Appraisement and benchmarking of supply chain performance extent: A fuzzy grey relation method

Supply chain performance (SCP) extent can be attributed as a function of multiple criteria/attributes. Most of the criterions/attributes being intangible in nature; SCP appraisement relies on the subjective judgment of the decision makers. Moreover, quantitative appraisement of SCP appears to be very difficult due to involvement of ill-defined (vague) performance measures as well as metrics. The purpose of this paper is to develop an efficient decision support system (DSS) to facilitate SCP appraisement, benchmarking and related decision making.

This study explores the concept of fuzzy logic in order to tackle incomplete and inconsistent subjective judgment of the decision makers’ whilst evaluating supply chain’s overall performance. Grey relational analysis has been adopted in the later stage to derive appropriate ranking of alternative companies/enterprises (in the same industry) in view of ongoing SCP extent.

In this work, a performance appraisement index system has been postulated to gather evaluation information (weights and ratings) in relation to SCP measures and metrics. Combining the concepts of fuzzy set theory, entropy, ideal and grey relation analysis, a fuzzy grey relation method for SCP benchmarking problem has been presented. First, triangular fuzzy numbers and linguistic evaluation information characterized by triangular fuzzy numbers have been used to evaluate the importance weights of all criteria and the superiority of all alternatives vs various criteria above the alternative level. Then, the concept of entropy has been utilized to solve the adjusted integration weight of all objective criteria above the alternative level. Moreover, using the concept of the grey ration grades, various alternatives have been ranked accordingly.

Finally, an empirical example of selecting most appropriate company has been used to demonstrate the ease of applicability of the aforesaid approach. The study results showed that this method appears to be an effective means for tackling multi-criteria decision-making problems in uncertain environments. Empirical data have been analysed and results obtained thereof, have been reported to exhibit application potential of the said fuzzy grey relation based DSS in appropriate situation.