IOSR Journal of Mechanical and Civil Engineering (IOSR-JMCE) e- ISSN: 2278-1684, p-ISSN : 2320–334X PP 81-89 www.iosrjournals.org National Conference on Contemporary Approaches in Mechanical, 81 | Page Automobile and Building sciences-2014 Karpaga Vinayaga College Of Engineering & Technology VENDOR SELECTION IN SUPPLYCHAIN MANAGEMENT USING ISM AND ANP B.Mohmed Fazil 1 , R.Kesavan 2 1 (Production Technology, PG Scholar, MIT Campus/ Anna univ ,Chennai/India.) 2 (Production Technology, Associate Professor, MIT Campus/ Anna univ ,Chennai/India.) ABSTRACT: A vendor, or a supplier, in a supply chain management is anyone who provides goods or services to a company. Thus, the raw materials required for the manufacture of a product will be provided by the supplier. These raw materials are processed to obtain the finished product by the manufacturer. The finished product will be sold to the customers. A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. The aims of this paper to identify the various risk factors in supply chain management, then to evaluate it using Interpretive Structural modelling and then the relationship between the factors is evaluated using Analytical Network process. Then the selection of best supplier is done using Analytical Network process. Keywords: Analytical Network Process, Interpretive Structural Modelling, Pairwise comparison matrix, Supplier selection, Supply Chain Management. I. INTRODUCTION 1.1 Supply Chain Network: A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. Supply Chain Management (SCM) was developed to express the need to integrate the key business processes, from end user through original suppliers. A vendor, or a supplier, in a supply chain management is anyone who provides goods or services to a company. Thus, the raw materials required for the manufacture of a product will be provided by the supplier. These raw materials are processed to obtain the finished product by the manufacturer. The finished product will be sold to the customers. (6) In today’s competitive business, buying firms increasing rely on their suppliers to deliver technologically advanced, defect-free products in a timely and cost-effective manner. If the supplier lacks in some of these areas, buying firms face the decision of whether to look for an alternative source of supply or to work with the same supplier and to remedy their shortcomings. Because of the uncertainty of locating a better source, and the high cost of searching and evaluating new suppliers, buying firms may engage in supplier development. (3) Manufacturing firms on the average spend over 50% of its revenues on purchasing inputs. Vendor selection and evaluation is one of the most critical activities. Selection of a wrong vendor or source could be enough to upset the company’s financial and operational position. Traditionally vendors are selected on their ability to meet the quality requirements, delivery schedule and the price offered. However, in modern management, one needs to consider many other factors with the aim of developing a long-term vendor relationship. (8) Vendors are considered as the best intangible assets of any organization. Basically, the selection process involves evaluation of different alternative vendors based on various criteria. 1.2. Supplier selection: Supplier selection is the process by which firms identify, evaluate, and contract with suppliers. The supplier selection process deploys a tremendous amount of a firm’s financial resources. In return, firms expect significant benefits from contracting with suppliers offering high value. Evaluation and selection of Suppliers is a typical multiple criteria decision making (MCDM) problem involving multiple criteria that can be both qualitative and quantitative. The selection process involves the identification of potential criteria and performance assessment of suppliers with reference to selected criteria thus necessitating a systematic approach or methodology.(12)