Evaluation of buyer‐supplier relationships using an integrated mathematical approach of interpretive structural modeling (ISM) and graph theoretic matrix

Abstract

Abstract Purpose – The purpose of this paper is to propose a methodology for evaluating and comparing supply chain relationships, specifically when, small and medium scale enterprise (SME) is considered as focal company. Design/methodology/approach – The paper proposes a mathematical solution based on interpretive structural modeling and graph theory matrix to determine the supply chain relationship index. The application is demonstrated for the case of Indian automotive SMEs based on the secondary data reported. Findings – Solution determines supply chain buyer‐supplier index for upstream and downstream. Based on which coefficient of similarity and dissimilarity are determined to evaluate the net pool of buyer‐supplier relationship on focal small and medium scale automotive component manufacturing industry. Practical implications – Developed approach and results will help SMEs in general and Indian automobile component manufacturing SMEs to rethink on their supply chain relationships and identify the reasons behind their present failures and establish the criteria for win‐win partnership. Originality/value – The paper addresses the following issues: how buyer‐supplier relationships can be quantified and the impact measured for the present working of focal SME; how SMEs can convince upstream and down stream supply chain players to initiate improvement on some dimensions of buyer‐supplier relationships; and on what basis change in relationships (from transactional to alliance) can be made to minimize the supply chain pressure on a focal company.

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