A multi-stage hybrid model in risk management for supplier selection and order allocation- case of AB Inbev Vietnam

Abstract

In manufacturing, Procurement offers the inputs needed for a business to run day-to-day operations and exists as one of many branches within the supply chain structure. Every purchase is infused with numerous risks, these consist of complex, and uncertain. Reducing cost benefits act as the best strategy in the purchasing process and directly affect the manager’s decision-making in each vital upstream. However, in the modern competitive market, the risk management of Procurement, Supplier risk management (SRM) is a vital component of an organization's overall risk management strategy. The process of direct procurement involves effectively managing relationships with various suppliers to secure the necessary products and materials for continuous operations. This will ensure the quality of raw materials of manufacturing and avoid supply chain disruption. It is critical that the organization proactively recognizes initially and addresses the risks of suppliers to minimize the proportion of Disruption in the Supply chain, The fluctuation of material costs,… It is necessary to evaluate and identify SRM strategy in which supplier is suitable which depends on the key criteria for managing supply chain risks of company as well as the reasonable allocation strategy. These interconnected issues have the potential to negatively impact the organization. It is crucial to evaluate the probability and seriousness of these issues and implement appropriate measures to minimize the associated risks. This research focuses on accessing the Supplier Risk Management strategy in the manufacturing companies’ procurement strategy case of Brewing manufacturing - AB InBev. The specific objectives were to identify risk sources; analyze these factors that lead to supplier risks by AHP & TOPSIS and the efficient suppliers by DEA depending on some key criteria. Determination of the suppliers and order allocation applied Mix Integer Program (MIP) for specific periods. The study uses the set data from interviews and surveys of the most relevant experts in AB InBev Vietnam and brewing companies. The data were obtained primarily from related to public journals and organizational reports of experts with same case, also the questionnaire administration and company system’s interviews.