Supply Chain Management of Outsourcing Module Components Decision-Making using Analytical Hierarchy Process and Visual Basic Application in Automotive Body-in-White Welding Assembly Line

Abstract

Supply Chain Management (SCM) has gained the attention of business organizations as it affects corporate efficiency and competitive advantage. Component outsourcing is an important element of SCM practices and is considered to be a multi-criteria decision-making problem (MCDM) in vendor selection processes. However, decision-making on the selection of vendors is crucial, as the outsourcing program is influenced by multiple technical and commercial criteria of vendors. Developing an Excel-based Analytic Hierarchy Process (AHP) model for vendor selection therefore helps to simplify selection processes. In this paper, a Visual Basic Application (VBA) Excel-based AHP model was developed, which multiple criteria, sub-criteria and vendors and simultaneously compared with multiple main criteria, sub-criteria and alternatives for vendor selection. The model was validated with a case study of selecting a vendor for module components of body-in-white (BIW) in automotive industry as industrial application. As a result, vendor A is the best vendor since it has the highest overall score of 0.35206. Whereas vendor B is 0.239, vendor C is 0.126, vendor D is 0.146 and vendor E 0.135. In addition, the model is capable of resolving other MCDM problems. This paper provides resources such as AHP methodology, validating method and VBA code programming to readers in developing their own VBA Excel-based model.