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A comprehensive supply chain management project

selection framework under fuzzy environment


Chun-Chin Wei
a,
*
, Gin-Shuh Liang
b
, Mao-Jiun J. Wang
c
a
Department of Industrial Engineering and Management, Ching Yun University, Jungli 320, Taiwan, ROC
b
Department of Shipping and Transportation Management, National Taiwan Ocean University, Keelung 200, Taiwan, ROC
c
Department of Industrial Engineering and Engineering Management, National Tsing Hua University, Hsinchu 300, Taiwan, ROC
Abstract
Many companies make considerable eorts in implementing supply chain management (SCM) systems to increase their competitive-
ness. However, how to select an adequate SCM project remains a major concern. This study presents a comprehensive framework with
three main phases to select an adequate SCM project that incorporates the strategies and operating routines of a supply chain, including
strategic objective analysis phase, system analysis phase, and group decision-making phase. Fuzzy set theory is adopted to resolve the
ambiguities involved in assessing SCM alternatives and aggregating the linguistic evaluations. The proposed framework can facilitate the
complex SCM selection process and consolidate eorts to enhance group decision-making process. A real case demonstrates the eec-
tiveness of applying the proposed framework.
2007 Elsevier Ltd and IPMA. All rights reserved.
Keywords: Design and appraisal; Information technology; Supply chain management; Fuzzy set theory; Group decision making
1. Introduction
Supply chain management involves coordinating all
activities associated with goods and information ows
from raw materials sourcing to product delivery and,
nally, to the end customers [1]. A supply chain manage-
ment (SCM) system can realize the collaboration of dier-
ent stages within a supply chain and provide real-time
analytical capabilities to produce planning solutions and
executing tasks of the supply chain [2]. The system incorpo-
rates numerous modules of supply chain planning and exe-
cution, e.g., supply chain network conguration, demand
planning, manufacturing planning and scheduling, distri-
bution planning, transportation management, inventory
and warehouse management, and supply chain event man-
agement, etc. Today, increasing number of companies
implement SCM systems to enhance the transparency of
their supply chain and share information with the supply
chain members in a timely manner.
A successful SCM implementation project involves
selecting a suitable SCM system and a cooperative SCM
system vendor, implementing the selected system, manag-
ing the supply chain member relationships, and examining
the practicality of the system. As a SCM system becomes
more organizationally encompassing, so that its selection
is complicated in nature rather than just traditional infor-
mation system (IS) selection [3]. The supply chain integra-
tion and collaboration is signicantly linked to the
development of more eective and longer-term relation-
ships among the members of the whole supply chain [4].
However, many companies rushed to install their SCM
projects without understanding the business implications
clearly and considering whether the system will match
the overall business goals and strategies. Consequently,
either the SCM project will fail or the system will weaken
if the logic of the system may conict with the logic and
objectives of the business. Davenport [5] emphasized the
0263-7863/$30.00 2007 Elsevier Ltd and IPMA. All rights reserved.
doi:10.1016/j.ijproman.2007.01.010
*
Corresponding author. Tel.: +886 3 4581196; fax: +886 3 4683298.
E-mail address: d887801@cyu.edu.tw (C.-C. Wei).
www.elsevier.com/locate/ijproman
International Journal of Project Management 25 (2007) 627636
INTERNATIONAL JOURNAL OF
PROJECT
MANAGEMENT
technical factors are not the main reason enterprise infor-
mation systems fail, however, the biggest problem are
business problems. Companies need to reconcile the tech-
nological imperatives of the SCM projects with the busi-
ness needs.
Several methods have been proposed for selecting an
adequate SCM or other IS project, e.g. scoring [6] and
ranking methods [7]. Mathematical optimization methods
such as goal programming, 01 programming, and non-lin-
ear programming methods are also applied to resource
optimization for selecting an IS. Santhanam and Kyparisis
[8] presented a non-linear programming model to optimize
resource allocation. It considered the interdependencies of
resources related to the assessment indicators. Lee and Kim
[9] adopted the analytic network process (ANP) to 01 goal
programming model to choose an appropriate IS. Talluri
[10] categorized SCM systems into three domains, i.e., stra-
tegic, tactical, and operational planning systems, and then
created a 01 goal programming model to select the SCM
systems for optimally combining the three domains. How-
ever, these mathematical programming methods do not
contain sucient attributes that are not quantiable.
Hence, the attributes are only restricted to nancial or
quantitative factors, such as costs, benets, and time fac-
tors [3].
To avoid addicting to the quantitative calculation,
some researchers and practitioners have been calling for
the use of techniques that focused on case studies, explor-
atory method, and meta-methodology [11,12]. Addition-
ally, strategic discussions of eective internal and
external supply chain management play a very important
role in constructing the supply chain model and business
model. For example, Fisher [13] oered a framework to
help managers to understand the nature of the demand
for their products and devise the supply chain that can
best satisfy that demand. Lambert and Cooper [14] cited
some strategic issues in supply chain management and
presented a conceptual framework of supply chain man-
agement, including supply chain network structure, supply
chain business processes, types of business process links,
and the management components. Lin et al. [15] proposed
a methodology based on the supply chain operations ref-
erenced (SCOR) Model to help companies to analyze
and design their supply chain operation models. Strategic
explorations are helpful to clarify the vague business envi-
ronment or situation and contribute some critical evalua-
tion guides and attributes in the SCM project selection
process.
Generally, a SCM system selection is a group multi-
ple-attribute decision-making (MADM) problem, in
which, some measures are not easily quantiable since
an individual judgment is often vague and dicult to
quantify with exact numerical values. Decision makers
often are used to express their ratings in natural lan-
guage rather than in numbers [16]. Additionally, the
requirements of an enterprise may not be exact, but
can be described in fuzzy terms. Erol and Ferrell [17]
used fuzzy quality function deployment (QFD) to con-
vert qualitative information into quantitative parameters
and then combines the data with other quantitative data
to parameterize a multi-objective mathematical program-
ming model. Nassimbeni and Battain [18] proposed a
fuzzy expert system prototype able to manage the sup-
plier evaluation process and to oer a measurement of
the contribution of the suppliers in new product develop-
ment using fuzzy logic method. Thus, a fuzzy multiple-
attribute decision-making method (FMADM) is highly
eective in integrating linguistic assessments and weights
to evaluate SCM systems.
This study presents a comprehensive framework with
three main phases to select an adequate SCM system,
including strategic objective analysis phase, system analysis
phase, and group decision-making evaluation phase.
Besides it suggests four critical attribute types, i.e., strat-
egy, project, system, and vendor factors. A FMADM is uti-
lized to deal with the complex group evaluation process
and the aggregation of various decision makers opinions.
A fuzzy SCM suitability index is used to account for the
ambiguities involved in evaluating the appropriateness of
the SCM alternatives and the weightings of the attributes.
Additionally, a real case is illustrated to demonstrate the
proposed framework.
2. Procedure for selecting an adequate SCM project
This study presents a comprehensive SCM project selec-
tion framework, including the strategy analysis phase, the
system analysis phase, and the group decision-making eval-
uation phase. By employing the proposed framework, the
fuzzy assessments of decision makers with various attri-
butes can be incorporated in the aggregation process. The
stepwise procedure is described sketchily as follows.
Step 1. Form a project team and recognize the character-
istics of the supply chain.
Step 2. Develop the strategic objectives of the supply
chain.
Step 3. Formulate the network of the supply chain.
Step 4. Select the appropriate attributes and structure
the attribute hierarchy.
Step 5. Filter out unqualied alternatives by asking spe-
cic questions, which are formulated according
to the main requirements.
Step 6. Interview SCM system vendors and examine the
proposals and prototypes of these vendors.
Step 7. Assign weights to the attributes and ratings to
the SCM alternatives using linguistic terms.
Step 8. Aggregate the assessments to determine the nal
fuzzy SCM suitability.
Step 9. Adopt the fuzzy integral value ranking method
to rank alternatives.
Step 10. Select the most suitable SCM project with the
maximum fuzzy integral value.
628 C.-C. Wei et al. / International Journal of Project Management 25 (2007) 627636
Fig. 1 displays the comprehensive framework of the pro-
posed method. The details of each step are presented below.
2.1. The strategy analysis phase
2.1.1. Recognize the characteristics of the supply chain
The technical challenges, however great, are not the
main reason IS project failed. The biggest problems are
business problems. Companies fail to reconcile the techno-
logical imperatives of the IS with the business needs of the
enterprise itself. If a company rushes to install an IS with-
out rst having a clear understanding of the business impli-
cations, the dream of integration can quickly turn into a
nightmare. The primary issue at the strategic level is to rec-
ognize the characteristics of the supply chain, like industry
characteristics, client needs, product life cycles, product
positions, customer segments, procurement features, man-
ufacturing strategies, etc. [19]. In order to highlight the
strategic drivers of the supply chain, other crucial concerns
are also widely collected, including the information, envi-
ronmental trends, and obstacles of current supply chain.
Meanwhile, the company must recognize its current posi-
tions and inuence in the entire supply chain. Such percep-
tions will help the project team in clarifying the scope of
business process integration in the supply chain link that
the company can handle.
2.1.2. Develop the strategic objectives of the supply chain
Due to the complexity of the supply chain and the huge
risk of a SCM implementation project, it is far better to
spend a lot of eort understanding the objectives and
requirements. Three steps can be adopted in analyzing
the elements of the supply chain and identifying the objec-
tives to achieve strategy conformity [20]:
(1) Understanding the customers: dierent customers have
dierent customer demands, i.e., quantity in each lot,
response time that customers are willing to tolerate,
service level required, diversity of the product line,
and product price [13].
(2) Understanding the supply chain: the company should
clarify the capabilities of the supply chain which
can satisfy the targeted customer segments, i.e., the
ability of lead time meeting, diverse product han-
dling, customer service level supporting, and the
inventory control ability.
(3) Achieving strategic t: aligning the customer require-
ments and the supply chain capabilities to ensure that
all functionalities in the supply chain have consistent
strategies that support the competitive ones.
Additionally, other factors must be deliberated in clarifying
the supply chain features, including the cooperativeness of
major suppliers and customers, competitiveness of the
industry, and bargaining power of the company, etc.
2.1.3. Formulate the structure of the supply chain
For decomposing and modeling the scope of the SCM
project, the project team needs to select the members of
the supply chain and organize the structure of the supply
chain. To fully exploit the utmost benets of these links,
the project team should clarify the unique characteristics
of each interconnected link. The method proposed by Lam-
bert and Cooper [14] is modied to organize the structure
of a supply chain.
(1) Selecting the members of the supply chain. When con-
structing the supply chain network, identifying who
the members of the supply chain are is a prerequisite.
The project team should identify the members of
the supply chain and allocate resources to the key
members based on their core competence and
contributions.
(2) Establishing the structure of the supply chain. To com-
promise the dilemma between the complexity of sup-
ply chain model and the practicing applicability of
the SCM system, the project team should choose
the suitable scope of partnerships for particular sup-
ply chain links. Two architectural dimensions, hori-
zontal and vertical structures, exist in the supply
chain network. The horizontal dimension provides
the number of tiers across the supply chain. Corre-
spondingly, the vertical structure refers to the number
of suppliers and customers represented within each
Form a project team and identify the characteristics of the supply chain
Develop the strategic objectives of the supply chain
Screen unqualified alternatives
Establish the proper attributes and attribute hierarchy
Examine and evaluate the
proposals
Probe and test the prototypes
Evaluate the SCM projects with each attribute
Calculate the agreement index of each decision makers assessment
Decision convergence?
Aggregate the assessments and calculate the fuzzy SCM suitability
Rank the final fuzzy SCM suitability
Select the SCM project with maximum final ranking value
Validate?
T
h
e

s
t
r
a
t
e
g
y

a
n
a
l
y
s
i
s

T
h
e

s
y
s
t
e
m

a
n
a
l
y
s
i
s

p
h
a
s
e

T
h
e

g
r
o
u
p

d
e
c
i
s
i
o
n
-
m
a
k
i
n
g
e
v
a
l
u
a
t
i
o
n

p
h
a
s
e

Yes
Yes
No
No
Structure the network of the supply chain
Fig. 1. Comprehensive SCM project selection procedure.
C.-C. Wei et al. / International Journal of Project Management 25 (2007) 627636 629
tier. The project team needs to examine the key
aspects of the supply chain and identify the crucial
boundaries of the supply chain model.
(3) Recognizing the characteristics of supply chain links.
According to supply chain strategic objectives and
linkage patterns, the project team can conrm the
requirements of major processes in the supply chain
model, which will be converted into the specications
of SCM system fundamentals when developing and
evaluating an adequate SCM project.
2.2. The system analysis phase
2.2.1. Select the appropriate attributes and structure
the attribute hierarchy
Proper attributes guide to fulll key requirements of a
company such as strategic concerns and operational needs
for assessing a SCM project and mapping out the project
characteristics. Several researchers and practitioners claim
that both quantitative and qualitative attributes that can
satisfy the operations under the strategies and goals of
the company should be involved [2,811,21]. This study
categorizes SCM project selection attributes into four
categories:
(1) Strategy factors: attributes that concern with the
strategy objectives of the supply chain, for example,
customer demand support, supply chain capability,
domain knowledge support, and supply chain model
design.
(2) Project factors: attributes involved in SCM project
management, such as total cost, implementation time,
expected benet, and project risks.
(3) System factors: features of the SCM software system,
including system functionality, system exibility, and
system integration.
(4) Vendor factors: attributes that pertain to vendors, like
vendors ability, implementation and maintenance
ability, consulting service, and vendors reputation.
The project team can make reference to these attributes
of prior studies. However, they had better develop their
own critical objectives structure in Step 1 and 2 and select
the appropriate attributes, which are measurable and be
extracted from their characteristics and strategic objectives
of the supply chain, based on the current business environ-
ment and the requirements of the company.
2.2.2. Eliminate unqualied alternatives
A couple of constraints exist inherently when selecting
an appropriate SCM project. Major SCM project require-
ments and project characteristics can be converted into a
specic questionnaire or checklist when surveying various
SCM systems and vendors. The potential vendors are
inquired to provide further information in response to
these questions. By reviewing the information, unqualied
vendors are eliminated.
2.2.3. Hold interview meetings and examine the proposals
and prototypes
After screening, the vendors that remain on the short list
are asked to provide detailed proposals for requirements.
The team must prepare the schedule, scenarios, and ques-
tions for the vendors before the interviews. During the
interviews, the project team may ask the vendors to gener-
ate a prototype for review. From the prototype production
and investigation, the project team will have better under-
standing about the systems user interface and vendors
planning skills and execution capabilities. Notably, the rep-
resentatives of user departments in the project team should
provide the knowledge of their unique processes to exam-
ine the vendors demonstrations.
2.3. The group decision-making evaluation phase
2.3.1. Assign weights to the attributes and ratings
to the SCM alternatives using linguistic terms
The weights assigned to each attribute can be adjusted
according to the specic concerns of the company. Each
attribute weight can be determined by directly assigning
linguistic expressions. Decision makers use a set of ve lin-
guistic terms in a weighting set, W, to describe the weight
of each attribute, W = {VL, L, M, H, VH} where
VL = Very Low, L = Low, M = Medium, H = High, and
VH = Very High.
Besides, obtaining exact numbers to represent the rat-
ings of attributes, even quantitative attributes, are usually
dicult and expensive; the linguistic representations are
preferable in practice. Assume that a set of linguistic terms,
S = {VP, P, F, G, VG}, where VP = Very Poor, P = Poor,
F = Fair, G = Good, and VG = Very Good, is used to rate
the alternatives with respect to each attribute. Table 1 spec-
ies the triangular fuzzy numbers (TFNs) for these linguis-
tic weights and ratings. If a decision maker does not agree
with the assumed numerical approximation system, he can
dene his own ratings and the corresponding TFNs to
express the individual perception of the linguistic terms.
To avoid the falsied conclusion drawn from disparate
assessments of decision makers, this study recommends
using the Kaufmann and Guptas fuzzy agreement index
[22] to converge their inputs. Let

R
t
ijk
(i = 1, 2, . . ., l;
j = 1, 2, . . ., m; k = 1, 2, . . ., n) be the linguistic rating of
SCM project P
i
by decision maker D
k
for attribute x
j
of
the iteration t using the set S. Dene the mean of these indi-
vidual ratings of the iteration t to be

R
t
ij
.
Table 1
Linguistic variables describing weights of attributes and values of ratings
Weight Rating TFN
Very Low (VL) Very Poor (VP) (0, 0, 0.3)
Low (L) Poor (P) (0, 0.3, 0.5)
Medium (M) Fair (F) (0.2, 0.5, 0.8)
High (H) Good (G) (0.5, 0.7, 1.0)
Very High (VH) Very Good (VG) (0.7, 1.0, 1.0)
630 C.-C. Wei et al. / International Journal of Project Management 25 (2007) 627636

R
t
ij
1=n

R
t
ij1


R
t
ij2


R
t
ijn
;
i 1; . . . ; l; j 1; . . . ; m 1
The agreement index of

R
t
ij
with regard to

R
t
ijk
is
I

R
t
ij
;

R
t
ijk
_ _

_
x
min u
~
R
t
ij
x; u
~
R
t
ijk
x
_ _ _ _
dx
_
x
u
~
R
t
ij
x dx
2
Calculate the agreement index to determine the agree-
ment level of each individual evaluation with that of the
entire group. Suppose the mean of all individual ratings

R
t
ij
a
ij
; b
ij
; c
ij
. Compare (a
ij
, b
ij
, c
ij
) with the sheaf of
each individual rating (a
ijk
, b
ijk
, c
ijk
) of decision maker D
k
.
That is, the comparison yields the divergence (a
ij
a
ijk
,
b
ij
b
ijk
, c
ij
c
ijk
). The divergence and agreement index
information are given to each decision maker. If the agree-
ment index of an individual does not reach a certain level,
then decision makers should further discuss and he can
reconsider his previous rating to give a new TFN. This pro-
cess is continued until the agreement indices of all decision
makers attain the target threshold value [23]. Of course, the
number of such iteration phases can be limited a priori
assumption. Many variations of the procedure are possible.
For example, the decision makers can be advised not to
increase the divergence, but this is only a suggestion
because a decision maker must give his own unbiased
opinion.
2.3.2. Aggregate the assessments and calculate the fuzzy
SCM suitability index
Let

R
ijk
a
ijk
; b
ijk
; c
ijk
(i = 1, . . ., l, j = 1, . . ., m,
k = 1, . . ., n) be the linguistic rating of SCM project P
i
by
decision maker D
k
for attribute x
j
using the set S during
the nal fuzzy agreement index iteration. And let

W
jk
p
jk
; q
jk
; r
jk
be the linguistic weighting given to attri-
bute x
j
by decision maker D
k
using the set W.
Fuzzy analytic hierarchy process (FAHP) is a good
method to solve a MADM problem. However, the di-
culty arises because too many attributes lead to numerous
paired comparisons in FAHP and causes an inecient pro-
cess [16]. In this paper, a mean operator is used to aggre-
gate the ratings of the decision makers. The reason of
using fuzzy weighted average operation is that it is a con-
ventional aggregation method and it is easy to understand
by managers [24]. Dene

R
ij
1=n

R
ij1


R
ij2


R
ijn
;
i 1; . . . ; l; j 1; . . . ; m 3
and

W
j
1=n

W
j1


W
j2


W
jn
; j 1; . . . ; m 4
where

R
ij
is the average fuzzy suitability rating of SCM
project P
i
under attribute x
j
, and

W
j
is the average weight
of attribute x
j
. Based on the extension principle,

R
ij
and

W
j
are both TFNs. That is, let
a
ij

n
k1
a
ijk
=n; b
ij

n
k1
b
ijk
=n; c
ij

n
k1
c
ijk
=n;
p
j

n
k1
p
jk
=n; q
j

n
k1
q
jk
=n; r
j

n
k1
r
jk
=n;
then

R
ij
a
ij
; b
ij
; c
ij
and

W
j
p
j
; q
j
; r
j
.
Furthermore,

R
ij
and

W
j
can be aggregated by averag-
ing the products of the attribute ratings and the corre-
sponding weights. The nal fuzzy SCM suitability,

R
i
, of
SCM project P
i
can be obtained by a standard fuzzy
operation.

R
i
1=m

R
i1


W
1

R
i2


W
2

R
im


W
m
;
i 1; . . . ; l 5
where

R
i
is no longer a TFN. By the extension principle,

R
i
is a fuzzy number with the membership function:
u~
Ri
x
h
i1
h
2
i1
x s
i
=d
i1

1=2
; s
i
6 x 6 v
i
;
h
i2
h
2
i2
x z
i
=e
i1

1=2
; v
i
6 x 6 z
i
;
0; otherwise;
_

_
6
where
d
i1

m
j1
b
ij
a
ij
q
j
p
j
=m;
d
i2

m
j1
a
ij
q
j
p
j
p
j
b
ij
a
ij
=m;
e
i1

m
j1
c
ij
b
ij
r
j
q
j
=m;
e
i2

m
j1
r
j
b
ij
c
ij
c
ij
q
j
r
j
=m;
h
i1
d
i2
=2d
i1
; h
i2
e
i2
=2e
i1
;
s
i

m
j1
a
ij
p
j
=m; v
i

m
j1
b
ij
q
j
=m;
z
i

m
j1
c
ij
r
j
=m:
The fuzzy number

R
i
can be represented as,

R
i
s
i
; v
i
; z
i
; h
i1
; d
i1
; h
i2
; e
i1
; i 1; 2; . . . ; l:
2.3.3. Rank the nal fuzzy suitability
Selecting an optimal SCM project depends on ranking
the nal fuzzy suitability. Many fuzzy ranking methods
have been proposed [2528]. However, current fuzzy rank-
ing methods have limitations and none can be applied to all
situations. Wang and Kerre [29] proposed nine axioms
which serve as the reasonable properties to gure out the
rationality of 12 fuzzy ranking methods associated with
16 indices. The fuzzy ranking method with integral value
proposed by Liou and Wang [28] satises eight the axioms.
They concluded that Liou and Wangs method are rela-
tively reasonable for ordering of fuzzy numbers. For sim-
plicity and eectiveness in problem solving, the fuzzy
integral value ranking method was applied to rank the nal
fuzzy suitability of SCM alternatives.
The membership function of

R
i
as u~
Ri
x is divided into
two parts, u
L
~
Ri
x and u
R
~
Ri
x, by the highest membership
value 1. That is,
C.-C. Wei et al. / International Journal of Project Management 25 (2007) 627636 631
u
L
~
Ri
x h
i1
h
2
i1
x s
i
=d
i1

1=2
; s
i
6 x 6 v
i
;
i 1; . . . ; l
and
u
R
~
Ri
x h
i2
h
2
i2
x z
i
=e
i1

1=2
; v
i
6 x 6 z
i
;
i 1; . . . ; l:
Assume that g
L
~
Ri
y and g
R
~
Ri
y are the inverse functions
of u
L
~
Ri
x and u
R
~
Ri
x, respectively. Then,
g
L
~
Ri
y d
i1
y
2
2h
i1
d
i1
y s
i
and
g
R
~
Ri
y e
i1
y
2
2e
i1
h
i2
y z
i
; y 2 0; 1.
Dene the left integral value of

R
i
as,
I
L

R
i

_
1
0
g
L
~
Ri
ydy d
i1
=3 h
i1
d
i1
s
i
; 7
the right integral value of

R
i
as,
I
R

R
i

_
1
0
g
R
~
Ri
ydy e
i1
=3 e
i1
h
i2
z
i
; 8
and the total integral value of

R
i
, including an index of
optimism, h, as,
I
h
T

R
i
hI
R

R
i
1 hI
L

R
i
; h 2 0; 1;
i 1; 2; . . . ; l: 9
According to the ranking method, index h indicates the de-
gree of optimism of the decision makers. A larger h repre-
sents a higher degree of optimism. All decision makers can
weight their attitudes by setting the index h.
However, it is reasonable to assess the value of optimism
index h through the evaluation data (i.e., the ratings for
alternatives under all attributes and the weights assigned
to the attributes) by the decision makers [30]. Let

R a; b; c be a normal TFN. Dene c = (b a)/(c a)


(0 6 c 6 1) as the optimism index of an individual decision
maker who gives the rating

R. Based on this concept, we
can develop a new total optimism index h with the evalua-
tion data of all decision makers.
h

l
i1

m
j1

n
k1
b
ijk
a
ijk
=c
ijk
a
ijk

m
j1

n
k1
q
jk
p
jk
=r
jk
p
jk

_
=l mnmn 10
If h > 0.5, the attitude of the decision makers is optimis-
tic. If h < 0.5, the attitude of the decision makers is
pessimistic. If h = 0.5, then the attitude of the decision
makers is neutral.
2.3.4. Select the most suitable SCM project
Due to the preferences of the decision makers and the
environment of the company are not always stable, a
method that considers various trade-os among alterna-
tives is necessary for making the nal decision. By manip-
ulating the value of h into the model, we can analyze the
change in the nal outcomes. Finally, the project team
can select the optimal SCM project with the maximum
total integral ranking value.
3. Practical case
The proposed framework was applied to select a SCM
project at a steel mill in Taiwan. This integrated steel mill
produces plates, bars, wire rods, semi-nished products,
and other steel products. After implementing the ERP sys-
tem, the top management planned to enhance the eective-
ness of its global supply chain by implementing a SCM
system. The process of selecting the optimal SCM project
is described below.
Step 1. A project team involved seven senior managers
was formed. Representatives of user departments,
information experts and consultants were also
invited to participate in the team. The team gath-
ered information such as problems of the existing
supply chain, industry characteristics, changes of
the business environment, and client demands to
recognize the characteristics of the supply chain
and identify the scope of this project.
Step 2. Because the steel industry is based on make-to-
stock manufacturing principle, stock and cost
are the most critical considerations. After some
discussions, the strategic objectives of their sup-
ply chain were dened as follows:
(1) Supply the market demands at the lowest
price under meeting quality requirements;
(2) Minimize the inventory in the entire supply
chain to reduce the total holding cost;
(3) Maximize productivity and turnover rate of
equipments to lower the operating cost;
(4) Select the adequate suppliers based on cost
and quality;
(5) Adopt the low cost logistics technologies;
(6) Develop new products under the minimizing
cost constraint.
Step 3. Based on the importance and priority to the steel
mill, suitable supply chain network members
were selected for consideration. As space is lim-
ited, we do not discuss the supply chain member
selection process here. The major links were the
tier-1 key direct suppliers and clients, warehous-
ing vendors and distributors in the supply chain.
Some crucial operations of the other tiers,
including indirect suppliers, customers and orga-
nizations in the supply chain, formed the moni-
toring links.
Step 4. The strategic objectives of the supply chain and
the SCM systems requirements were converted
into the evaluation attributes, and then to formu-
late the hierarchical structure, as shown in Fig. 2.
It may be impractical to make evaluations
among the SCM projects by decision makers
632 C.-C. Wei et al. / International Journal of Project Management 25 (2007) 627636
with respect to every detailed dimension in level 4
of the attribute hierarchy in Fig. 2. The represen-
tatives from user departments formed dierent
research groups to examine the collected data
of SCM alternatives according to their knowl-
edge and experience. For example, the nance
and purchase members joined a cost research
group to provide nancial data, and the MIS
members examined the functionality, exibility,
and reliability of each SCM system as well as
the technical ability of each vendor. Research
groups then presented their ndings to the pro-
ject team for discussion.
Step 5. Information about the SCM systems and ven-
dors were widely collected from professional
magazines, exhibitions, the Internet, and year-
books. The selection of qualied vendors was
based on the systems specic questions. Table
2 lists some of the questions. After screening,
three vendors P
1
, P
2
, and P
3
, were remained for
further evaluation.
Step 6. The three remaining SCM system vendors were
asked to provide detailed proposals. Interviews
and demonstrations were scheduled for each ven-
dor. User representatives conducted unit tests to
evaluate the system feasibility.
Step 7. Each research group examined whether the pro-
posals meet the system specications. The groups
also provided some critical processes to the ven-
dors for prototype making. Each decision maker
then assessed the 15 main attributes in Fig. 2 of
the three SCM projects based on the group anal-
ysis reports (Sub-attributes in Fig. 2) and their
subjective judgments. Based on the attribute
hierarchy, the decision maker D
k
assigned
weighting

W
jk
to the main attribute x
j
from the
Main attributes Sub-attributes
Attributes
of SCM
evaluation
Project
factors
System
factors
Vendor
factors
Strategy
factors
x9. Function &
technology
x1. Customer demand support
x3. Domain
knowledge
x5. Total costs
x6. Implementing
time
x7. Benefits
x8. Risks
x10. System
flexibility
x11. System
integration
x13. Implementation
& Maintenance
x12. Vendors
ability
x15. Vendors
reputation
x14. Consulting
service
x51. Basic system cost
x52. Customization cost
x53. Consultant cost
x54. Infrastructures cost
x55. Maintenance cost
x31. Industry specific knowledge
x32. Pertinent industry experience
x91. Scalability
x92. Functionality
x93. User friendliness
x94. Reliability & quality
x10 1. Business process re-building
x10 2. Ease of customization
x10 3. Platform neutrality
x11 1. Application integration
x11 2. SCM modules integration
x13 1. Implementation ability
x13 2. Maintenance ability
x12 2. R&D technology
x12 3. Training & Documentation
x12 4. Service ability
x14 1. Consultant experience
x14 2. Consultant cooperation
x14 3. Input resources density
x15 1. Financial condition
x15 2. Credentials & reputation
x2. Supply chain capability
x95. Security
x4. Supply chain model design
x12 1. Resource & partnership program
Fig. 2. SCM project evaluation attribute hierarchy.
C.-C. Wei et al. / International Journal of Project Management 25 (2007) 627636 633
linguistic term set W. Table 3 presents the assign-
ments. By using Eq. (4), the aggregated weighting

W
j
of each attribute can be obtained.
The linguistic rating

R
ijk
of each decision maker
D
k
vs. SCM project P
i
based on main attribute
x
j
has been assessed. The evaluation started with
calculating the agreement index of each individ-
ual assessment (Eq. (2)). Set agreement index
I

R
t
ij
; R
t
ijk
P0:5 of the iteration t, for consider-
ing the group consensus.
Step 8. Table 4 shows the evaluation of the SCM project
P
1
according to main attribute x
j
. Using Eq. (3),
the average fuzzy rating of SCM project P
i
under
attribute x
j
,

R
ij
, was obtained. The value of

R
ij
and its corresponding weight

W
j
were aggregated
to yield the nal fuzzy SCM suitability by Eq.
(5). Table 5 gives the results of the three SCM
alternatives. Fig. 3 shows the shape of the mem-
bership functions of the three fuzzy SCM suit-
Table 2
Examples of screening questions
Items Questions
Domain knowledge 1. What is the venders target domain and market?
2. Does it match to our business needs?
3. How many pertinent industry cases does the vendor conduct?
Cost vs. budget 1. What is the total cost of the SCM modules?
2. Can we accept the dierence between the cost and budget?
Scalability 1. Is the SCM system too complex, or is it a good t?
2. Does it t our requirements, or is it overqualied?
Implementation methodology 1. What is the recommended approach to implement the SCM system?
2. Is it feasible and simple?
3. How long does it take?
Requirement covered 1. Does the SCM system cover the operations of supply chain?
2. Do the system and its modules cover all requirements?
3. Does the system ease to modify and customize?
Information technology 1. Does the vendor provide other information systems, such as, DW, CRM, and EC?
2. Can the system support the operations across organizations?
3. What database and hardware can be supported by the system?
4. Does the system provide a good Internet support?
Consulting service 1. Does the vendor provide consulting services?
2. Does it cooperate with another consultant company?
Service maintenance 1. Who supports upgrades and maintenance? The software supplier or the reseller?
2. Does the vendor have any local service point or a branch company?
Financial consideration 1. How did the vendor perform nancially over the last two years?
2. What is its current nancial forecast?
3. Does it have any venture investment or warning signs?
Table 3
Weights of main attributes given by decision makers
Main attributes Decision makers
D
1
D
2
D
3
D
4
D
5
D
6
D
7
x
1
VH VH VH VH VH VH VH
x
2
VH VH VH VH VH VH VH
x
3
VH VH VH H VH VH VH
x
4
VH VH VH VH VH VH VH
x
5
VH VH H VH H VH VH
x
6
VH VH H VH VH VH VH
x
7
VH VH VH VH VH VH VH
x
8
VH VH VH H VH H H
x
9
VH VH VH VH VH VH VH
x
10
VH VH VH H VH VH H
x
11
VH H VH VH VH VH VH
x
12
VH VH VH VH VH VH VH
x
13
VH H VH VH VH VH H
x
14
VH H H VH VH VH H
x
15
VH H H VH VH H H
Table 4
Decision makers evaluation of SCM project P
1
under main attributes
Main attributes Decision makers
D
1
D
2
D
3
D
4
D
5
D
6
D
7
x
1
VG G VG VG VG G VG
x
2
VG VG VG VG VG VG VG
x
3
VG G VG VG VG G VG
x
4
G VG G VG VG G VG
x
5
G G G G F G F
x
6
VG G VG G VG G VG
x
7
VG VG VG VG VG VG VG
x
8
VG G VG G VG VG G
x
9
VG VG VG G VG VG VG
x
10
VG G VG VG VG VG G
x
11
VG G VG G VG VG VG
x
12
VG G VG G VG VG VG
x
13
VG VG VG VG VG VG VG
x
14
VG G VG G G VG VG
x
15
VG VG VG VG VG VG VG
634 C.-C. Wei et al. / International Journal of Project Management 25 (2007) 627636
abilities. In this case, it is easy to rank the three
fuzzy SCM suitabilities intuitively from Fig. 3.
Then, the ranking order was P
1
, P
2
, and P
3
.
Step 9. For proving further, using the fuzzy integral
value ranking method, the ranking of each
SCM projects nal fuzzy SCM suitability was
obtained. The fth row of Table 5 summarizes
the results with h = 0.5 by using Eqs. (7)(9).
In addition, we calculated the value of h using the
ratings for the alternatives and the weights to the
attributes. We obtained a new optimism index
h = 0.5871 by Eq. (10). The last row of Table 5
presents the results with h = 0.5871.
Step 10. The ranking order was P
1
, P
2
, and P
3
. The most
suitable SCM project was P
1
. Further, conduct-
ing sensitivity analysis by manipulating the index
h, the ranking of the alternatives was found to be
unchanged. The project team thus recommended
SCM project P
1
as the most suitable selection for
the company.
4. Conclusions
A SCM project selection problem is more important
and complex for an enterprise today. This study presents
a three phase framework to select the optimal SCM pro-
ject under fuzzy environment, including the strategic
objective analysis, the system analysis, and the group
decision-making evaluation. In the strategic objective
analysis phase, the proposed methodology can help the
project team to recognize the features of their supply
chain, identify the strategic objectives of supply chain
to align with the competitive strategies of the enterprise,
and formulate the network of the supply chain. The
methodology can ensure that the evaluating process is
aligned with the enterprises competitive strategies and
goals. In the system analysis phase, some critical attri-
butes can be developed according to the strategic objec-
tive concerns and operational needs. An attribute
hierarchy including strategy, project, system, and vendor
factors has been organized for assessing the SCM alter-
natives. Additionally, the model is exible enough to
incorporate extra attributes in the evaluation. Examining
the proposals and prototypes made by the vendors are
also suggested to analyze the functionalities, work ows,
and user interfaces of the systems. Since humans are dif-
cult in giving quantitative ratings exactly, where they
are comparatively ecient in linguistic expressions. In
the group decision-making phase, the concepts of fuzzy
numbers and linguistic variables are applied to assess
the suitability of SCM alternatives. In addition, an inte-
gration model that uses the fuzzy operation and fuzzy
integral ranking method was proposed to obtain a nal
fuzzy suitability index.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.376 0.425 0.475 0.525 0.575 0.625 0.675 0.725 0.775 0.825 0.875 0.925 0.975
x

P1
P2
P3
Fig. 3. Membership functions of three SCM alternatives.
Table 5
Evaluation results
SCM project P
1
P
2
P
3

R
i
a
(0.42,0.86,1.00;2.34,0.08;13.26,0.0059) (0.39,0.80,1.00;2.36,0.07;11.04,0.01) (0.38,0.77,0.99;2.32,0.07;10.33,0.01)
I
L

R
i
0.6297 0.5855 0.5612
I
R

R
i
0.9281 0.8966 0.8771
I
0:5
T

R
i
0.7789 0.7410 0.7192
I
0:5871
T

R
i
0.8049 0.7681 0.7467
a

R
i
s
i
; v
i
; z
i
; h
i1
; d
i1
; h
i2
; e
i1
; i 1; 2; 3
C.-C. Wei et al. / International Journal of Project Management 25 (2007) 627636 635
The proposed three phase framework is applicable to
other enterprise information system implementation pro-
ject, like Enterprise Resource Planning (ERP). However,
given the nature of system variations, some considerations
and information would be dierent. Readers can refer to
[31].
Comparing with the traditional practices, the proposed
framework has the following advantages:
(1) Managers can complete a complicated SCM system
selection process eciently by following the system-
atic procedure stepwise;
(2) The strategic objectives of a companys supply chain
are addressed. By aligning the supply chain objectives
with those of corporate competition strategies, the
streamlined supply chain is constructed to best t
the company needs;
(3) By easily understanding this framework, managers
can assess various attributes of the SCM system, par-
ticularly in an ill-dened situation, by using linguistic
terms in the evaluation.
(4) The fuzzy integral value ranking method can take
into consideration the decision makers degree of
optimism in advance based on the industrial environ-
ment. Or the decision makers can assess the value of
optimism index h through the evaluation data.
(5) The proposed model can exibly incorporate extra
attributes or decision makers in the evaluation. The
proposed framework can also accelerate the consen-
sus reaching among multiple decision makers.
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