An integrated decision-making tool for pharmaceutical supplier selection

Purpose In the health-care supply chain, selection of the most appropriate suppliers plays a decisive role while providing the right quantity of medical supplies at right time and least possible cost maintaining the desired quality level. The main aim of health-care supplier selection is to meet the quality standards, minimize risk, ensure consistent delivery, optimize operating costs, effective inventory management, efficiency improvement and develop long-term relationships through collaboration and communication. This paper aims to propose application of an integrated decision-making tool for solving a pharmaceutical supplier selection problem in the Indian health-care scenario. Design/methodology/approach In this paper, the performance of 25 pharmaceutical suppliers is assessed treating nine real-time financial metrics for the year 2023–24 as the evaluation criteria. The relative significance of those metrics (criteria) are estimated using criteria importance through intercriteria correlation (CRITIC) method, while the considered pharmaceutical suppliers are ranked from the best to the worst using multi-attributive border approximation area comparison method. Thus, this paper designs an integrated tool to ease out solution of a pharmaceutical supplier selection problem. Findings The CRITIC method picks out “inventory turnover ratio” and “return on assets” as the most and least important criteria. Application of the proposed integrated decision-making tool helps in partitioning all the 25 pharmaceutical suppliers into upper and lower approximation areas, with identification of suppliers S11 and S20 as the best and worst choices, respectively. The suppliers located in the upper approximation area can act as the benchmarks to the underperformers. It would also assist in highlighting the relative strengths and weaknesses of each of the suppliers under consideration. Originality/value Being an easy-to-implement, simple and objective decision-making approach, it provides consistent and reliable results to the said supplier selection problem. It would remain unaffected due to the changes in the measurement units displaying the criteria values of the alternative suppliers and type of the criteria formulation. Besides health care, its application can also be extended to choose suppliers in other industries, such as automobile, textile, manufacturing, chemical and construction. It can be fused with different uncertainty models to cater subjectivity in the decision-making process.