Evaluation of product development partners using an integrated AHP-VIKOR model

Abstract

Purpose – Today, customers are generally perceived to be demanding higher quality and better performing products, in shorter and more predictable development cycle-times and at a lower cost. These market pressures drive firms to collaborate with possible partners in product development (PD) processes. However, the selection of a suitable partner for an effective PD is not an easy decision and is associated with complexity. The purpose of this paper is to propose an integrated multi-criteria decision-making (MCDM) approach to effectively evaluate PD partners. Design/methodology/approach – The proposed evaluation procedure consists of several steps. First, based on a literature review and expert validation, the strategic main and sub-criteria of the PD partner selection process that companies consider the most important are identified. After constructing the evaluation criteria hierarchy, the criteria weights are calculated by applying the Analytic Hierarchy Process (AHP) method. The VIKOR (a compromise ranking) method is used to obtain the final partner ranking results. A case study is given to demonstrate the potential of the methodology. In the last part of the study, a sensitivity analysis is performed to determine the influence of criteria weights on the decision making process. Findings – The PD partner evaluation model contains three main criteria, namely, partner, collaboration and PD-oriented criteria, with 13 sub-criteria. The market position, competency of the partner, compatibility, technical expertise and complementarity are found as the most considerable evaluation criteria for the ABC case company. Results of the sensitivity analysis from different cases demonstrate that the integrated AHP-VIKOR model is quite sensitive to the weights assigned to the evaluation criteria. This finding underlines the importance of forming a capable, qualified group of experts for the decision-making procedure. The results of the empirical study show that the proposed evaluation framework is practical for solving partner selection problems. Originality/value – Partner selection is critical to the success of a collaborative PD process. The main contribution of this paper is the definition and development of an effective evaluation framework to guide managers for suitable PD partner selection. In our knowledge, there exists no study in the literature that combines the established AHP VIKOR model for PD partner selection problem. This study can be useful to researchers to better understand PD partner selection problem theoretically, as well as to organizations in designing better satisfying PD partner evaluation systems.