A Multi-Criteria Decision Support Model for Strategic Metal Sourcing

Abstract

This thesis, conducted in collaboration with Trelleborg AB, investigates sourcing decisions for metal components within the Anti-Vibration Solutions business unit. The study addresses the challenge of evaluating sourcing alternatives across Europe and Asia-Pacific, where differences in cost, lead times, risk exposure, and sustainability create complex trade-offs. The purpose is to develop a practical decision-support model that enables more structured and transparent sourcing decisions.

Using an Operations Research approach, the study combines literature, semi-structured interviews, and company data to develop a multi-criteria decision-making model. The model evaluates suppliers based on four dimensions: landed cost, supply chain risk, sustainability, and supplier relationships. These criteria are aggregated through an additive value model using stakeholder-derived weights.

The results show that Europe generally represents the most favorable sourcing region across most evaluated scenarios when multiple decision dimensions are considered simultaneously. Although Asia-Pacific sourcing can provide lower unit costs, Europe maintains an overall advantage due to lower transportation costs, reduced risk exposure, and lower emissions. This advantage becomes even more pronounced under short due date conditions, where the need for air freight significantly increases both transportation costs and environmental impact for Asia-Pacific sourcing.

Overall, the model provides a tool for evaluating sourcing decisions from a holistic perspective rather than relying solely on costs. The proposed model contributes to more consistent, data-driven, and strategically aligned sourcing decisions within AVS.

Popular Abstract

Choosing the Right Supplier: The Cheapest Option is Not Always the Best

How should European companies choose between low-cost suppliers in Asia and nearby options in Europe? This thesis shows that smarter sourcing decisions require balancing cost, risk, and sustainability.

Global supply chains give companies access to suppliers across the world, but they also make decision-making more complex. This thesis explores how Trelleborg AB can improve its sourcing of metal components, where decisions have traditionally been made mainly based on price and past supplier experience from the person placing the order. The problem is that such decisions risk overlooking important factors like lead time, risk, and environmental impact. As a result, purchasing decisions can become inconsistent across different production sites and may fail to support long-term strategic goals.

To address this, the study develops a decision-support model that evaluates suppliers from a broader perspective. Instead of focusing only on price, the model combines four key dimensions: total cost, supply chain risk, sustainability in terms of $CO_2e$ emissions, and the strategic importance of the supplier relationship. In simple terms, the model helps decision-makers compare different suppliers in a structured and transparent way.

One of the most interesting results of the model is that Europe often turns out to be the most favorable sourcing region overall, even though suppliers in the Asia-Pacific region typically offer lower unit prices. The reason is that longer transportation distances increase both cost and emissions, and in time-sensitive situations the need for air freight can drastically increase both expenses and emissions further. This means that a supplier that initially appears cheaper may become less desirable when all factors are considered. The study also shows that sustainability is expected to play an increasingly large role, further benefiting European suppliers.

The problem addressed in this thesis is therefore highly relevant. Companies today operate in a world where supply chains are more vulnerable to disruptions, regulations on emissions are tightening, and customers increasingly expect sustainable solutions. Making better sourcing decisions is not only about saving money, but also about reducing risks, ensuring reliable deliveries, and meeting future environmental requirements.

In practice, the model developed in this thesis can be used as a decision tool to support purchasers in their daily work. It reduces reliance on individual experience and enables more consistent, data-driven decisions across different sites. At the same time, it provides insight into how trade-offs between cost, risk, and sustainability affect the final outcome. This can help companies make more informed strategic choices and improve coordination within the organization.

Overall, the thesis demonstrates that sourcing is not just about finding the lowest price. Instead, it is about balancing multiple factors to make better and more sustainable decisions in an increasingly complex global environment.

• author: Olsson, Hanna and Berggren, Agnes
• supervisor: Danja Sonntag
• organization: Department of Industrial and Mechanical Sciences; Production Management
• course: MIOM05 20261
• year: 2026
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Strategic Sourcing, Multi-Criteria Decision-Making, Decision Support Model
• other publication id: 26/5341
• language: English
• id: 9230911
• date added to LUP: 2026-06-03 18:26:43
• date last changed: 2026-06-03 18:26:43