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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
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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