. Check consistency of all pair-wise comparison matrices using the eigen value. To do so, normalize the column of numbers by dividing each entry by the sum of all entries. Then sum each row of the normalized values and take the average. This provides principal vector (PV). The check of the consistency of judgments is as follows: Let the pair-wise comparison matrix be denoted M1 and PV be denoted M2. Then dene M3 M1*M2 and M4 M3/M2. lmax average of the CSFs of M4 and Consistency Index (CI) (lmax 2 N)/(N 2 1). Consistency Ratio (CR) CI/RI corresponding to N where RI: Random Consistency Index (Table III) and N: Number of CSFs. If CR is less than 10 percent, judgments are considered consistent. And if CR is greater than 10 percent, the quality of judgments should be improved to have CR less than or equal to 10 percent.

Intensity of importance 1 2 3 4 5 6 7 8 9 Source: Satty (1980)

Denition and explanation Equally important Equally to moderate more important Moderately more important Moderate to strong more important Strongly more important Strong to very strong more important Very strongly more important Very to extremely strongly more important Extremely more important

Table II. Scale for pair-wise comparisons

Table III. Random index table

N RI

1 0

2 0

3 0.58

4 0.9

5 1.12

6 1.24

7 1.32

8 1.41

9 1.45

10 1.49

11 1.51

12 1.48

13 1.56

14 1.57

15 1.59

Source: Saaty (2000)

Step 5. After consistency test is passed, matrix of each expert is fuzzied (Lee, 2009) as mentioned Table IV. For expert t, the fuzzy pair-wise comparison of CSF i and j is denoted by (Pijt, Qijt, Rijt). The fuzzy pair-wise comparison matrixes are formed for all the experts. Step 6. A triangular fuzzy number (Dij) is obtained for CSF i and j by combining all the judgment of experts. The geometric mean method is used to form single integrated fuzzy pair-wise comparison matrix. The triangular fuzzy number is denoted by   2 bij ; bij ; bij and it is calculated as given below (Lee et al., 2009b): " b2 ij " bij
s Y t 1 s Y t 1

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#1=t P ijt #1=t Qijt #1=t Rijt where t 1; 2; . . . ; s where t 1; 2; . . . ; s where t 1; 2; . . . ; s

" b ij

s Y t 1

Step 7. The integrated fuzzy pair-wise comparison matrix of CSF is defuzzied (Kwong and Bai, 2003) as mentioned below in order to check the consistency (as discussed in step 5). If it is inconsistent then go to step 3 otherwise go to step 8:   bij b2 ij 4bij bij =6 Step 8. The fuzzy synthetic extent (FSE) (Fi) (Chang, 1996; Lee, 2009; Lee et al., 2009a, b) is calculated for each CSF as mentioned below: ( Pn 2 Pn Pn ) 2 b b ij ij j 1 j 1 j1 bij Pn Pn ; Pn Pn ; Pn Pn 2 F i mi ; mi ; m i b b i1 j1 bij i1 j1 ij i1 j1 ij Step 9. FSE of each CSF is compared to FSE values of the rest of CSF and a value called Degree of Possibilities m(Fi) (Chang, 1996; Zhu et al., 1999) is calculated as mentioned below:
Fuzzy number 1 2 9 1/1 1/x 1/9 Source: Lee (2009) Characteristic (membership) function (1, 1, 2) (x 2 1, x, x 1) for x 2, 3, . . . , 8 (8, 9, 9) (22 1, 12 1, 12 1) ((x 1)2 1, x2 1, (x 2 1)2 1) for x 2, 3, . . . , 8 (92 1, 92 1, 82 1)

Table IV. Characteristic function of the fuzzy numbers

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mF 2 $ F 1

8 1; > > > > > < 0;

m 2 $ m1
m2 1 $ m2

> m2 2m > 1 2 > > > 2 m1 2m2 : m2 2m 2 1

otherwise

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Step 10. The minimum value among the Degree of Possibilities m(Fi) for the CSF i is the weight obtained for the respective CSF. These weights are normalized to determine the priority of each CSF. The CSFs are ranked on the basis of normalized weights. 4. CSFs for supplier development A thorough analysis of the problem is required along with the identication of the CSFs involved for SD. The nal list of CSFs has been arrived from three sources (i.e. literature survey related to SD; discussions held with experts during industrial visits in India and results obtained from 20 engineers/senior engineers/managers of different Indian manufacturing industries through formal questionnaires). 13 CSFs are identied for SD and it is mentioned in Table V. The identied CSFs are discussed below. Long term strategic goals (LTG). It indicates the reciprocal mutual recognition of each ones effort for enhancing supplier capability in strategic perspectives. It also ensures a win-win environment between manufacturer and supplier. There should not be any ambiguity regarding long term strategic goals between manufacturer and supplier for effective implementation SD.
Critical success factors Long term strategic goal Top management commitment Incentives Suppliers supplier condition Proximity to manufacturing base Supplier certication Innovation capability Information sharing External environment Environmental readiness Project completion experience Supplier status Direct involvement Sources Watts and Hahn (1993), Li et al. (2003), Humphreys et al. (2004), Kannan et al. (2010) Handeld et al. (2000), Li et al. (2003), Humphreys et al. (2004), Kannan et al. (2010) Giunipero (1990), Krause (1997), Krause et al. (1998), Krause (1999), Dyer and Nobeoka (2000), Krause et al. (2000), Kannan et al. (2010) Concluded from the discussion with experts Concluded from the discussion with experts Carr and Pearson (1999), Krause et al. (2000), Modi and Marbet (2007) Carson et al. (1995), Petroni and Panciroli (2002), Verhees and Meulenberg (2004), Wang and Ahmed (2004), Hult et al. (2004), Mao (2007) Leek et al. (2003), Humphreys et al. (2004), Carr and Kaynak (2007), Liao et al. (2011) Dyer and Ouchi (1993), Oh and Rhee (2008) Humphreys et al. (2003), Routroy (2008) Concluded from the discussion with experts Concluded from the discussion with experts Krause (1997), Krause and Scannell (2002), Wagner (2006b), Krause et al. (2007), Modi and Marbet (2007), Chidambaranathan et al. (2009), Wagner (2010), Wu et al. (2011)

Table V. Critical success factors of supplier development

Top management commitment (TMC). Top management commitment is pre-requisite for developing SD as SD is mostly long-term relationship between supplier and manufacturer. It requires investment which may be in terms of infrastructure, research and development, training and, etc. and it cannot be reversed in short notice. The long-term relationship requires commitment from both manufacturer and supplier involved and is a key enabler in initiating a SD program based on the rms competitive strategy. Incentives (INC). The incentive is an approach to encourage and recognize the suppliers different efforts in a systematic manner to enhance the supplier performance. It is based on mutual agreement of both manufacturer and supplier. The manufacturer should develop appropriate incentive strategy for implementing and encouraging SD programs successfully. These incentives may be in the form of sharing of achieved cost saving, increased volume of business and assurance of future business but not limited to. Suppliers supplier condition (SSC ). The supplier shifts many of his work to its supplier in manufacturing environment and it is carried out suppliers supplier end. The suppliers supplier condition in terms of technical capability, nancial stability, reputation, delivery time performance, quality performance, exibility performance and, etc. plays a signicant role on suppliers ability/capability. The better capability of suppliers supplier condition attracts the manufacturer for SD program with supplier. Proximity to manufacturing base (PMB). The proximity of the supplier to manufacturing base leads to reduction in procurement lead time and enhancement of its reliability. The suppliers proximity helps in physically accessing its activities and actions by manufacturer with ease. It also creates a psychological pressure on supplier for maintaining the quality standards of the components/parts/services. Supplier certication (SUC). The supplier certication whether by manufacturer or external source always gives more condence for manufacturer to continue business with supplier. It is also a platform for the manufacturer to express his expectation to the supplier. The certication efforts is one of the most important SD prerequisites before undertaking operational knowledge transfer activities such as site visits and supplier training (Modi and Marbet, 2007). The positive attitude of supplier for certication is always appreciated and encouraged by the manufacturer. Innovation capability (INN ). The innovative capabilities of supplier not only include traditional competencies in R&D and product/process but also innovation supportive capabilities and managerial practices. The supplier innovativeness has always positive impacts on manufacturer performance across multiple dimensions and is always appreciated by manufacturer. Therefore, the suppliers should have good innovative attitude and capabilities in order to compete successfully in the marketplace to attract the manufacturer for SD program. Information sharing (INS). Manufacturer and supplier should effectively communicate each other through relevant and detailed information sharing on real time basis to avoid the information distortion and enhance supply chain coordination. The information sharing capability requires proper hardware and software platform at both the ends. It also needs high mutual trust between manufacturer and supplier. Environmental Readiness (ENR). The environmental readiness indicates the present green capability; level of eagerness towards enhancing the green ability in different directions in future and the performance measurement system for monitoring the green performance. The importance of environmental capability of the supplier is discussed by many researchers.

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External environment (EEN). It represents the technological and competitive business environment. The business environment and its uncertainty behavior play a signicant role in SD. Manufacturer always wants to have supplier which has the attitude to tackle these issues effectively and efciently so that competitive advantage can be maintained. Project completion experience (PEC). It indicates the past performance of the supplier in terms of reliability in completing the projects with the manufacturer and its different clients. Manufactures condence level will be improved if supplier has good report on project completion experience. Supplier status (SST). It indicates the nancial position, openness, competence and, etc. of the supplier. One can nd much literature regarding supplier status in different forms mentioned by the researchers, supply chain managers and academician in different manufacturing and service environment mentioning its importance and inclusion in supplier selection. A better supplier status always attracts a manufacturer for making alliance for SD. Direct involvement (DIN). It indicates the level of involvement/investment of manufacturer on suppliers workforce and/or research development and/or capital resources in order to enhance the supplier performance and create a win-win environment in long run. The dependence level of supplier on manufacturer is enhanced due to direct involvement of manufacturer and hence improves performance of SD program. 5. Evaluating the CSFs of SD: a case study In the case study, the proposed approach is applied to an Indian company I (the name I is used for condentiality purposes). The company I provides wide range of solutions to energy and environment sectors with manufacturing facilities placed in Asian countries. The companys market lies in different parts of the world. It has adopted environment friendly practices to protect environment. It also continuously reviews and improves products and processes throughout the supply chain. In order to nd the relevant CSFs for SD in the company I, a detail discussion was carried out with mangers, senior engineers and engineers. It is concluded that the 13 CSFs shown in Table V are relevant to the company I for implementation of SD. It is decided to take judgment of seven experts of the company I to evaluate CSFs. A scale of 1 to 9 as shown in Table II is adopted for pair-wise comparison of CSFs. Highly user-friendly software (i.e. FAHP) on the basis of algorithm mentioned in previous section (i.e. Section 3) has been developed in C# language with the help of Microsoft Visual Studio Integrated Development Environment. The indigenously developed software is capable of analyzing three stage (i.e. sub-criteria, criteria and alternatives) multi-criteria decision problems. The created desktop windows aid the user for comparison of the CSFs and to perform the analysis utilizing the judgment of experts. 5.1 Results and discussions The proposed approach for evaluating the degree of impact of CSFs for adoption of SD is applied to the Indian company I. The process of the proposed approach begins with selection of experts for the development CSF pair-wise comparison matrix. Seven experts are selected from Indian company I. The seven experts are denoted as expert A, expert B, expert C, expert D, expert E, expert F and expert G for condentiality purposes. Each expert develops his CSF pair-wise comparison matrix. Seven CSF pair-wise comparison

matrixes are developed independently by seven experts. The CSF pair-wise comparison matrix for expert A is shown in Table VI and the matrix has consistency ratio (CR) of 0.00302. This indicates that judgments given by the expert A are consistent as CR is less than 0.1. Similarly other experts CSF pair-wise comparison matrixes are developed on basis of their judgment. The consistency of their judgment is also checked. If any expert judgment is found to be inconsistent, then he/she has to rework on his/her judgment to make it consistent. The fuzzied comparison pair-wise matrix of each expert is developed from its pair-wise comparison matrix. For expert A, the fuzzied comparison pair-wise matrix is determined from Table VI and is shown in Table VII. Similarly, fuzzied comparison pair-wise matrixes for other six experts are developed from their respective pair-wise comparison matrix. The fuzzied comparison pair-wise matrixes of seven experts are merged to develop integrated fuzzied pair-wise matrix (Table VIII). Then it is de-fuzzied to develop de-fuzzied pair-wise matrixes of CSFs and is shown in Table IX. The de-fuzzied pair-wise matrix of CSFs is found to be consistent as CR value is 0.005 as it is less than 0.1. This indicates that combined judgments of all seven experts are consistent and appropriate. Therefore, the integrated experts judgment on the CSFs is evaluated from Table IX and is shown in Table X. The FSE for all CSFs is calculated from the information mentioned in Table X and is tabulated in Table XI. The degree of possibilities for all the CSF are evaluated and is mentioned in Table XII. Finally, the normalized weight and ranking of each CSF are calculated from Table XII and the results are tabulated in Table XIII. The following ndings are obtained from the case company I. The results show that each CSF has relatively healthy weightage. This concludes that all the CSF considered have the inuence on SD but the degree of impact of each CSF is different as they have different normalized weights and rankings (Table XIII). The long term strategic goal has the highest normalized weight of 0.099 and hence stood rst in the ranking of CSFs. It can be considered as the pre-requisite for SD. Therefore, the manufacturer should carefully identify, design and plan the different issues relevant to long term strategic goal in close coordination with suppliers to make the SD adoption successful. The proximity to manufacturing base has earned second ranking with normalized
LTG LTG TMC INC SSC PMB SUC INN INS ENR EEN PEC SST DIN 1 1/2 2 1 2 2 2 1 1 1 3 2 3 TMC 2 1 3 2 3 3 3 2 2 2 4 3 4 INC 1/2 1/3 1 1/2 1 1 1 1/2 1/2 1/2 2 1 2 SSC 1 1/2 2 1 2 2 2 1 1 1 3 2 3 PMB 1/2 1/3 1 1/2 1 1 1 1/2 1/2 1/2 2 1 2 SUC 1/2 1/3 1 1/2 1 1 1 1/2 1/2 1/2 2 1 2 INN 1/2 1/3 1 1/2 1 1 1 1/2 1/2 1/2 2 1 2 INS 1 1/2 2 1 2 2 2 1 1 1 3 2 3 ENR 1 1/2 2 1 2 2 2 1 1 1 3 2 3 EEN 1 1/2 2 1 2 2 2 1 1 1 3 2 3 PEC 1/3 1/4 1/2 1/3 1/2 1/2 1/2 1/3 1/3 1/3 1 1/2 1 SST 1/2 1/3 1 1/2 1 1 1 1/2 1/2 1/2 2 1 2 DIN 1/3 1/4 1/2 1/3 1/2 1/2 1/2 1/3 1/3 1/3 1 1/2 1

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Notes: CI 0.00471; random CI 1.56; CR 0.00302

Table VI. CSF pair-wise comparison matrix of expert A

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LTG (1, 1, 1) TMC (1/3, 1/2, 1) INC (1, 2, 3) SSC (1, 1, 1) PMB (1, 2, 3) SUC (1, 2, 3) INN (1, 2, 3) INS (1, 1, 1) ENR (1, 1, 1) EEN (1, 1, 1) PEC (2, 3, 4) SST (1, 2, 3) DIN (2, 3, 4)

Table VII. Fuzzied pair-wise comparison matrix of expert A


INC SSC PMB SUC INN INS ENR EEN PEC SST (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1/5, 1/4, 1/3) (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1, 1, 2) (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1/3, 1/2, 1) (1, 1, 2) (1/3, 1/2, 1) (1, 1, 2) (1/3, 1/2, 1) (1, 1, 2) (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1, 1, 1) (1, 2, 3) (1/3, 1/2, 1) (1, 1, 1) (1/2, 1, 1) (1, 2, 3) DIN (1/4, 1/3, 1/2) (1/5, 1/4, 1/3) (1/3, 1/2, 1) (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1/3, 1/2, 1) (1/3, 1/2, 1) (1/4, 1/3, 1/2) (1/4, 1/3, 1/2) (1/4, 1/3, 1/2) (1/2, 1, 1) (1/3, 1/2, 1) (1, 1, 1)

LTG

TMC

(1, (1, (2, (1, (2, (2, (2, (1, (1, (1, (3, (2, (3,

2, 3) (1/3, 1/2, 1) (1, 1, 2) (1/3, 1/2, 1) (1/3, 1/2, 1) (1/3, 1/2, 1) (1, 1, 2) (1, 1, 2) (1, 1, 2) 1, 1) (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1/4, 1/3, 1/2) (1/4, 1/3, 1/2) (1/4, 1/3, 1/2) (1/3, 1/2, 1) (1/3, 1/2, 1) (1/3, 1/2, 1) 3, 4) (1, 1, 1) (1, 2, 3) (1, 1, 2) (1, 1, 2) (1, 1, 2) (1, 2, 3) (1, 2, 3) (1, 2, 3) 2, 3) (1/3, 1/2, 1) (1, 1, 1) (1/3, 1/2, 1) (1/3, 1/2, 1) (1/3, 1/2, 1) (1, 1, 2) (1, 1, 2) (1, 1, 2) 3, 4) (1, 1, 2) (1, 2, 3) (1, 1, 1) (1, 1, 2) (1, 1, 2) (1, 2, 3) (1, 2, 3) (1, 2, 3) 3, 4) (1, 1, 1) (1, 2, 3) (1, 1, 2) (1, 1, 1) (1, 1, 2) (1, 2, 3) (1, 2, 3) (1, 2, 3) 3, 4) (1, 1, 1) (1, 2, 3) (1, 1, 2) (1, 1, 2) (1, 1, 2) (1, 2, 3) (1, 2, 3) (1, 2, 3) 2, 3) (1/3, 1/2, 1) (1, 1, 2) (1/3, 1/2, 1) (1/3, 1/2, 1) (1/3, 1/2, 1) (1, 1, 1) (1, 1, 2) (1, 1, 2) 2, 3) (1/3, 1/2, 1) (1, 1, 2) (1/3, 1/2, 1) (1/3, 1/2, 1) (1/3, 1/2, 1) (1, 1, 2) (1, 1, 1) (1, 1, 2) 2, 3) (1/3, 1/2, 1) (1, 1, 2) (1/3, 1/2, 1) (1/3, 1/2, 1) (1/3, 1/2, 1) (1, 1, 2) (1, 1, 2) (1, 1, 1) 4, 5) (1, 2, 3) (2, 3, 4) (1, 2, 3) (1, 2, 3) (1, 2, 3) (2, 3, 4) (2, 3, 4) (2, 3, 4) 3, 4) (1, 1, 2) (1, 2, 3) (1, 1, 2) (1, 1, 2) (1, 1, 2) (1, 2, 3) (1, 2, 3) (1, 2, 3) 4, 5) (1, 2, 3) (2, 3, 4) (1, 2, 3) (1, 2, 3) (1, 2, 3) (2, 3, 4) (2, 3, 4) (2, 3, 4)

LTG (1, 1, 1) (0.944, 1.292, 2.246) (1.104, 1.426, 2.416) (1.104, 1.292, 2.34) (0.807, 1.17, 2.034) (0, 1.842, 0) (1, 1.486, 2.457) (1, 1.346, 2.318) (1, 1.346, 2.318) (1.292, 1.739, 2.826) (1, 1.426, 2.246) (0.944, 1.575, 2.457) (1, 1.426, 2.246) TMC (0.445, 0.774, 1.06) (1, 1, 1) (0.774, 1.104, 1.795) (0.855, 1.219, 2.155) (0.662, 0.906, 1.575) (0.774, 1.104, 1.842) (0.787, 1.199, 1.825) (0.855, 1, 1.87) (0.731, 1, 1.795) (0.855, 1.346, 2.225) (0.795, 1.219, 1.952) (0.82, 1.27, 2.015) (0.75, 1.17, 1.842) INC (0.414, 0.701, 0.906) (0.557, 0.906, 1.292) (1, 1, 1) (0.72, 1.104, 1.669) (0.701, 0.774, 1.486) (0.731, 0.906, 1.739) (0.701, 0.944, 1.626) (0.652, 0.944, 1.472) (0.679, 0.906, 1.534) (0.869, 1.15, 1.795) (0.635, 0.944, 1.511) (0.774, 1, 1.694) (0.662, 0.906, 1.575) SSC (0.427, 0.774, 0.906) (0.464, 0.82, 1.17) (0.599, 0.906, 1.389) (1, 1, 1) (0.483, 0.743, 1.292) (0.589, 0.869, 1.575) (0.662, 1, 1.669) (0.689, 0.869, 1.641) (0.662, 0.906, 1.575) (0.944, 1.17, 2.119) (0.82, 0.944, 1.739) (0.689, 1.06, 1.842) (0.673, 0.983, 1.601) PMB (0.492, 0.855, 1.24) (0.635, 1.104, 1.511) (0.673, 1.292, 1.426) (0.774, 1.346, 2.068) (1, 1, 1) (0.855, 1.219, 2.155) (0.855, 1.219, 2.1) (0.82, 1.15, 1.902) (0.855, 1.104, 1.982) (1.06, 1.486, 2.318) (0.774, 1.219, 1.952) (1.104, 1.292, 2.28) (0.807, 1.17, 2.034) SUC (0, 0.543, 0) (0.543, 0.906, 1.292) (0.575, 1.104, 1.369) (0.635, 1.15, 1.697) (0.464, 0.82, 1.17) (1, 1, 1) (0.855, 1, 1.87) (0.701, 0.944, 1.626) (0.701, 0.944, 1.626) (0.855, 1.219, 2.1) (0.624, 1, 1.768) (0.855, 1.104, 1.982) (0.689, 0.96, 1.739) INN (0.407, 0.673, 1) (0.548, 0.834, 1.27) (0.615, 1.06, 1.426) (0.599, 1, 1.511) (0.476, 0.82, 1.17) (0.535, 1, 1.17) (1, 1, 1) (0.624, 0.906, 1.669) (0.624, 0.906, 1.669) (0.855, 1.219, 2.155) (0.807, 1.06, 1.919) (0.944, 1.292, 2.246) (0.807, 1.06, 1.919) INS (0.431, 0.743, 1) (0.535, 1, 1.17) (0.679, 1.06, 1.534) (0.61, 1.15, 1.45) (0.526, 0.869, 1.219) (0.615, 1.06, 1.426) (0.599, 1.104, 1.601) (1, 1, 1) (0.855, 1, 1.919) (1, 1.346, 2.38) (0.82, 1.27, 2.068) (0.944, 1.426, 2.38) (0.701, 1.27, 1.985) ENR (0.431, 0.743, 1) (0.557, 1, 1.369) (0.652, 1.104, 1.472) (0.635, 1.104, 1.511) (0.505, 0.906, 1.17) (0.615, 1.06, 1.426) (0.599, 1.104, 1.601) (0.521, 1, 1.17) (1, 1, 1) (0.944, 1.292, 2.246) (0.774, 1.219, 1.952) (1.042, 1.369, 2.34) (0.82, 1.27, 2.068) EEN (0.354, 0.575, 0.774) (0.449, 0.743, 1.17) (0.557, 0.869, 1.15) (0.472, 0.855, 1.06) (0.431, 0.673, 0.944) (0.476, 0.82, 1.17) (0.464, 0.82, 1.17) (0.42, 0.743, 1) (0.445, 0.774, 1.06) (1, 1, 1) (0.82, 0.944, 1.739) (0.807, 1.06, 1.919) (0.673, 0.983, 1.601) PEC (0.445, 0.701, 1) (0.512, 0.82, 1.258) (0.662, 1.06, 1.575) (0.575, 1.06, 1.219) (0.512, 0.82, 1.292) (0.566, 1, 1.601) (0.521, 0.944, 1.24) (0.483, 0.787, 1.219) (0.512, 0.82, 1.292) (0.575, 1.06, 1.219) (1, 1, 1) (0, 0, 0) (0, 0, 0) SST (0.407, 0.635, 1.06) (0.496, 0.787, 1.219) (0.59, 1, 1.292) (0.543, 0.944, 1.45) (0.439, 0.774, 0.906) (0.505, 0.906, 1.17) (0.445, 0.774, 1.06) (0.42, 0.701, 1.06) (0.427, 0.731, 0.96) (0.521, 0.944, 1.24) (0, 0, 0) (1, 1, 1) (0.599, 0.855, 1.511) DIN (0.445, 0.701, 1) (0.543, 0.855, 1.334) (0.635, 1.104, 1.511) (0.624, 1.017, 1.486) (0.492, 0.855, 1.24) (0.575, 1.042, 1.45) (0.521, 0.944, 1.24) (0.504, 0.787, 1.426) (0.483, 0.787, 1.219) (0.624, 1.017, 1.486) (0, 0, 0) (0.662, 1.17, 1.669) (1, 1, 1)

CSFs of supplier development

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Table VIII. The integrated fuzzied pair-wise matrix comparison of CSFs for seven experts

weight of 0.89. This indicates that it is benecial to develop nearby or local suppliers in comparison to suppliers far from the manufacturers. The supply chain manager should develop a methodology to attract and encourage the local suppliers for SD. He should make local suppliers to understand the impact and importance of SD in present scenario. By the process, there will be no the confusion over SD for the local suppliers and they will get condence to adopt SD. The top management commitment has placed in third place in the ranking with a healthy normalized weight of 0.85. Top management should involve, encourage, direct and give a clear message of its commitment towards SD adoption. By that process, the SD adoption will be smooth. Similarly information sharing stands fourth in the ranking; environmental readiness stands fth in the ranking; innovation capability stands sixth in the ranking; supplier certication

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LTG TMC INC SSC PMB SUC INN INS ENR EEN PEC SST DIN

LTG 1 0.77 0.687 0.74 0.86 0.36 0.68 0.73 0.73 0.57 0.71 0.67 0.71

TMC 1.39 1 0.912 0.82 1.09 0.91 0.86 0.95 0.99 0.77 0.84 0.81 0.88

INC 1.58 1.16 1 0.94 1.21 1.06 1.05 1.08 1.09 0.86 1.08 0.98 1.09

SSC 1.44 1.31 1.13 1 1.37 1.16 1.02 1.11 1.09 0.83 1.01 0.96 1.03

PMB 1.25 0.98 0.88 0.79 1 0.82 0.82 0.87 0.88 0.68 0.85 0.74 0.86

SUC 1.29 1.17 1.02 0.94 1.31 1 0.95 1.05 1.05 0.82 1.03 0.88 1.03

INN 1.56 1.24 1.02 1.06 1.31 1.12 1 1.1 1.1 0.82 0.92 0.77 0.92

INS 1.45 1.12 0.98 0.97 1.22 1.02 0.99 1 0.95 0.73 0.81 0.71 0.85

ENR 1.45 1.09 0.97 0.98 1.21 1.02 0.99 1.13 1 0.77 0.85 0.72 0.81

EEN 1.85 1.41 1.21 1.29 1.55 1.31 1.31 1.46 1.39 1 1.01 0.92 1.03

PEC 1.49 1.27 0.99 1.06 1.27 1.07 1.16 1.33 1.27 1.06 1 0 0

SST 1.62 1.32 1.08 1.13 1.43 1.21 1.39 1.51 1.48 1.16 0 1 1.17

DIN 1.49 1.21 0.98 1.04 1.25 1.04 1.16 1.29 1.33 1.04 0 0.92 1

334

Table IX. The integrated de-fuzzied pair-wise matrix comparison of CSFs for seven experts

Notes: CI 0.008; random CI 1.56; CR 0.005

Pn LTG TMC INC SSC PMB SUC INN INS ENR EEN PEC SST DIN Sum

2 j1 bij

Pn

j1 bij

Pn

j1 bij

Table X. Integrated experts judgment on the CSFs

12.19 10.1 9.095 8.703 10.7 8.498 8.841 9.315 9.096 7.369 6.364 6.393 7.109 113.78

18.37 14.31 12.18 12.04 15.46 12.69 12.83 14.3 14.17 10.86 10.07 10.05 11.28 168.61

26.9 22.95 19.3 19.52 23.97 19.24 20.12 21.13 20.33 15.76 13.92 13.93 16.06 253.11

m2 i LTG TMC INC SSC PMB SUC INN INS ENR EEN PEC SST DIN 0.048 0.04 0.036 0.034 0.042 0.034 0.035 0.037 0.036 0.029 0.025 0.025 0.028

mi 0.109 0.085 0.072 0.071 0.092 0.075 0.076 0.085 0.084 0.064 0.06 0.06 0.067

m i 0.236 0.202 0.17 0.172 0.211 0.169 0.177 0.186 0.179 0.138 0.122 0.122 0.141

Table XI. Fuzzy synthetic extent for the CSFs

m(F1) m(F2) m(F3) m(F4) m(F5) m(F6) m(F7) m(F8) m(F9) m(F10) m(F11) m(F12) m(F13)
1 1 1 1 1 1 1 1 1 1 1 1 0.865 1 1 0.959 1 1 1 1 1 1 1 1 0.768 0.911 1 0.868 0.978 0.972 0.914 0.919 1 1 1 1 0.767 0.907 0.994 0.865 0.973 0.967 0.91 0.915 1 1 1 1 0.904 1 1 1 1 1 1 1 1 1 1 1 0.782 0.931 1 1 0.886 0.994 0.933 0.938 1 1 1 1 0.797 0.94 1 1 0.896 1 0.941 0.947 1 1 1 1 0.851 0.999 1 1 0.954 1 1 1 1 1 1 1 0.84 0.994 1 1 0.947 1 1 0.995 1 1 1 1 0.67 0.828 0.929 0.937 0.779 0.906 0.899 0.833 0.839 1 1 0.978 0.601 0.766 0.873 0.883 0.715 0.851 0.842 0.773 0.78 0.952 1 0.929 0.601 0.765 0.872 0.882 0.714 0.85 0.841 0.773 0.78 0.951 0.999 0.928 0.689 0.849 0.951 0.959 0.8 0.928 0.92 0.854 0.86 1 1 1

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Notes: DP of LTG m(F1); DP of TMC m(F2); DP of INC m(F3); DP of SSC m(F4); DP of PMB m(F5); DP of SUC m(F6); DP of INN m(F7); DP of INS m(F8); DP of ENR m(F9); DP of EEN m(F10); DP of PEC m(F11); DP of SST m(F12); DP of DIN m(F13)

Table XII. Degree of possibilities for the CSFs

Minimum of DP/weights LTG TMC INC SSC PMB SUC INN INS ENR EEN PEC SST DIN 1 0.865 0.768 0.767 0.904 0.782 0.797 0.851 0.84 0.67 0.601 0.601 0.689

Normalized weights 0.099 0.085 0.076 0.076 0.089 0.077 0.079 0.084 0.083 0.066 0.059 0.059 0.068

Ranking 1 3 8 8 2 7 6 4 5 10 11 11 9

Table XIII. Weight and ranking of the CSFs for the company I

stands seventh in the ranking; incentives and suppliers supplier condition stand eighth in the ranking; direct involvement stands ninth in the ranking; and external environment stands tenth in the ranking. Although project completion experience and supplier status are placed in the lowest in the ranking (i.e. 11th ranking), but it cannot be ignored as they have healthy normalized weight (i.e. 0.059) in comparison to other CSFs. The results in terms of ranking and impact of each CSF should be communicated to top management and relevant middle management. These results should be used as an input to the decision making process related to successful implementation of SD but the decision regarding SD should not be taken purely on the basis of the results. 6. Conclusions The SD concepts in supply chain should be studied with perfection which is the need of the hour as supply chain is becoming less vertically integrated and the manufacturer is

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focusing on its core competency. Therefore, a structured, simple and efcient approach is proposed to determine the impact level of each CSF on SD adoption in manufacturing supply chain considering the judgment of multiple experts. It is validated with an Indian manufacturing company I. The results in terms of ranking and impact of each CSF show the right direction to company I for optimally allocating resources and efforts to gain maximum benet from SD. It is concluded from the results that the long term strategic goal and proximity to manufacturing base are the two most signicant CSFs (as their ranking is rst and second, respectively) for SD. Whereas the impact of other CSFs cannot be ignored as they have got comparatively good normalized weight. The supply chain manager should take necessary steps to handle and manage the issues/decisions related to these CSFs considering their impact level for effective and efcient SD adoption in the company I. This study has not been statistically validated in Indian manufacturing supply chain for complete acceptability. Therefore, the ndings of ranking and magnitude of impact of each CSF cannot be generalized for manufacturing companies in India as it is based on only single manufacturing company. But supply chain managers can apply the proposed approach for prioritizing and ranking the CSFs of SD by capturing their manufacturing environment into priority weights, which can reect their own priority considerations. Further research is suggested in the area of green SD, optimal number of suppliers for development and their selection for a specic component/parts/service.
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About the authors Srikanta Routroy received his Bachelor of Technology in Mechanical Engineering from the College of Engineering and Technology, Bhubaneswar and his Master of Technology in Industrial Engineering and Management from IIT, Kharagpur. He completed his PhD in the area of supply chain management from Birla Institute of Technology and Science (BITS), Pilani. At present, he is working as Assistant Professor in the Mechanical Engineering Department, Birla Institute of Technology and Science, Pilani. His research interests are in the areas of supply chain management, production and operations management, evolutionary computation and manufacturing management. Srikanta Routroy is the corresponding author and can be contacted at: srikantaroutroy@gmail.com Sudeep Kumar Pradhan received his Bachelor of Technology in Mechanical Engineering from Biju Patnaik University of Technology, Orissa and his Master of Engineering in Manufacturing System Engineering from BITS, Pilani. At present, he is working as a Lecturer in the Mechanical Engineering Department, BITS, Pilani. His research interest lies in supply management in a manufacturing environment.

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