To remain competitive in customer-oriented economics, the major parties in the supply chain should be integrated and managed effectively to respond to customer needs. Thus, the efficiency of the entire supply chain is a main concern, and is determined by the members of that supply chain. Partner selection thus becomes one of the key steps in supply chain construction. Given buyer-supplier information asymmetry, obtaining complete information from suppliers is difficult, since some supplier attributes cannot be definitely and quantitatively measured. This study establishes a suppliers capability and price analysis chart (SCPAC) focused on the case where the specification limits are symmetric about the target for evaluating supplier performance which applies the process incapability index Cpp introduced by Greenwich and Jahr-Schaffrath (International Journal of Quality & Reliability Management 12 (1995) 58) to measure supplier quality performance and the price index Ip is proposed here to display the difference between budget and component price. Practitioners can instantly and visually obtain information based on the locations of suppliers and price indices on SCPAC. SCPAC also provides clear directions for quality improvement, such as process accuracy and precision. SCPAC thus is an effective and efficient method for evaluating suppliers, which can simplify supplier evaluation, facilitate their effective visual selection, and provide insights into the process situation of suppliers who can become technological innovation partners.
- Price index
- Process incapability index
- Supplier selection
- Suppliers capability and price analysis chart