Case Application of a Methodology for Determining a Manufacturer’s Preferred Customer Status with Suppliers

Abstract

As most suppliers’ role in the value addition process has been elevated to a strategic level, manufacturing supply chains are pushed to establish and develop competitive supply bases. In practice, these strategic suppliers often have multiple manufacturing-customers, making a particular manufacturer one among several manufacturers competing for the same type of products/services. This makes a supplier implicitly biased in extending and offering its best to few preferred customers, making it difficult for the manufacturer. Hence, it is always a test for a manufacturer to manage and distinguish itself as a preferred customer, specifically from its key suppliers’ perspective. Although the concept of preferred customer can bring about a tremendous change in business practice, it has been an ignored topic both in research and practice. Therefore, in this article, a methodology is proposed using extended fuzzy analytic hierarchy process for assisting a manufacturer by providing paradigms to determine its favorable disposition from its key suppliers’ perspective. This work forms a basis for a manufacturer to create the best strategies with the right suppliers and in turn, secure a strong return on investment.