Justification of coordinated supply chain in small and medium enterprises using analytic hierarchy process

Abstract

Small and medium enterprises (SMEs) play a critical role in the success of supply chains because in most of the situations they work as suppliers for bigger organisations. SMEs need a coordinated supply chain to face dynamic market requirements in terms of short product life cycle, less delivery lead time and continuous cost reduction. This paper tries to justify a coordinated supply chain in SMEs on the basis of major benefits of coordinated supply chain over a non-coordinated supply chain. The author has used analytic hierarchy process (AHP) for this purpose. Major benefits of coordinated supply chain are lead time reduction, agility in supply chain, delivery on time, inventory reduction, service reliability, cost reduction and accurate forecasting of data. By using AHP, global desirability index of coordinated and non-coordinated supply chain are calculated and compared.