Integrated Model for Supplier Selection and Production-Distribution Considering Consumer Risk and Product Safety in Supply Chain

Abstract

Recent product recall scandals, ranging from consumer goods to food and pharmaceutical products indicate that manufacturers and consumers are vulnerable to quality and safety risks in global supply chain. Individual members of supply chain must make appropriate strategic decisions to enhance product safety and operational performance. Most of recent product recall incidents indicate that effective suppliers’ performance and production-distribution planning may played a vital role in increasing product safety. This dissertation will explore the opportunities to increase the product safety by analyzing the performance of suppliers’ and production-distribution system. The novelty this study is development of integrated supplier selection and production-distribution model considering consumer risk and product safety. Furthermore, a novel grey-fuzzy solution methodology is developed to solve the proposed model in this dissertation. In phase I of dissertation, the supplier selection framework is proposed. The framework first identify the important supplier performance evaluation factors affecting product safety based on extant literature and refined through analysis of recent product recall events. Then, a grey-goal programming based approach is proposed to evaluate and select suitable suppliers and allocate optimal order to each selected supplier such that product safety risks should be minimized. Findings suggested that quality and safety of ingredients, products and packaging material are paramount to success of any manufacturer and it is extremely difficult to successfully maintain these attributes without considering a suitable set of suppliers. Phase II created the integrated mathematical model for supplier selection and production-distribution planning based on grey multi-objective mathematical approach. The aim of proposed multi-objective model is to reduce the consumer risks due to poor production-distribution planning and inappropriate selection of material suppliers. In this phase of study, a novel grey-fuzzy multi-objective solution methodology is developed which consists of two algorithms (grey weighted ε-constrained and grey-weighted Werner methods) for solving integrated multi-objective mathematical model. Research findings suggested that economically designed supply chain is harmful for consumers with respect to product safety criteria. In order to increase the consumers’ safety, the organization needs to modify their production-distribution system and reconsider their suppliers’ selection based on performance of product safety criteria.