Proposing a Dynamic Two-Step Approach for Designing Supplier Development Strategy

Supplier segmentation is the basis for the decisions of supply chain managers with the aim of managing and developing suppliers. The purpose of this study is to provide a dynamic approach to designing strategies for supplier development and management. In this research, a two-step approach has been used because the characteristics of purchased items play an important role in the design of these strategies. In the first stage, purchased items are classified according to purchasing portfolio matrix and proper criteria.Then, in the second stage suppliers of each purchased items group are segmented based on two dimensions such as willingness and capabilities. Finally, for each segment of suppliers in each class of purchased items, we provide suitable strategies for supplier development and management. In this work, we used the Delphi method on order to select the best criteria. Then, the criteria weight are determined using Best-Worst method. In the following, the purchased items and suppliers are positioned using MADM method (PROMETHEE). We tested this method for suppliers in a steel company, and the results are explained.