Evaluation of Potential Manufacturing Suppliers Using Analytical Hierarchy Process and Cluster Analysis for Benchmarking

Abstract

This paper proposes an assessment method for the potential outsourcees (suppliers) in agreement with thebenchmark evaluated for a set of surveyed UK based companies. The results of the survey are orderedusing Analytical Hierarchy Process (AHP) and Cluster Analysis (CA). The partial and total evaluation score ofeach supplier is compared with the benchmark. The outsourcee that achieves the highest total score couldbe considered as the most suitable match. The result of integrating AHP and CA may be applied as aneffective method for matching and evaluating the right outsourcee in the manufacturing sector.

Full text

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 36
Evaluation of Potential Manufacturing Suppliers Using Analytical
Hierarchy Process and Cluster Analysis for Benchmarking
A. Adnan a2adnan@uel.ac.uk
4 Wanstead Park Road
A. Cazan
School of Computing & Technology,
University of East London, UK
M. Safa
Faculty of Engineering,
Kingston University
A.W.M Lung
Faculty of Engineering,
Kingston University
G. Williams
editor_ijcss@cscjournals.org
Faculty of Engineering,
Kingston University
___________________________________________________
Abstract
This paper proposes an assessment method for the potential outsourcees (suppliers) in agreement with the
benchmark evaluated for a set of surveyed UK based companies. The results of the survey are ordered
using Analytical Hierarchy Process (AHP) and Cluster Analysis (CA). The partial and total evaluation score of
each supplier is compared with the benchmark. The outsourcee that achieves the highest total score could
be considered as the most suitable match. The result of integrating AHP and CA may be applied as an
effective method for matching and evaluating the right outsourcee in the manufacturing sector.
Keywords: Analytical Hierarchy Process (AHP), Cluster Analysis, Decision, Outsourcee, Outsourcing,
Outsourcer, Outsourcee Selection

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 37
Ou t s o rc e e S e le c ti o n
fo r M an uf a c tu rin g
Te ch nology &
M a nu fac tu ring A bil ity
M a na ge me nt &
Bu s ine ss P ro fes s ion a lism
F in an ci a l O p erat ion
A b ili t y
R ep uta ti on
Or gan isa t ion a l
En vio rn ment & Law s
R es p ons iv en e ss t o cha ng e
F lex ib ility t o a d jus t ch an ge s
L ink with a n um be r o f low t ie r sup plie r s
L ink ed s u pp lier s co m ply q ua lit y s ta nd ar ds
S e cur e c o m mun ic at ion s ys tem
I nf or ma tio n de c lar at ion a bo ut link ed s up pl iers
L ink ed s u pp lier s pa rt ic ipat e in im pro ve me nt s
G o od re la tio n sh ips wi th lin k ed su ppli er s
U n de rs ta nd ing th e cu st om er 's re qu ir em en t
T r ain ed s ta ff f or re la tio ns h ip d ev elo p me nt
N ot su bj e cte d to re c ei ver sh ip o r ba nk r upt cy
T im e ( Du r at ion ) in bu sine ss b y o u tso u rc ee
Cost E ffe ctiv en ess
O n T ime De liv ery
Q ua lit y
C om pe t itiv e C o st
S ust ai na b le C o st
C os t C o ns is ten cy
D el ive ry L ea d T im e
D el ive ry Co n sis te nc y
D el ive ry Do c um e nta tio n
P ro d uc t St a nd ar d
D es ign S ta n dar d
M a te ri al S ta nd a rd
H ar dw a r e
P ers o nn el cap a b ilit y
P ro ce ss c apa b ilit y
Go a l Cr ite ria Su b - Cr iteria
A lte r nat iv es
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I nt ell ect ua l pro p er ty pr ot ect io n law
O ut so ur ce e un de rs ta nd s bu sin es s r ul es
0. 0 7 26
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0 . 0 9 2 7
0. 1 1 8 2
0. 14 0 5
0. 1 8 9 7
0 . 2 5 9 5
0. 5 8 3 4
0 . 4 1 6 6
0. 5 59 3
0. 1 7 4 0
0. 2 6 67
0. 5 1 6 7
0. 4 8 3 3
0. 05 0 0
0. 1 6 72
0. 0 8 12
0. 0 9 69
0. 1 6 7 2
0. 16 7 2
0. 1 2 2 4
0. 1 46 0
0. 7 0 84
0. 2 9 16
0. 48 0 6
0. 2 2 3 2
0. 2 96 2
0. 2 7 0 2
0. 4 4 3 0
0. 2 8 68
0. 50 6 6
0. 2 73 4
0. 2 2 00
FIGURE 1: The weighted hierarchy structure for outsourcee selection
Figure 1 is a result of survey of around twenty British manufacturing companies practicing outsourcing. The
order and weightings of the criteria are the result of the application of AHP & CA to the survey results.
Therefore, the order and the values listed in Figure 1 are the benchmark representative for the companies
surveyed.
1. Introduction
The main objective of the outsourcing is to compliment participants manufacturing ability by maximising the
utility of available resources. Due to differences between outsourcer (company) and outsourcee (supplier)
regarding their locations, management methods, legal and taxation system, there are difficulties in practicing
outsourcing effectively. The communications (applications) are also vulnerable to attack by malicious
applications [11]. The need to protect communications from prying eyes is greater than before [10]. The
success of the outsourcing depends upon the ability of the outsourcee in delivering good quality products on
time at a competitive cost.
Since over the last decade researchers have increased their attention for improving outsourcing by
implementing improvement models and algorithms to survive in dynamic Global market. In this regard an
improvement model was proposed that was formulated by integrating ‘Theory of Constraints’ with
outsourcing in order to exploit the existing resources [1]. The outcome of the outsourcing is the acquisition of
the quality products at competitive sustainable cost and short lead time [7]. The initial problem of the
outsourcing arises when the desires or the goals of the outsourcer and the outsourcee conflicts or their
preferences are different. Therefore, improvement in outsourcing is not guaranteed without the participation
of right outsourcee. The outsourcees must be evaluated according to the criteria that are in line with the
outsourcer organisation’s outsourcing strategies.

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 38
A wrong decision choice makes the outsourcing fail to achieve reduction in manufacturing lead time, cost
and enhance quality [5]. The analytical hierarchy process was developed by Thomas Saaty in 1971 [6].
Bhutta and Huq applied total cost of ownership and AHP for supplier selection [2]. The supplier selections
have been carried out by applying AHP [2], [3]. Ting and Cho suggested that the suppliers be selected
according to their global performances [8]. Outsourcing participant evaluation is one of the most important
factors. This study encompasses the application of the AHP-CA method on one of the European
Manufacturing Company ‘EMC’ for suitable outsourcee evaluation. The information used in this case study is
line with real data but the names of the companies have been changed for business security.
2. Outsourcee Evaluation
The objective of EMC is to become a reputable player in its local market and expand its business globally as
part of strategic planning. Having achieved a great share of its local market business, EMC is offering after
sales service and maintenance to other organisations as an outsourcee. Due to dynamic nature of the
markets, it is always desirable searching new outsourcee for successful and sustainable outsourcing
operations. In order to expand its activities EMC decided outsourcing in 2004. There were uncertainties due
to a number of cases of outsourcing failures because of hidden problems. It was essential to search for an
outsourcee that understands EMC’s market requirements and participates in development and manufacture
of the products according to European standards.
In the initial search approximately more than 6000 suppliers were identified and anyone could be a potential
outsourcee candidate. In order to refine the search an evaluation method is developed that is based on
comparing the outsourcer’s requirement criteria with supplier’s (candidate outsourcee) capability criteria.
According to the supplier’s database, there are thousands of suppliers willing to be outsourcee candidate
and everyday their number is increasing. It is very important to choose a supplier that is most appropriate for
the company, as soon as possible and at the expense of minimum cost. The problem of evaluating an
outsourcee becomes difficult when constraints such as minimum cost, short search time and accuracy are
applicable. Due to Globalisation, companies all around the World are competing to supply despite their
specifications are in different formats due to difference in language and standards.
The evaluation method is applied to rank the suppliers enabling equality of access as a free trade market.
During outsourcee (supplier) evaluation, the attributes are matched and Decision Makers assign relative
priority / importance weight. Each outsourcee (supplier) is assessed by employing eight criteria and twenty-
six sub-criteria. The suppliers are ranked in a logical order according to their total importance weights which
are calculated from their criteria and sub-criteria weights. As an illustration, application of the evaluation
method is shown for comparing four (candidate outsourcee) suppliers.
3. Assigning Ranking Scale (S)
Prioritised the criteria based on their relative importance and used as a filter in short-listing the
manufacturers as candidate outsourcee. Quality is the first criteria on the importance list. The outsourcee’s
capability to comply quality is scaled from 1 to 10; 10 for conforming ISO or European standards, 7 for
American standards and 5 for Chinese standards. On time delivery criterion is composed of consistent
delivery, flexible delivery within reasonable lead time and complete documentation. The ‘On Time Delivery’
ability is scaled from 1-10; 1 for worst and 10 for excellent ability. The criterion of cost effectiveness is used
for consistent, competitive cost that is sustainable. Similarly, cost effectiveness ability of the outsourcee is
scaled 1 to 10; 1 for worst and 10 for most acceptable price quotations. The fourth selection criterion is
Organisational environment & laws that scales the organisation’s ability from the intellectual property
protection law and business law. It is also scaled from 1 to 10; 1 having worst and 10 for the best ability.
Technology & manufacturing ability encompasses the hardware, personnel capability and process capability.
For selecting an outsourcee Technology & manufacturing ability is scaled from 1 to 10; 1 having worst and
10 for the best ability. Management & business professionalism criterion evaluates the training programme
and the professional behaviour of an organisation. Like other criteria, it is also scaled from 1 to 10; 1 having
worst and 10 for the best ability. Financial operation ability is ranked seventh according to importance in
decision making. This criterion evaluates an outsourcee’s financial stability and professional accreditation of
its accounting staff. Similar to other criterion, it is also scaled from 1 to 10; 1 for least ability and 10 for the
excellence. Reputation is the eighth criterion that identifies an outsourcee’s ability for implementing a
contract and its acknowledgement in the community it operates. Like other criterion, it is also scaled from 1
to 10; 1 for least ability and 10 for the excellence.

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 39
4. Application of the AHP-CA Method
The evaluation method is developed to facilitate small and medium size manufacturing organisations in
assessing candidate outsourcee. As a test case method is applied on EMC that specialises in designing,
manufacturing and assembling motorcycles, mopeds and their parts to select an outsourcee based in China.
The process of outsourcee selection is based on multi-criteria such as cost, delivery, quality and reputation
etc. The abbreviations of all the criteria, sub-criteria and their corresponding scores which are used in the
formula/ expressions are listed in the appendix Table. Total outsourcee priority weights are evaluated using
equation 1.
… (1)
Where
= Priority weight of criterion
= Criterion’s number
= Priority weight of sub-criterion
= Number of sub-criterion
= Outsourcee’s ranking score
= Candidate outsourcee’s Number
‘ ’ is the total number of sub-criteria for certain criterion. The numbers of sub-criteria range from two to
eight for a particular criterion in the given formulated matching algorithm. ‘ ’ is the total numbers of
outsourcee candidate applicants.
The values of ‘ ’are:
For SUPD , for SUPK , for SUPW and for SUPB
The abbreviations of all the criteria and sub-criteria are tabulated as follows.
TMA O EL
FARe
MBP
CE
OTD
Qu
MS
DS
PS
DD
DC
DLT
CCn
SC
Cm C
UBR
GRLT
IPLT
IDLT
SCom
QSLT
NoLT
FlCh
ResCh
TiB
NBcy
PrCp
PlCp
HdWr
UIPL
UBL
SUPD
(S1)
SUPK
(S2)
SUPW
(S3)
SUPB
(S4)
W1
W2
W3
W4
W5
W6
Outso urcee
Select ion
W7
W8
W83
W82
W81 W73
W72
W71 W6 3
W62
W61 W5 2 W48
W47
W46
W45
W44
W43
W42W41
W32
W31 W2 3
W22
W21
TSCR
W51 W12
W11
S183
S283
S383
S483
S411
S412
S421
S311
FIGURE 2: Figure showing criteria, sub-criteria for evaluating outsourcing participant (joint)

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 40
The Figure 2 shows the four layers of outsourcee selection hierarchy process. The top layer represents the
goal/ objective. The second and the third hierarchy layers represent outsourcee selection criteria and sub-
criteria. The fourth layer shows four short listed candidate outsourcees: SUPD, SUPK, SUPW and SUPB.
The Figure 2 displays 8 criteria and 26 sub-criteria connections corresponding to each outsourcee. For more
clarity, the Figure 2 is split into further four Figures. For each of the detailed four Figures the hierarchy level
1, level 2 and level 3 are common. In each of the Figures 3 to 6, the level 4 of the hierarchy displays a single
candidate outsourcee.
SUPD’s priority weight evaluation components are shown in Figure 3, SUPK’s priority weight evaluation
components in Figure 4 and SUPW’s priority weight evaluation components in Figure 5 and SUPB’s priority
weight evaluation components in Figure 6. In order to perform the calculations, formula 1 is expanded to
expression 2 and the numerical calculation is illustrated in expression 3 for SUPD, expressions 4 & 5 for
SUPK, expressions 6 & 7 for SUPW and expressions 8 & 9 for SUPB.
The final total priority weights results are calculated as:
SUPD 7.0342, SUPK’s 6.5991, SUPW’s 6.3464, SUPB’s 5.3905.
TMA OEL
FARe
MBP
CE
OTD
Qu
MS
DS
PS
DD
DC
DLT
CCn
SC
CmC
UBR
GRLT
IPLT
IDLT
SCom
QSLT
NoLT
FlCh
ResCh
TiB
NBcy
PrCp
PlCp
HdWr
UIPL
UBL
SUPD
(S1)
W1
W2
W3
W4
W5
W6
Outsourcee
Selection
W7
W8
W83
W82
W81 W73
W72
W71
W63
W62
W61 W52 W48
W47
W46
W45
W44
W43
W42
W41
W32
W31 W23
W22
W21
TSCR
W51 W1 2
W11
S183 S182 S 181 S173 S172 S171 S16 3
S162
S161 S152 S151 S148
S147
S146
S145
S144
S143
S142S141 S132 S1 31 S123 S122 S12 1 S112 S111
FIGURE 3: Figure showing criteria, sub-criteria for evaluating outsourcing participant (SUPD)
SUPD (S1)
=
[
]
[
]
[
]
[ ]
[ ] [ ] [ ]
[ ]
1838318282181818
1737317272171717163631626216161615252151515
14848147471464 614545144441434314242141414
13232131313123231222212121211212111111
SwSwSwW
SwSwSwWSwSwSwWSwSwW
SwSwSwSwSwSwSwSwW
SwSwWSwSwSwWSwSwW
×+×+×
+×+×+×+×+×+×+×+×
+×+×+×+×+×+×+×+×
+
×
+
×
+
×
+
×
+
×
+
×
+
×
…
(2)
[
]
[
]
[
]
[ ]
[ ] [ ] [ ]
[ ]
0342.772200.0102734.01050 66.02595.0
102868.004430.052702.01897.002962.002232.074806.01405.0102916.0107084.01182.0
01460.001224.010167 2.00167 2.050969.0100812.001672.050500.00927.0
64833.0105167.00708.0102667.0101740.0105593.00726.01 04166.01058 34.00560.0
=×+×+××
+×+×+×+×+×+××+×+××
+×+×+×+×+×+×+×+××
+
×
+
×
×
+
×
+
×
+
×
×
+
×
+
×
×
…
(3)
Total Priority Weight of SUPD = 7.0342

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 41
TMA OEL
FARe
MBP
CE
OTD
Qu
MS
DS
PS
DD
DC
DLT
CCn
SC
CmC
UBR
GRLT
IPLT
IDLT
SCom
QSLT
NoLT
FlCh
ResCh
TiB
NBcy
PrCp
PlCp
HdWr
UIPL
UBL
W1
W2
W3
W4
W5
W6
Outsourcee
Selection
W7
W8
W83
W82
W81 W73
W72
W71 W63
W62
W61 W52 W48
W47
W46
W45
W44
W43
W42
W41
W32
W31 W23
W22
W21
TSCR
W51 W12
W11
S283 S282 S28 1 S273 S 272 S271 S26 3 S262S261 S252S 251 S248
S247
S246
S245
S244
S243
S242S241 S232 S2 31 S223 S222 S22 1 S212 S211
SUPK
(S2)
FIGURE 4: Figure showing criteria, sub-criteria for evaluating outsourcing participant (SUPK)
SUPK (S2) =
[
]
[
]
[
]
[ ]
[ ] [ ] [ ]
[ ]
2838328282281818
2737327272271717263632626226161625252251515
24848247472464624545244442434324242241414
23232231313223232222222121221212211111
SwSwSwW
SwSwSwWSwSwSwWSwSwW
SwSwSwSwSwSwSwSwW
SwSwWSwSwSwWSwSwW
×+×+×
+×+×+×+×+×+×+×+×
+×+×+×+×+×+×+×+×
+
×
+
×
+
×
+
×
+
×
+
×
+
×
… (4)
[
]
[
]
[
]
[ ]
[ ] [ ] [ ]
[ ]
5991.672200.072734.0105066.02 595.0
102868.004430.052702.01897.002962.002232.0104806.01405.072916.077084.01182.0
01460.001224.0101672.001672.050969.0100812.001672.000500.00927.0
74833.0105167.00708.0102667.081740.0105593.007 26.094166.095834.00560.0
=×+×+××
+×+×+×+×+×+××+×+××
+×+×+×+×+×+×+×+××
+
×
+
×
×
+
×
+
×
+
×
×
+
×
+
×
×
… (5)
Total Priority Weight of SUPK = 6.5991

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 42
TMA OEL
FARe
MBP
CE
OTD
Qu
MS
DS
PS
DD
DC
DLT
CCn
SC
CmC
UBR
GRLT
IPLT
IDLT
SCom
QSLT
NoLT
FlCh
ResCh
TiB
NBcy
PrCp
PlCp
HdWr
UIPL
UBL
W1
W2
W3
W4
W5
W6
Outsourcee
Selection
W7
W8
W83
W82
W81 W73
W72
W71 W63
W62
W61 W52 W48
W47
W46
W45
W44
W43
W42
W41
W32
W31 W23
W22
W21
TSCR
W51 W12
W11
S383 S382 S38 1 S373 S 372 S371 S36 3 S362S361 S352S 351 S348
S347
S346
S345
S344
S343
S342S341 S332 S3 31 S323 S322 S32 1 S312 S311
SUPW
(S3)
FIGURE 5: Figure showing criteria, sub-criteria for evaluating outsourcing participant (SUPW)
SUPW (S3) =
[
]
[
]
[
]
[ ]
[ ] [ ] [ ]
[ ]
3838338282381818
3737337272371717363633626236161635252351515
34848347473464634545344443434334242341414
33232331313323233222232121231212311111
SwSwSwW
SwSwSwWSwSwSwWSwSwW
SwSwSwSwSwSwSwSwW
SwSwWSwSwSwWSwSwW
×+×+×
+×+×+×+×+×+×+×+×
+×+×+×+×+×+×+×+×
+
×
+
×
+
×
+
×
+
×
+
×
+
×
… (6)
[
]
[
]
[
]
[ ]
[ ] [ ] [ ]
[ ]
3464.652200.052734.0105066.02595.0
102868.004430.052702.01897.002962.002232.054806.01405.052916.0107084.01182.0
01460.001224.0101672.001672.050969.0100812.001672.000500.00927.0
104833.0105167.00708.0102667.081740.0105593.00726.0104166.0105834.00560.0
=×+×+××
+×+×+×+×+×+××+×+××
+×+×+×+×+×+×+×+××
+
×
+
×
×
+
×
+
×
+
×
×
+
×
+
×
×
… (7)
Total Priority Weight of SUPW= 6.3464

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 43
TMA OEL
FARe
MBP
CE
OTD
Qu
MS
DS
PS
DD
DC
DLT
CCn
SC
CmC
UBR
GRLT
IPLT
IDLT
SCom
QSLT
NoLT
FlCh
ResCh
TiB
NBcy
PrCp
PlCp
HdWr
UIPL
UBL
W1
W2
W3
W4
W5
W6
Outsourcee
Selection
W7
W8
W83
W82
W81 W73
W72
W71 W63
W62
W61 W52 W48
W47
W46
W45
W44
W43
W42
W41
W32
W31 W23
W22
W21
TSCR
W51 W12
W11
S483 S482 S48 1 S473 S 472 S471 S46 3 S462S461 S452S 451 S448
S447
S446
S445
S444
S443
S442S441 S432 S4 31 S423 S422 S42 1 S412 S411
SUPB
(S4)
FIGURE 6: Figure showing criteria, sub-criteria for evaluating outsourcing participant (SUPB)
SUPB (S4) =
[
]
[
]
[
]
[ ]
[ ] [ ] [ ]
[ ]
4838348282481818
4737347272471717463634626246161645252451515
44848447474464644545444444434344242441414
43232431313423234222242121241212411111
SwSwSwW
SwSwSwWSwSwSwWSwSwW
SwSwSwSwSwSwSwSwW
SwSwWSwSwSwWSwSwW
×+×+×
+×+×+×+×+×+×+×+×
+×+×+×+×+×+×+×+×
+
×
+
×
+
×
+
×
+
×
+
×
+
×
… (8)
[
]
[
]
[
]
[ ]
[ ] [ ] [ ]
[ ]
3905.552200.052734.055066.02595.0
102868.004430.052702.01897.002962.002232.064806.01405.052916.0107084.01182.0
01460.001224.0101672.001672.050969.0100812.001672.000500.00927.0
34833.0105167.00708.0102667.071740.085593.00726.0104166.095834.00560.0
=×+×+××
+×+×+×+×+×+××+×+××
+×+×+×+×+×+×+×+××
+
×
+
×
×
+
×
+
×
+
×
×
+
×
+
×
×
… (9)
Total Priority Weight of SUPB = 5.3905
5. Results and Discussions
The priority weights of selection criteria for SUPB, SUPW, SUPK and SUPD are tabulated in Table 1 and
plotted in Figure 7. According to ‘organisational Environment & Laws’ criteria SUPK achieves the lowest
score, whereas, both SUPW and SUPD achieves the highest score. When assessing companies according
to ‘Technology & Manufacturing Ability’ criteria, it is found out that SUPB is the least suitable and SUPD is
the most suitable because it has achieved the highest score. From ‘Financial Operation Ability’ criteria
SUPW is the most stable and SUPB is the least stable. According to ‘Financial Operation Ability’ criteria’s
priority weight SUPD has low financial stability. It needs investments in order to sustain its activities.
Therefore, for a suitable outsourcee having low ‘Financial Operation Ability’ is a positive point. SUPD
achieves the highest ‘Reputation’ criteria priority weight. When analysing sub-criteria of ‘Reputation’ it is
highlighted that a suitable company is flexible, responsive to change and linked with a number of low tier
suppliers. The linked suppliers follow quality standards, labour laws and business rules. According to
‘Management & Business Professionalism’ criteria SUPD achieves the highest score and SUPK the lowest.
The ‘Cost Effectiveness’ criteria evaluates an organisation’s capability to manufacture a product at
competitive cost that is consistent and sustainable. From ‘Cost effectiveness’ perspective SUPK is most
suitable and SUPD is the second best choice. But when comparing companies from ‘Quality’ point of view
SUPD manufacture better quality than SUPK. On account of overall score SUPD is the first choice and
SUPK is the second choice as candidate outsourcee for EMC.

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 44
Criteria SUPB SUPW
SUPK SUPD
Organisational Environment & Laws 0.5273 0.5600 0.5040 0.5600
Technology & Manufacturing Ability 0.6069 0.7007 0.7007 0.7260
Financial Operation Ability 0.4685 0.7080 0.6053 0.5711
Reputation 0.2752 0.2752 0.2752 0.2984
Management & Business
Professionalism 1.0097 1.0097 0.8274 1.1820
Cost Effectiveness 0.4051 0.3376 0.6752 0.4727
On Time Delivery 0.8003 0.8003 0.8003 0.8003
Quality 1.2975 1.9548 2.2109 2.4237
Total: 5.3905 6.3464 6.5991 7.0342
Table 1: Table listing Supplier (outsourcee) comparison Model
FIGURE 7: Line graph for outsourcee selection criteria weights
6. Conclusions
The AHP-CA method has been applied successfully to evaluate outsourcee for a real manufacturing
company ‘EMC’. The results have satisfied the management of the company and earned their approval.
They recommended introducing some modifications according to types of products manufactured, locations
of candidate outsourcees and relationship between outsourcee and the outsourcer. One of the important
recommendations was to prepare a Performa that includes manufacturing level agreement that could be
signed with any company, only by incorporating participant company name. The second recommendation
was to arrange the benchmarks by their priority order. Furthermore, establishing the assessment/ evaluation
criteria and their weighting factors are influenced by the subjective opinions of the experts. The effect of the
subjective opinion is mitigated by applying AHP-CA method. In addition, the accuracy of the evaluation

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 45
method results depend upon assessment criteria, comparison data received from experts and the
interpretation of the decision maker. This research reveals the importance of the AHP-CA method and extent
to which decision makers are facilitated in outsourcee evaluation. It also reveals the alternative outsourcing
participant if their relative capabilities are to be assessed correctly.
7. References
1. Adnan, A., Arunachalam, S., Cazan, A. (2007), “Improving Outsourcing of Manufacturing Operations
By Integrating With Theory of Constraints”, 5th International Conference on Manufacturing
Research, De Montfort University.Leicester.UK.pp.191-195.
2. Bhutta, K.S., Huq, F. (2002), “Supplier selection problem: a comparison of the total cost of ownership
and analytical hierarchy process approach”, Supply Chain Management: An International Journal,
Vol.7.No.3 2002.pp.126-135.
3. Cebi, F., Bayraktar, D. (2003), “An integrated approach for supplier selection”, Logistics Information
Management, Vol.16.No.6 2003.pp.395-400.
4. Choy, K.L., Lee, W.B. (2003), “A generic supplier management tool for outsourcing manufacturing”,
Supply Chain Management: An International Journal, Vol.8.No.2 2003.pp.140-154.
5. Mei-yuan, W., Yao-bin, L., Jin-long, Z. (2006), “Software outsourcing risk management: establishing
outsourcee evaluation item systems”, Journal of Zhejiang University SCIENCE A, Vol.7.No.6
2006.pp.1092-1098.
6. Saaty, T.L.(1980), “The Analytic Hierarchy Process”, McGraw-Hill, New York, USA.
7. Seol, I., Sarkis, J. (2005), “A multi-attribute model for internal auditor selection”, Managerial Auditing
Journal, Vol.20.No.8 2005.pp.876-892.
8. Ting, S., Cho, D.I. (2008), “An integrated approach for supplier selection and purchasing decisions”,
Supply Chain Management: An International Journal, Vol.13.No.2 2008.pp.116-127.
9. Weber, C.A., Current, J.R., Benton, W.C. (1991), “Vendor Selection criteria and methods”, European
Journal of Operational Research, Vol.50.pp.2-18.
10. Acharya, B., Rath, G.S., Patra, S.K., Panigrahy, S.K. (2007), “Novel Methods of Generating Self-
Invertible Matrix for Hill Cipher Algorithm”, International Journal of Computer Science and Security,
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on Clusters”, International Journal of Computer Science and Security, Vol.1.Issue.1.pp.32-44.

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 46
Appendix:
CE: Cost Effectiveness
CmC: Competitive Cost
CnC: Consistent Cost
DCn: Delivery Consistency
DD: Delivery Documentation
DLT: Delivery Lead Time
DSd: Delivery Standard
FA: Financial Operation Ability
FlCh: Flexibility to Adjust Changes
GRLS: Good Relationships with Linked
Suppliers
HdWr: Hardware
IDLS: Information Declaration about Linked
Suppliers
IPLS: Linked Suppliers Participate in
Improvements
MBP: Management & Business Professionalism
MSd: Material Standard
Nbcy: Not Subjected to Receivership or
Bankruptcy
NoLS: Link with a No of Suppliers
OEL: Organisational & Environment Laws
OTD: On Time Delivery
PlCp: Personnel Capability
PrCp: Process Capability
PSd: Product Standard
QSdLS: Linked Suppliers Comply Quality Standards
Qu: Quality
Re: Reputation
ResCh: Responsiveness to Change
SCom: Secure Communication System
SuC: Sustainable Cost
TIB: Time (Duration) in Business by Outsourcee
TMA: Technology and Manufacturing Ability
TSCR: Trained Staff for Relationship Development
UBL: Outsourcee Understands Business Rules
UCBR: Understanding of Customer’s Requirement
UIBL: Outsourcee Understands Intellectual Property
Protection Law
W eight value of Organisational & Environment Laws Criterion
Weight value of Technology & Manufacturing Ability Criterion
Weight value of Financial Operation Ability Criterion
Weight value of Reputation Criterion
Weight value of Management & Business Professionalism Criterion
Weight value of Cost Effectiveness Criterion
Weight value of On Time Delivery Criterion
Weight value of Quality Criterion
Weight value of Intellectual Property Protection Laws sub –criterion
Weight value of Outsourcee Understands Business Rules sub-criterion
Weight value of Hardware sub-criterion
Weight value of Personnel Capability sub-criterion
Weight value of Process Capability sub-criterion
Weight value of not subjected to Receivership or Bankruptcy sub-criterion
Weight value of Time (Duration) in Business by Outsourcee sub-criterion
Weight value of Responsiveness to Change by Outsourcee sub-criterion
Weight value of Flexibility to Adjust Changes by Outsourcee sub-criterion
Weight value of Link with a Number of Suppliers sub-criterion
Weight value of Linked Suppliers Comply Quality Standards sub-criterion
Weight value of Secure Communication System sub-criterion
Weight value of Information Declaration about Linked Supplier sub-criterion
Weight value of Linked Supplier participate in improvements sub-criteria
Weight value of Good Relationships with Linked Suppliers sub-criteria
Weight value of Understanding of Customer’s Requirements sub-criteria
Weight value of Trained Staff for Relationship Development sub-criteria
Weight value of Competitive Cost sub-criteria
W eight value of Consistent Cost sub-criteria
Weight value of Sustainable Cost sub-criteria
Weight value of Delivery Lead Time sub-criteria
Weight value of Delivery Consistency sub-criteria
Weight value of Delivery Documentation sub-criteria
Weight value of Product Standard sub-criteria
Weight value of Design Standard sub-criteria

A. Adnan, A. Cazan, M. Safa, A.W.M Lung & G. Williams
International Journal of Security, (IJS) Volume (3) : Issue (3) 47
Weight value of Material Standard sub-criteria
Ranking Score of Intellectual Property Protection Laws for kth outsourcee
Ranking Score of Outsourcee Understands Business Rules for kth outsourcee
Ranking Score of Hardware for kth outsourcee
Ranking Score of Personnel Capability for kth outsourcee
Ranking Score of Process Capability for kth outsourcee
Ranking Score of not subjected to Receivership or Bankruptcy for kth outsourcee
Ranking Score of Time (Duration) in Business by Outsourcee for kth outsourcee
Ranking Score of Responsiveness to Change by Outsourcee for kth outsourcee
Ranking Score of Flexibility to Adjust Changes by kth outsourcee
Ranking Score of Link with a Number of Suppliers for kth outsourcee
Ranking Score of Linked Suppliers Comply Quality Standards for kth outsourcee
Ranking Score of Secure Communication System for kth outsourcee
Ranking Score of Information Declaration about Linked Supplier for kth
outsourcee
Ranking Score of Linked Supplier participate in improvements for kth outsourcee
Ranking Score of Good Relationships with Linked Suppliers for kth outsourcee
Ranking Score of Understanding of Customer’s Requirements for kth outsourcee
Ranking Score of Trained Staff for Relationship Development for kth outsourcee
Ranking Score of Competitive Cost for kth outsourcee
Ranking Score of Consistent Cost for kth outsourcee
Ranking Score of Sustainable Cost for kth outsourcee
Ranking Score of Delivery Lead Time for kth outsourcee
Ranking Score of Delivery Consistency for kth outsourcee
Ranking Score of Delivery Documentation for kth outsourcee
Ranking Score of Product Standard for kth outsourcee
Ranking Score of Design Standard for kth outsourcee
Ranking Score of Material Standard for kth outsourcee