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Improving Purchasing Productivity at IBM with a Normative Decision Support System

Author

Listed:
  • Paul S. Bender

    (Bender Management Consultants, 300 East 59th Street, New York, New York 10022)

  • Richard W. Brown

    (Resource Management Systems, 93 Massachusetts Avenue Boston, Massachusetts 02115)

  • Michael H. Isaac

    (IBM Corporation, 22 Water Street, White Plains, New York 10601)

  • Jeremy F. Shapiro

    (Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)

Abstract

A computerized vendor selection system was implemented for the purchasing department of IBM's Poughkeepsie manufacturing facility. The system, called the Vendor Selection System (VSS), employs advanced mixed integer optimization techniques within a flexible but structured environment to help purchasing personnel to make better contract decisions. They can use the VSS without prior training in computer science or programming and achieve significant savings.

Suggested Citation

  • Paul S. Bender & Richard W. Brown & Michael H. Isaac & Jeremy F. Shapiro, 1985. "Improving Purchasing Productivity at IBM with a Normative Decision Support System," Interfaces, INFORMS, vol. 15(3), pages 106-115, June.
    • Handle: RePEc:inm:orinte:v:15:y:1985:i:3:p:106-115
    DOI: 10.1287/inte.15.3.106
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    Cited by:

    1. Yücel, Eda & Karaesmen, Fikri & Salman, F. Sibel & Türkay, Metin, 2009. "Optimizing product assortment under customer-driven demand substitution," European Journal of Operational Research, Elsevier, vol. 199(3), pages 759-768, December.
    2. Marc-David Cohen & Charles B. Kelly & Andrés L. Medaglia, 2001. "Decision Support with Web-Enabled Software," Interfaces, INFORMS, vol. 31(2), pages 109-129, April.
    3. Li, Dong & Nagurney, Anna, 2015. "A general multitiered supply chain network model of quality competition with suppliers," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 336-356.
    4. Huang, Samuel H. & Keskar, Harshal, 2007. "Comprehensive and configurable metrics for supplier selection," International Journal of Production Economics, Elsevier, vol. 105(2), pages 510-523, February.
    5. Mohammad Izadikhah & Reza Farzipoor Saen & Razieh Roostaee, 2018. "How to assess sustainability of suppliers in the presence of volume discount and negative data in data envelopment analysis?," Annals of Operations Research, Springer, vol. 269(1), pages 241-267, October.
    6. Demirtas, Ezgi Aktar & Üstün, Özden, 2008. "An integrated multiobjective decision making process for supplier selection and order allocation," Omega, Elsevier, vol. 36(1), pages 76-90, February.
    7. Hammami, A. & Burlat, P. & Campagne, J. P., 2003. "Evaluating orders allocation within networks of firms," International Journal of Production Economics, Elsevier, vol. 86(3), pages 233-249, December.
    8. Amid, Amin & Ghodsypour, S.H. & O'Brien, Christopher, 2009. "A weighted additive fuzzy multiobjective model for the supplier selection problem under price breaks in a supply Chain," International Journal of Production Economics, Elsevier, vol. 121(2), pages 323-332, October.
    9. Vijay Gupta & Emmanuel Peters & Tan Miller & Kelvin Blyden, 2002. "Implementing a Distribution-Network Decision-Support System at Pfizer/Warner-Lambert," Interfaces, INFORMS, vol. 32(4), pages 28-45, August.
    10. Xia, Weijun & Wu, Zhiming, 2007. "Supplier selection with multiple criteria in volume discount environments," Omega, Elsevier, vol. 35(5), pages 494-504, October.
    11. Jewel S. Bonser & S. David Wu, 2001. "Procurement Planning to Maintain Both Short-Term Adaptiveness and Long-Term Perspective," Management Science, INFORMS, vol. 47(6), pages 769-786, June.
    12. Meir J. Rosenblatt & Yale T. Herer & Ilan Hefter, 1998. "Note. An Acquisition Policy for a Single Item Multi-Supplier System," Management Science, INFORMS, vol. 44(11-Part-2), pages 96-100, November.
    13. Kuo, R.J. & Pai, C.M. & Lin, R.H. & Chu, H.C., 2015. "The integration of association rule mining and artificial immune network for supplier selection and order quantity allocation," Applied Mathematics and Computation, Elsevier, vol. 250(C), pages 958-972.
    14. Ghodsypour, S. H. & O'Brien, C., 1998. "A decision support system for supplier selection using an integrated analytic hierarchy process and linear programming," International Journal of Production Economics, Elsevier, vol. 56(1), pages 199-212, September.
    15. Baskaran, Venkatesan & Nachiappan, Subramanian & Rahman, Shams, 2012. "Indian textile suppliers' sustainability evaluation using the grey approach," International Journal of Production Economics, Elsevier, vol. 135(2), pages 647-658.
    16. Degraeve, Zeger & Labro, Eva & Roodhooft, Filip, 2000. "An evaluation of vendor selection models from a total cost of ownership perspective," European Journal of Operational Research, Elsevier, vol. 125(1), pages 34-58, August.
    17. Gheidar Kheljani, J. & Ghodsypour, S.H. & O'Brien, C., 2009. "Optimizing whole supply chain benefit versus buyer's benefit through supplier selection," International Journal of Production Economics, Elsevier, vol. 121(2), pages 482-493, October.
    18. Oliveira, Rui Carvalho & Lourenco, Joao Carlos, 2002. "A multicriteria model for assigning new orders to service suppliers," European Journal of Operational Research, Elsevier, vol. 139(2), pages 390-399, June.
    19. Charles L. Munson & Meir J. Rosenblatt, 1997. "The Impact Of Local Content Rules On Global Sourcing Decisions," Production and Operations Management, Production and Operations Management Society, vol. 6(3), pages 277-290, September.
    20. Guo, Yunsong & Li, Yanzhi & Lim, Andrew & Rodrigues, Brian, 2008. "Tariff concessions in production sourcing," European Journal of Operational Research, Elsevier, vol. 187(2), pages 543-555, June.
    21. Tan Miller & Emmanuel Peters & Vijay Gupta & Oduntan Bode, 2013. "A logistics deployment decision support system at Pfizer," Annals of Operations Research, Springer, vol. 203(1), pages 81-99, March.
    22. Wang, Ge & Huang, Samuel H. & Dismukes, John P., 2004. "Product-driven supply chain selection using integrated multi-criteria decision-making methodology," International Journal of Production Economics, Elsevier, vol. 91(1), pages 1-15, September.
    23. Gao, Zhen & Tang, Lixin, 2003. "A multi-objective model for purchasing of bulk raw materials of a large-scale integrated steel plant," International Journal of Production Economics, Elsevier, vol. 83(3), pages 325-334, March.
    24. Ghodsypour, S. H. & O'Brien, C., 2001. "The total cost of logistics in supplier selection, under conditions of multiple sourcing, multiple criteria and capacity constraint," International Journal of Production Economics, Elsevier, vol. 73(1), pages 15-27, August.

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    Keywords

    productivity; decision analysis: systems;

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