How can multi-criteria decision analysis help you choose the best supplier?

2 How does MCDA work?

MCDA consists of several steps, such as defining the problem, identifying the alternatives, selecting the criteria, assigning the weights, scoring the alternatives, and aggregating the scores. Depending on the type and complexity of the problem, different methods and tools can be used to perform these steps. For instance, Simple additive weighting (SAW) sums up the weighted scores of each alternative for each criterion; Technique for order preference by similarity to ideal solution (TOPSIS) ranks the alternatives based on their closeness to the ideal and the farthest from the negative-ideal solutions; Analytic hierarchy process (AHP) uses pairwise comparisons to derive the weights and the scores of the alternatives; while Elimination and choice expressing reality (ELECTRE) uses outranking relations to compare the alternatives and eliminate the dominated ones.

3 How can MCDA help you choose the best supplier?

MCDA can help you select the best supplier by enabling you to define objectives and criteria systematically, compare multiple suppliers on multiple dimensions, and incorporate subjective preferences into the decision process. It also allows you to evaluate trade-offs and the sensitivity of results to changes in weights or scores, as well as communicate and justify your decision to stakeholders and partners. MCDA can improve the quality and transparency of decision making while reducing the risk of bias or error. However, it has some limitations and challenges such as choosing the appropriate method and tool, collecting reliable data from suppliers, dealing with uncertainty or ambiguity of data or criteria, handling complexity and computational requirements, and managing participation and feedback from decision makers and experts. Therefore, you should use MCDA with caution and critical thinking, always checking the validity and robustness of your results.

5 How can you learn more about MCDA?

If you are looking to gain more knowledge on MCDA and how to apply it to your supplier selection problems, there are several resources available. You can read books and articles on MCDA theory and practice, take online courses or workshops, use software or tools that can help you perform MCDA, or consult experts or practitioners with experience in the topic. Examples of books include "Multi-Criteria Decision Analysis: Methods and Software" by Alessio Ishizaka and Philippe Nemery, or "A review of multi-criteria decision-making methods applied to supplier selection" by Narges Rezaei et al. Courses and workshops include "Multi-Criteria Decision Making" by edX, or "Multi-Criteria Decision Analysis for Engineers and Managers" by Coursera. Examples of software or tools include Expert Choice, Decision Lab, or MCDA Web. Finally, experts or practitioners who can provide insight on MCDA include industrial engineers, operations researchers, or management consultants.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?