an ahp- structural contingency theory -based approach for
TRANSCRIPT
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An AHP- Structural Contingency Theory -Based
Approach for Supplier Selection: Insights from an
Algerian Industrialized Company Nacereddine Bouriche1, Grant Wilson2, Mohammed Kishk3
1Department of Management, University of Biskra, Algeria
2 Head of Environment. SAC Consulting | Ferguson Building | Craibstone Estate | Aberdeen AB21 9YA, UK
3 Faculty of Environment and Technology, University of the West of England -UWE Bristol), UK
Abstract
In this paper, a structural contingency approach is demonstrated, as a roadmap for applying the
Analytic Hierarchy Process (AHP) method for supplier selection in an Algerian supply chain
environment. Despite the fact that various earlier research advocated a range of strategies for
selecting effective suppliers, the AHP was identified as the most popular. There is no
immediate evidence that techniques have taken into account the contingency theory for supplier
selection while using the AHP. This research aims to consider and fill this gap by utilizing the
most widely used set of key performance indicators (KPIs) derived from related literature with
relation to wires/cables from the perspective of industry and subject matter experts.
Furthermore, a comparison between a company case study procedure and the proposed
methodology has been offered. The proposed framework seeks to tackle an issue of multi-
criteria decision attribute observed by the authors in the company case study. Moreover, the
proposed approach suggested that behavioural KPIs should be considered exclusively, without
incorporating quantitative KPIs, which in this case study were price/cost; this is to eliminate
the potential negative effect of the price / cost factor on the outcomes of the supplier selection
process, which has potential to lead to a conflict with the company's strategic objective.
Findings revealed that using AHP crudely would contradict the implementation of the strategic
alignment process. As a structural contingency logic, AHP implementation does necessitate, in
some cases, removing at least one factor from the model in order to improve strategy alignment.
Keywords: AHP, Contingency Theory, Supplier Performance, MCDM
1. Introduction
Selecting the most appropriate supplier, as the up-stream actors, has an important impact on a
supply chain's efficiency and productivity (Tavana et al., 2021), as it will influence the supply
chain’s competitiveness (Büyüksaatçi Kiriş et al., 2020).
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Supplier’s options for the buyers’ firms are often challenging for a number of reasons, such as
conflicting evaluating factors and several unquantifiable criteria, such the behavioural aspects.
The possible impact of this being, that buyer’s demands, aligning with supplier’s options, can
present a demanding challenge. Moreover, supplier’ selection has a strategic effect in supply
chain management (SCM). Therefore, supplier selection is considered as a critical issue in
SCM for sustaining a competitive advantage.
Classical ways to supplier selection have primarily focused on financial performance
indicators, but after 1980s another set of essential factors including those with behavioural
characteristics, especially the non-financial key performance indicators(KPIs) such as quality,
flexibility, delivery and environmental performance have been also highlighted (Kilincci &
Onal, 2011; Liu et al., 2019; Tavana et al., 2021)
Framed within the context of the study conducted by PwC and the Business Continuity Institute
in 2013, 75% of businesses experience at least one major supply chain disruption each year,
with supply-related issues accounting for the majority of the disruptions (Yoon et al., 2018).
As a result, researchers have sought to develop advanced decision-making methodologies to
assist in the selection and implementation of appropriate supplier development activities
(Glock et al., 2017).
Accounting for procurement in strategic planning provides clarity on needed supplier
responsibilities and qualifies the selection of relevant suppliers for the consolidation of
organizational strategic capabilities (Nair et al., 2015). In this regard, the structural contingency
theory (Galbraith, 1973) claims that the effectiveness of an organizations operations, may be
determined by how well its strategy is linked with its design; this alignment between strategy
and organizational performance is referred to as "fit." (Milgrom and Roberts, 1995), In the SC
context, structural contingency theory proposes that the supplier's performance evaluation
should be matched with the company's strategy.
In this paper, to align the supplier selection objective with the company's strategic objective,
the proposed structural contingency-based framework using the AHP method suggested that
the price/cost criterion, which is included in almost all previous frameworks or constructs of
supplier performance evaluation, be removed from the evaluation criteria and that its potential
negative impact on the company's strategic objective be cancelled. This fits the company case
study as observed by the authors.
A wire/cable firm has been chosen as a case study to assess the applicability of the proposed
approach. Wire and cable industries fulfil three main functions: they transport information
and/or energy, carry loads, or perform both functions occasionally. Wires and cables businesses
have a significant socio-economic impact on all socio-economic sectors as a result of these
three functions. Therefore, it is critical to assess and measure these industries’ supplier’s
performance for which an efficient framework should be designed. To do this, a set of KPIs
from the literature and wire/cable industry experts’ opinions are selected to help the buyer to
have a thorough understanding of the supplier’ performance measurement (PM) process. In the
context of an Algerian wire/cable company, the framework is used to evaluate the performance
of a wires/cables industry’s suppliers.
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The classical procedure of evaluating supplier performance was solely based on cost/price
criteria. Companies have realized, however, that approach, which emphasises cost/price as the
sole consideration, is ineffective and must be altered (Parthiban et al., 2013). As a result, multi-
criteria techniques have been considered. Environmental, social, and behavioural aspects have
been added to these multi-criteria decision making (MCDM) systems, making them more
complicated (Parthiban et al., 2013). Alternatively, however, the AHP technique can be viewed
as another MCDM method, used to address the criteria multitude problem as well as the
unquantifiable factors related to behavioural aspects.
In this study, a framework based on structural contingency logic and the AHP approach is
developed for supplier selection to overcome the criteria plurality problem and to negate the
price/cost influence on the company's strategic objective.
From a comprehensive review of the literature, there is confidence that this paper describes a
novel approach to dealing with the wires/cables industry, specifically in terms of supplier
selection using the AHP method from a structural contingency approach. Furthermore, there
appears to be no globally accepted strategy or framework for selecting suppliers that matches
all buyer types. Moreover, the research incorporates a review of the general literature for related
KPIs as well as the opinions of wire/cable experts to produce a full set of KPIs that are
appropriate for the company case study based on a structural contingency logic. A key driver
of this work, is to clearly identify that some performance assessing criteria/factors for the
supplier’s selection should be excluded as a structural contingency logic, where the company's
strategic objective is taken into account. A framework is introduced to aid senior tier decision-
makers in refining their supplier selection processes, in order to attain these objectives and fill
these research gaps.
The nature of the suggested framework's adaptability, proposes that it can be used by other
buyers in different industries' scenarios. The following is a breakdown of the paper's structure.
The relevant literature is reviewed in Section 2. Section 3 contains the methods. The case study,
research methodology and data collections, are defined in Section 4. Section 5 contains the
numerical experiments, results analysis, and comments. As a final point, conclusions and
perspective research are drawn in Section 6.
2. Literature review
Some relevant publications are examined in this area, along with approaches/frameworks and
a variety of measures for supplier selection.
In the context of supplier selection decision making, Lima Junior et al.,(2014) conducted a
comparison of the methods Fuzzy TOPSIS (Fuzzy Technique for Order of Preference by
Similarity to Ideal Solution) and Fuzzy AHP; both methods were used to supplier selection of
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a company in the automotive production chain .Kilincci & Onal (2011) proposed a fuzzy AHP-
based methodology to handle a washing machine company's supplier selection problem. They
calculated the priority weights of the alternatives using MS Excel macros based on the
questionnaire forms. Awasthi et al., (2010) presented a fuzzy-TOPSIS multicriteria approach
for evaluating environmental performance of suppliers. Linguistic assessments are used to rate
the criteria and the alternatives. A numerical application is provided to demonstrate the
proposed approach. Wu (2010) developed a stochastic efficiency analysis model as a new
methodological extension to data envelopment analysis (DEA) for the international supplier
evaluation. Aksoy and Öztürk (2011) advanced a neural network based supplier selection and
supplier performance evaluation systems to aid just-in-time manufacturers in selecting
appropriate suppliers . Their proposed approach was tested with data taken from an automotive
factory. Ho et al., (2012) introduced modified Importance-Performance Analysis which uses
the multiple regression analysis and Decision Making Trial and Evaluation Laboratory
(DEMATEL) techniques to promote supplier quality improvement and solve complex
problems using the cause-effect relation for the Supplier Quality Performance Assessment . A
case of computer manufacturer is illustrated. Xue et al., (2018) employed a multi-stage multi-
criteria decision-making (MCDM) method based on the evidential reasoning approach. A
criteria framework of the supplier performance evaluation problem is constructed first. Then
belief distributions are adopted to model the problem, wherein the rule-based information
transformation technique is introduced to unify quantitative data and qualitative information.
An illustration of high-speed train manufacturing case was given. Liou et al., (2019) developed
a data-driven MCDM model that utilizes potential rules/patterns derived from a large amount
of historical data to objectively select appropriate green suppliers .In this line, the authors
combined other techniques such as the random forest algorithm and the DEMATEL
From the perspective of a Turkish supplier, Inemek & Tuna (2009) conducted a literature study
on global supplier selection procedures and implications for supplier performance. Quality,
delivery, price, commitment and trust were found to be the most important factors in selecting
global suppliers and maintaining long-term supply relationships. The authors demonstrate that
44 criteria were utilized in the evaluation and selection of suppliers, with quality being the most
frequently mentioned and regarded as the most essential criterion, followed by delivery and
cost. Tavana et al., (2021) proposed a fuzzy‐ based methodology that integrates the fuzzy
group best‐ worst method and the fuzzy combined compromise solution method for supplier
selection in reverse SCs within a lean, agile, resilient and green strategies in an automotive
paradigm. Noshad & Awasthi (2015) introduced a multistep approach including fuzzy DEA
,Delphi technique and the AHP method. Büyüksaatçi Kiriş et al.,(2020) advanced a model
which its main focus is on five performance criteria: reliability, responsiveness and agility for
customers; costs and asset management efficiency for internal. Their model integrated the
SCOR system and the fuzzy DEMATEL method.
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Parthiban et al., (2013) proposed the MISM technique (modified interpretive structural
modeling) and AHP to develop an integrated multi-objective decision making process for
supplier performance evaluation. The cost was one of ten criteria in their decision model. An
enhanced approach to MCDM approaches was described and applied by Parthiban et al., (2013)
on an automotive component company, they used fuzzy logic, strength-weakness-opportunity-
threat (SWOT) analysis, and data envelopment analysis (DEA). As supplier performance
criteria, they consider quality, delivery, productivity, costs, and services. With an actual case
study, Sevkli et al., (2007) combined the DEA technique and the AHP. The cost was one of
more than 20 criteria included in their methodology.
There is no research on supplier selection employing both the AHP method and the structural
contingency theory while removing the price/cost factor or while at least clarifying that one or
more criterion should be omited from the structural contingency view point to emphasize more
the company's strategic objective priority, according to the relevant literature. Furthermore, the
presented framework incorporates expert opinion while also taking into account relevant
literature, making the proposed approach more practical and resilient. Morever, the use of the
suggested framework for operations managers has been simplified by avoiding the complexity
of mathematics models.
Operations managers tend to adopt simple methods in their daily duties due to time constraints.
Despite the fact that the aforementioned frameworks are backed up by solid mathematical
models. Nevertheless, from the point of simplicity, their implementation requires a strong
understanding of software engineering and/or mathematics. As a result, the objective of this
research is to provide a practical and easy model that operations managers (or buyers) can use
to select their suppliers. Despite the fact that AHP is a robist MCDM, its implementation is
simple and has a short learning curve (Mead 2008). For these reasons, the authors proposed a
framework for evaluating supplier performance in order to improve the decision-making
process and enhence the outcomes connected to supplier PM in an Algerian SC setting.
The proposed framework's usefulness is demonstrated by its application in a wire/cable firm.
Finally, the proposed framework's results are presented to the case company's SC management
in order to improve their supplier selection outcomes.
3. Methods
3.1 Supplier selection reasoning based on structural contingency theory
It is self-evident that the essence of a SC is that it is a system or a collection of subsystems,
i.e., the SC partners, of which the supplier is one of the most important, is a subsystem in
essentially any SC type. As a result, ignoring system thinking when studying the SC or any of
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its subsystems concepts such as the environmental suprasystem, the interconnected nature of
its partners as subsystems, and the system boundary notion, which led to the concepts of
"closed" and "open" systems, which have been primarily useful in integrating process,
quantitative, and behavioural or qualitative constructs, is not an option(Luthans & Stewart,
1977).
Despite the fact that each construct from various management approaches have been effective
in specific situations, quantitative constructs have had significant difficulty accommodating
behavioural or qualitative factors, and behavioural theorists have been more commonly
effective in solving management problems more adaptable to quantitative approaches (Luthans
& Stewart, 1977). There appears to be a need for a new management theoretical framework
that can integrate various process, quantitative, and behavioural concepts into an
interconnected theoretical system while also defining specific functional relationships between
situational factors, management concepts and applications, and organizational performance
(Luthans and Stewart, 1977). When used to supplier performance management (SPM), the
AHP can accommodate both qualitative and quantitative aspects, as it may be used to create a
new theoretical framework solution for SPM that integrates many quantitative and behavioural
notions into a single theoretical system. The situational approach, on the other hand, claims
that the most effective management concept or practice is determined by the collection of
circumstances at a given point in time (Luthans & Stewart, 1977). Contingency
theory(Thompson, 1967) states that no single superior approach can be used in all
circumstances, implying that there is no single superior method or theory for managing an
organization (Flynn et al., 2010). It further infers that the efficacy of certain managerial
techniques such as participative decision making or task directed leadership is contingent on
the organization’s context and structure. In this vein, organisations are always founded in a
setting that includes both an internal and a situational exterior context. As a result, the
environment influences the structure, processes, and technologies of organizations, as well as
customers and suppliers, who are a significant element of a manufacturer's environment. (Flynn
et al., 2010; Thompson, 1967; Waterhouse & Tiessen, 1978)
Structural contingency theory (Chandler, 1962 as cited in Luthans and Stewart, 1977) is an
extension of contingency theory that claims that how effectively an organization operates is
determined by how well the strategy it tries to pursue is linked with its design. In the literature
on strategic management, this alignment between strategy and performance is referred to as
"fit" (Flynn et al., 2010). Applied to SC, supplier performance should be evaluated and selected
in accordance with the manufacturer's strategy. In addition to organizational and environmental
contingencies, a third type of contingency recently emerged in strategy research is the level of
performance attained by a business. Similar to the role performed by environmental and
organizational factor, the level of performance also dictates a variety of strategic options open
to an organisation. For example, the options open to a company whose performance is
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continually dropping differ significantly from those available to a company whose performance
is steadily improving (Harrigan,1980 as cited in Ginsberg and Venkatraman, 1985). As a result,
any thorough approach for defining the domain of strategy’s contingency perspectives should
also include performance as a key contingency influence(Ginsberg & Venkatraman, 1985).
Our approach recommends that the AHP technique should only cope with behavioural aspects
accounting for the company's strategic objective to avoid the effect of cost/prices on the
company's strategic objective, based on structural contingency logic. AHP, on the other hand,
has been implemented to improve behavioural measurements and address the problem of
inconsistency that usually happens when dealing with behavioural aspects. Using the AHP to
evaluate and select suppliers, dealing with both behavioural and quantitative (i.e., prices/cost
of raw materials in our case study) factors at the same time might produce results that are at
contradiction with the company's strategic objectives. AHP was also chosen because of its
simplicity. Simplicity can be considered a situational aspect from the structural contingency
logic and a rational argument to use the AHP in this case.AHP is implemented to rank a set of
supplier’ performance according to the most common set of KPIs derived from the literature
and the wire/cable industry's experts: quality, delivery, service and reliabilty. Finally, the
importance of each criteria is attained that can help the buyer to improve the PM processes and
to reveal the top performant supplier according to the company’s strategy.
3.2 KPIs for supplier’s selection in the wire/cable industry
Several performance indicators, based on the published literature, and framed in the context of
in-depth interview’s result with a heterogeneous sample of experts (Saunders et al., 2009) from
the wires/cables industry, are introduced from which relevant KPIs are identified (Table. 1).
Table 1: KPIs in wire/cable industry based on literature and experts’ opinion
KPIs(criteria and sub-criteria) References
Cost /Price (Monczka & Trecha, 1988; Van Nyen
et al., 2009)
Service (Hammami et al., 2020; Posselt &
Gerstner, 2005)
Reliability (responsiveness and problem-
solving ability)
(Islam et al., 2020; Kim et al., 2012;
Lee et al., 2020)
On-time deliveries (Grout & Christy, 1999; Kamalahmadi
& Mellat-Parast, 2016; Noori-Daryan
et al., 2019)
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Quality (raw material quality, compliance
to regulations and specifications, quality of
delivery documentation )
(Kalaignanam et al., 2017; Persson &
Olhager, 2002)
Environmental performance (Awasthi et al., 2010; Humphreys et
al., 2003; Shen et al., 2013)
3.3 The AHP approach
AHP (Saaty & T.L, 1980) has been regarded as one of the most widely used MCDM methods
to date due to its ease of use and flexibility. It can account for behavioural factors, which were
thought to be a step forward from existing MCDM techniques (Emrouznejad & Marra, 2017).
It also allows for the weighing of decision-making inconsistency (Saaty & T.L, 1980), which
is a distinctive feature when compared to other MCDM techniques. AHP also allows experts'
obsolete judgments to be embodied. Accounting for these factors would make the proposed
model more effective. Furthermore, suitable software, such as the SuperDecision
software(www.superdecisions.com), greatly facilitates the decision-making process, allowing
the degree of inconsistency in the decision-making process to be easily measured. Another
advantage of the AHP approach is that the paired comparison can be repeated to decrease
potential conflicts.
In this study, AHP incorporated behavioural KPIs while quantitative ones which were the
cost/prices in our case study have been excluded from the model from the structural
contingency point of view and that to measure the supplier’s performance without affecting the
strategic objective of the company case study. To test the proposed approach, the AHP method
was applied twice, as in the first method (Method A) the AHP model incorporated five main
criteria (quality, delivery, reliability, service and the price/cost criterion), and in the second
method (Method B) the AHP model has been applied including only the first four mentioned
criteria (i.e. the price/cost criterion has been omitted from the model). Subsequently, a
comparison between the company method results which is a price/cost based method and the
method A and the method B (the proposed approach) have been illustrated to reveal the
robustness of the proposed approach.
4. A case study
4.1 Research strategies and data collection
This study employed a case study research strategy based on the authors' observations,
which revealed two major issues: a delay in a significant amount of deliveries and the
price/cost-based method of supplier selection. The triangulation technique was used to
collect data, which involved a combination of in-depth interviews with a heterogeneous
purposive sample of wires/cables experts, as well as archival research and a partial literature
review (Saunders et al., 2009)
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4.2 The company’s profile
‘Entreprise National des Industries des Cables Biskra’ (ENICAB). Was established on 1982.
On 20/05/2008, ENICAB became a subsidiary of Group Cable Sistemas. It covers 35% of
national needs in all wire /cable types.
The copper constitutes the strategic as well as the principal part of purchased raw materials.
For that reason, it has been dealt only with the copper’s suppliers as a non-probabilistic
sample (Saunders et al., 2009)
5. Implementation of the proposed approach
In this section, the implementation illustration of the AHP model is devoted to the model B
(the proposed approach) as far as the model A, the same steps are fallowed.
The AHP implementation involves five stages: (A) Diagnosing the problem; (B) Structuring
the decision model, (C) Pairwise comparisons construction (D) Assessing the model and
(E)Results including supper matrices development and discussion (Thomas., 2008).
5.1. Diagnosing the problem
The proposed AHP is focused on the copper (8mm Ø) suppliers. This category of raw materials
accounts for around 45 percent of the overall material amounts. Given the fact that the company
is aiming to implement ISO 9001:2008 standards, the problem of supplier PM is still being
managed in a largely obsolete method, that used a cost-based decision method. Furthermore,
when it comes to supplier PM and selection, the organization does not use the AHP method or
any modern MCDM technique. In these circumstances, all pair-wise comparisons have been
made based on the buyer's experience collaborating with a single author.
5.2. Structuring the decision model
A MCDM software, with the proprietary identifier of 'SuperDecisions'
(www.superdecisions.com) has been employed to carry out all calculations and form the AHP
structure. Figure. 2. Illustrates the proposed model.
5.3. Pairwise comparisons
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A unique nine-point scale was utilized to conduct all pair-wise comparisons, resulting in a total
of eleven questionnaires; even numbers are intermediate values (Thomas., 2008). Following
that, we have 11 matrices: one for the criteria cluster and two for the sub-criteria clusters; the
first is for the sub-criteria under the ‘quality’ node; it covers raw material quality,
documentation quality, regulatory compliance, and environmental performance. The other one
is for the sub-criteria cluster related to reliability criteria which includes responsiveness and
problem-solving ability nodes. (figure. 1)
Figure. 1. AHP model construction’s screenshot (method B)
5.4. Assessing the model
The factors' priorities are determined. The output of the limit matrix can be translated into
relative priorities, which are the total preferences of the company's possible suppliers and the
prominence of the corresponding evaluation criteria
5.5. Results: supper matrix development and discussion
This stage includes the supper matrix development. The eigenvectors, which have been
figured by the software, are presented by The Limit Matrix. Table. 2. Shows the concluding
results from the Limit Matrix.
Table 2: Alternatives (suppliers)priorities and ranking (method B)
Alternatives Priorities Ranking
Supplier B 0.0702 5
Supplier E 0.1328 3
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Supplier A 0.3488 1
Supplier C 0.3197 2
Supplier D 0.1285 4
Table 3: Priorities of main evaluation criteria (method B)
Quality 0.25
Time delivery 0.5
Service 0.125
Reliability 0.125
Table 4: Priorities of main evaluation criteria (method A)
Quality 0.086957
Time delivery 0.173913
Service 0.043478
Reliability 0.086957
Cost/price 0.086957
In Method A, the authors entered the cost/price factor. Moreover, the authors directed the buyer
to raise the degree of preference for the time deliveries (table 4), since the company suffers
from delays in delivering orders on time. However, we note that the cost/price factor still has
a negative impact on the rest of the criteria. This however, aligns with the strategic objectives
of the company, where the company believes in the importance of satisfying and meeting the
needs of its customers, but it is not enough if the company wants to allow greater importance
to the other factors/criteria especially the delivery time. For these reasons, the authors
considered that it appropriate to remove/eliminate the cost/price factor, to allow greater
importance to the company's strategic objectives with priority focus on the time deliveries
factor and this is what was followed in Method B as a structural contingency approach. This
doesn’t mean the total neglect of the cost / price factor, but rather it is a strategic choice which
is sacrificing an objective with less strategic importance (i.e., make profit in the short term) for
a more important strategic objective which is gaining customer satisfaction and improving
market share. This is because the current conditions of the company call for accelerating the
improvement of the time deliveries, in addition to the fact that the prices of suppliers do not
differ much.
Table 3 shows the proportional relevance of criteria. The most significant of these factors was
determined to be 'delivery time' (0.5), followed by ‘quality’ (0.25). In terms of alternatives
(Table 2),'supplier A' (0.3488) was the best performing possible supplier, followed by 'supplier
C' (0.3197). According to table.2, pairwise comparisons should be carried out in accordance
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with the company's strategic objective. In this context, the author indicated in the in-depth
interview that the buyer should prioritize the ‘delivery time’ and the ‘quality’ which are more
aligned with the company's strategic objectives. As a result, the buyer has assigned the 'delivery
time' criterion (0.5) and the 'quality' criterion (0.25), higher than the other factors. Because the
buyer believes that the suppliers have the same quality.
5.5.1 Results’ comparison of the company method, method A, and the proposed
method B
Table 5 demonstrates the results of the three methods
Table 5: Alternatives ranking and priorities according to the company method, the method A and method B
Alternatives with their
prices/cost in dollar/ton
The company
method(price/cost-based
method)
Method A: The AHP
method including
price/cost as a criterion
Method B: The proposed
method with regards to
contingency
logic(excluding the
price/cost criterion)
Supplier A(5964$/ton) 2 2 1
Supplier B(5972$/ton) 3 5 5
Supplier C(5959$/ton) 1 1 2
Supplier D(5994$/ton) 4 3 4
Supplier E( 6317$/ton) 5 4 3
Table 5 shows that the suppliers’ ranking results according to the company’s method and
method A correspond to a large extent with each other, that due to the price/cost effect on the
model results, where the model was affected by the cheapest suppliers at the expense of the
influence of other behavioural factors (quality, delivery time, reliability and service). As these
results do not fit the company’s strategic objective. i.e., satisfying customers with regard to the
mentioned behavioural factors. This indicates the threat of the ‘crude application’ of the AHP
without taking into account the circumstances of the organization as a structural contingency
approach. The aforementioned behavioural factors present strategic choices regarding
customer satisfaction, as well as being a critical factor for the company’s competitive
advantage achievement, especially since the prices of suppliers do not differ greatly (table 5).
Therefore, to make the supplier selection’s objective compatible(‘fit’) with the company’s
strategic objective, method B should be adopted.
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6. Conclusion
The performance of wires/cables industry suppliers was measured and evaluated in this study
using a structural contingency AHP-based framework, which considered and addressed the
problem of supplier performance decision-making in connection with the company's strategy.
The buyer's evaluation of the supplier's performance can be viewed as a beginning point for
contributing to the company SC's performance improvement. In this regard, the AHP
application from the structural contingency theory perspective can provide a roadmap for
completing this difficult endeavor.
Using old performance measurements like the cost-based method would be in conflict with the
company's strategic objective. Furthermore, research revealed that, similar to the role
performed by environmental and organizational contingencies, a business's degree of
performance dictates a range of strategic options available to it. In this context, findings
demonstrated that to benefit from the application of the AHP method, the situational factor
must be taken into account, in which the strategic objective is the most important factor. On
this basis, the application of AHP may call for the cancellation of some factors in order to focus
on other factors or to avoid the effect of the removed ones on the rest of the factors that better
serve the strategic objectives of the company.
The proposed framework would assist the buyer in having a more effective decision-making
process for evaluating and selecting suppliers. As a result, it will aid in the enhancement of SC
performance. Accounting for new research that promotes the building of a lengthy relationship
based on trust and collaboration between the buyer and the supplier will considerably increase
the supplier's performance since it will be a good complement to this research.
Acknowledgment
The authors express their gratitude to Mr. Nacereddine HOUHOU, the SC manager, for his
invaluable assistance, as well as Mr. Maria GALLEGO, the Chief Executive Officer-CEO of
Group Cable Sistemas' ENICAB subsidiary. Furthermore, ENICAB's specialists, the
conference's scientific committee, and the paper's anonymous referees deserve appreciation.
216
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