A multiple criteria suplier selection model for Vietnamese textile and apparel companies

Abstract

Competitive international business environment in the global textile and apparel market has forced many textile and apparel firms to concentrate on supply chain management in order to face with fierce competition. Supplier selection process, a part in supply chain, has been a prime concern recently because many of firms in the world in general and in Vietnam in particular have been spending considerable amount on sourcing. Although the selection of suppliers is important, most of Vietnamese textile and apparel companies have a very simple process and only choose suppliers intuitively. This is one of the reasons causing high sourcing costs that often result high-price output, unstable quality products, and then lower the competitive advantage of an organization. Further, most of researches on supplier selection criteria and selection model were done for the large textile and apparel export countries (India, the USA, Hongkong, Iran). Little has been published regarding Vietnamese textile and apparel industry whose export volume accounts for 2% of the global one. It is inappropriate for Vietnamese textile and apparel companies to use the supplier selection criteria and model of the above large countries because the selection of suppliers needs to be built on the specific purchasing context. Therefore, the purpose of this research is to study a multiple criteria supplier selection model for Vietnamese textile and apparel businesses to enhance their sourcing activities. In order to achieve this purpose, an integrated approach will be employed. Firstly, a qualitative approach in which a multiple case study design with expert interviews was utilized to have an in-depth understanding about supplier selection situation of the Vietnamese textile and apparel industry. Next, a prequestionnaire was built and sent to some practitioners and experts for their revision. Then, a pilot survey of 31 T&A companies with numerous statistical tests was conducted to validate the questionnaire. After that, an official study of 282 respondents was conducted to determine supplier selection criteria which are best suited for T&A companies through exploratory factor analysis. Finally, a multiple criteria decision-making method, in which analytic network process (ANP) was chosen by basing on the characteristics of the T&A industry to select the best suppliers for three illustrated companies. In this research, it is found that the supplier selection problem can be solved in a timely and structural manner. In terms of theoretical contributions, the dissertation adds to the theory of sourcing the full set of selection criteria for the selection phase comprising Quality, Cost, Delivery, Service, Capability, Company’s image, Relationship, and Sourcing country. These criteria can be applied for the whole T&A industry ranging from CMT to OBM production method, from spinning companies to dying, weaving, and apparel companies. In terms of methodological contribution, the dissertation provides a detailed research model in which both qualitative and quantitative methods are applied, especially the use of ANP method can help close the gap of solving interrelations among criteria and sub-criteria in T&A industry. In addition to academic contributions, the dissertation also brings about administrative implications. The set of supplier selection criteria is a guideline for both T&A companies and T&A suppliers in their business. T&A companies can select capable suppliers for their production, which then minimize costs due to disruption, or uncontrollable risks. With the supplier selection model suggested by the dissertation, sourcing managers will no longer base on their intuition to select suppliers and can evaluate their suppliers frequently, which then can tighten the relationship with suppliers through their timely performance feedback to selected suppliers. For T&A suppliers, they can perfect themselves to meet T&A companies’ requirements, narrow the gap between them and high-ranked suppliers. For policy makers, they can help domestic auxiliary companies improve their capabilities and compete with foreign suppliers by publicizing the supplier selection model and providing financial incentives as material price is the most attentive criterion of T&A companies. Although the dissertation provides a helpful decision-making model, it also faces some limitations. Firstly, the sample size for quantitative approach is quite low. Secondly, variation tools for the proposed model are encouraged because the selection of suppliers is a complicated process. Thirdly, it would be an impressive research to apply the model into other industries.