Tailored Approaches to Optimizing Vendor Evaluation and Supplier Performance. A Case Study of Pininfarina S.p.A.

In the landscape of modern manufacturing, the optimization of supply chain performance stands as a cornerstone for success. As manufacturing companies navigate the complexities of global sourcing and procurement, the efficacy of vendor relationships emerges as a critical determinant of operational efficiency and competitive advantage. Pininfarina S.p.A., a renowned name in the automotive industry for its innovative design and engineering solutions, recognises the critical role that suppliers play in its supply chain ecosystem. However, like many of its industry peers, Pininfarina finds it difficult to consistently evaluate its network of suppliers through a well-structured process. Traditionally, Pininfarina, like many other manufacturing entities, has relied heavily on subjective methodologies such as questionnaires and internal review to assess vendors performance. While these methods provide some insights, they often fall short in providing a comprehensive and objective evaluation framework. Recognizing the need for a more empirical and systematic approach, this research endeavors to develop a tailored vendor rating methodology specifically designed for Pininfarina S.p.A. The journey towards crafting this methodology begins with a thorough review of past case studies, aiming to elucidate the key factors influencing the supply chain. By amalgamating theoretical frameworks with real-world perspectives, a nuanced understanding of critical evaluation criteria emerges. Among the various methodologies discovered, decision-making techniques known as Multicriteria Decision Making (MCDM) are found as the most used in the cases analysed. In this study, the focus is set on two of these techniques: Analytical Hierarchy Process (AHP) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). These methods provide structured frameworks for evaluating supplier performance, guiding our investigation into their mechanics. However, theory alone doesn't paint the full picture. With historical procurement data from Pininfarina in hand, the paper delve into practical analysis, aiming to uncover tangible insights into effective vendor evaluation. Through meticulous statistical examination, the objective is to reveal the critical variables behind successful supplier relationships, and their relations. The ultimate goal of this research is to equip Pininfarina S.p.A. with a robust vendor rating framework that transcends the limitations of traditional methodologies. By seamlessly integrating this framework into the company's e-procurement portal, Pininfarina aims to foster transparency and accountability in its supplier relationships. Furthermore, by harnessing historical supplier performance data, Pininfarina can drive continuous improvement initiatives, thereby enhancing overall supply chain efficiency and bolstering competitiveness in the dynamic automotive industry landscape. In essence, this research embarks on a journey to enhance the accuracy and reliability of vendor evaluations, thereby empowering Pininfarina S.p.A. and similar manufacturing entities to make informed procurement decisions, ultimately driving operational excellence and sustainable growth in an increasingly competitive global market.