A Hybrid MCDM Model to Evaluate and Classify Outsourcing Providers in Manufacturing

It is a common practice for enterprises to use outsourcing strategies to reduce operating costs and improve product competitiveness. Outsourcing providers or operators need to be aware of environmental protection and make products comply with the restrictions of international environmental regulations. Therefore, this study proposes a set of multiple criteria decision-making (MCDM) approaches for systematic green outsourcing evaluation. First, a team of experts is established to discuss mutually dependent relationships among criteria, and the decision-making trial and evaluation laboratory (DEMATEL) technique is applied to generate subjective influential weights. Then, a large amount of data from outsourcing providers is collected, and the criteria importance through the intercriteria correlation (CRITIC) method is used to obtain the objective influential weights. Finally, a novel classifiable technique for ordering preference based on similarity to ideal solutions (classifiable TOPSIS) is proposed to integrate the performance of green outsourcing providers and classify them into four levels. The classifiable TOPSIS improves the shortcomings of conventional TOPSIS and establishes a visual rating diagram to help decision-makers to distinguish the performance of outsourcing providers more clearly. Taking a Taiwanese multinational machine tool manufacturer as an example, the performance of outsourcing providers related to manufacturing activities was investigated to demonstrate the effectiveness and applicability of this proposed model.