9. Supplier Performance Evaluation Using Cluster Analysis and Artificial Neural Networks in a MRO Business in Aviation Sector

Supplier performance evaluation includes the assessment of suppliers according to several criteria. Supplier performance evaluation, which is a part of purchasing activities, has gained more importance in recent years. Performance evaluation practices exist in both manufacturing and service sectors. The maintenance and repair overhaul (MRO) sector in the service sector has different characteristics compared to other sectors in terms of purchasing and supply management. MRO enterprises in the aviation sector have fewer suppliers and the pressure on supply management of MRO companies in the aviation sector is higher when compared with other sectors. The literature on supplier evaluation in both the MRO sector and the aviation industry is limited. In this study, it is aimed to propose a new supplier evaluation and classification system using cluster analysis (CA) and artificial neural networks (ANN) methods in an MRO company operating in the aviation industry. Initially, the supplier evaluation and classification system of the company was analyzed. Then a new clustering has been proposed for the company. It is shown that the suppliers can be classified using the proposed methodology for an alternative supplier evaluation.