How to use the evaluation of suppliers to develop the supply system.

During recent decades several studies have highlighted that the competitive advantage of large customer firms arises significantly from their ability to achieve a successful supply system through the adoption of effective tools and methodologies for evaluating suppliers. Nevertheless it emerges that a gap exists between a growing number of applications and the scarce empirical evidence of the practical usefulness of such applications. The purposes of this chapter is to provide a contribution to bridging this gap by illustrating and implementing an application of suppliers’ evaluation based on the Analytical Hierarchical Process (AHP) methodology. The evaluation tree of the AHP assures transparency and traceability, features that allow using it as a tool for strategic management of the supply system. The AHP evaluation tree provides relevant indications for the strategic decision that both customers and suppliers have to adopt to reinforce the supply system and their competitive position. Relevant issues arising from the application and managerial implications for both customer and suppliers are discussed. In particular, we underline how the AHP methodology is not only a tool for supplier evaluation but also a strategic management tool to develop the supply system.