Choosing Supplier by Using Multi-Criteria Decision Analysis (MCDA) : A Case Study on Readymade Garments Industry in Bangladesh

Abstract

This study explores the issue of supplier selection in a dynamic and competitive textile manufac-turing sector, focusing on Monno Fabrics Ltd in Bangladesh. Acknowledging the strategic nature of procurement in supply chain management, the research identifies a key gap within the organi-sation: the lack of a systematic, transparent and multi-criteria approach for supplier evaluation and selection. Historically, supplier selection at the firm has been based on informal decision-making, price, and interpersonal relationships, resulting in inconsistencies and potential ineffi-ciencies. The study introduces a Multi-Criteria Decision Analysis (MCDA) approach to address this, incorporating the Analytic Hierarchy Process (AHP) and the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS). The research employs a deductive and pragmatic research design, with a single embedded case study approach. Data were gathered primarily from struc-tured pairwise comparisons and interviews with experienced procurement managers and sec-ondarily from procurement records to assess supplier performance. We identified a list of ten criteria for supplier evaluation via a literature review and expert review process, which included traditional criteria, such as quality, delivery performance, and cost, as well as more current is-sues, such as sustainability, risk, and supplier relationships. The AHP approach was used to calcu-late the relative weighting (weights) of the criteria, with consistency verified through the con-sistency ratio test. The findings showed that quality and delivery performance are the key criteria in supplier selection, followed by cost criteria. However, the current situation at the company has shown that sustainability and relational criteria have a comparatively lower weight. The TOP-SIS approach was then applied to evaluate and rank six suppliers in terms of the weighted crite-ria. The results highlight the utility of the hybrid AHP-TOPSIS approach in generating a transpar-ent, logical and replicable supplier ranking process. In order to ensure the validity of the findings, a sensitivity analysis was performed by altering the importance of criteria. This analysis revealed that some criteria have a considerable impact on the rankings, but the model is fairly robust across different weight sets. The research is relevant both theoretically and practically. Theoreti-cally, it helps fill a gap in the use of MCDA approaches in the Bangladeshi textile industry. In practice, it offers Monno Fabrics Ltd. a decision-making framework that improves clarity, consistency and alignment of supplier procurement decisions. The study further provides some practical in-sights into incorporating MCDA into organisational practices, particularly in terms of stakeholder participation and ongoing assessment. More broadly, the thesis underscores the benefits of structured and analytical decision-making in supplier procurement and shows the value of MCDA models in improving supply chain efficiency and robustness in manufacturing settings.