Study On Third Party Supplier Evaluation And Selection In Dangerous Chemical Industry

Supply chain management emphasizes that enterprise should concentrate on the key business (the core competition of the enterprise) and take advantage of it. At the same time, the enterprise should build strategic relationship of collaboration with companies around the world and assign the non-core business to these companies to complete, which is the so-called outsourcing. These enterprises that practice supply chain management will gain more competition advantages through outsourcing than utilizing in-sourcing only. With the background of globalization of world economics, logistics management represents the trends of supply chain management. Therefore, supplier management becomes more and more important in the supply chain management.After the introduction of the mainstream of supplier evaluation methods (Delphi method, Fuzzy theory, decision tree method, and Analytic Hierarchy Process), this essay focuses on the application of Analytic Hierarchy Process to the business, that is, how to select the optimal supplier from the third-party suppliers by using Analytic Hierarchy Process.In order to select the optimal third-party supplier, we first need to build an AHP Analysis Model according to the actual situation. Based on this model, we then need to construct a comparison matrix in term of the requirements (economics, security, operation, and size of the company) of KPI system for the supplier evaluation method. After the calculation of the corresponding eigenvalue in the matrix, we sort the values hierarchically and check the consistency of the values. If the consistency indicator CR is less than or equals 0.1 (CR <= 0.1), the calculation is satisfied, otherwise we need adjust the comparison matrix and re-calculate the values until the consistency indicator CR is less than or equals 0.1. The last step is to compare the computed results with the actual situation to see if there is any differentiation.