Issues with decision making methods for supplier segmentation in supplier relationship management: A literature review

The recent global pandemic due to COVID-19 disease has triggered significant supply chain disruptions for global firms. Global firms now realize that all suppliers do not contribute equally to grow the supply chain business and manage disruptions. Hence, supplier segmentation becomes a vital decision-making strategy for enterprise firms to improve supply chain sustainability through effective supplier relationship management. Supply chain experts use various decision-making methods for supplier segmentation. This study aims to provide perspective on decision-making methods used in research studies on supplier segmentation and their practical limitations and drawbacks with some real-world examples. For this, the study used a systematic review of supplier segmentation literature. The study concludes that supplier segmentation is a multi-criteria problem. The decision-making methods used in the supplier segmentation literature have limitations in predicting the supplier behavior uncertainty in a real-world situation. Hence, supply chain practitioners should give due attention to these limitations while selecting one of these methods to solve their supplier segmentation problem.