Decision Making: Selection of Suppliers

The supplier selection process is quite complex due to the wide range of unpredictable and uncontrollable factors, and thus, it requires wise decision-making addressing the arising issues. Besides the cost, considered the primary basis for this choice, there exists a row of crucial parameters. In the following paper, the research findings will be summarized as for the supplier selection criteria that implements for the best-practice supplier selection process. Overall, analysis of the literature on the study subject suggests the conclusion that it is important to evaluate the candidates against the following criteria: quality, service, expertise, risk factors, and delivery.

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First, the selection of suppliers amounts to choosing a partner providing high-quality raw materials or constitute parts. The quality of resources presented by a supplier is one of the major variables affecting the ultimate quality of a company product (Heizer & Render, 2011). According to Heizer and Render (2011), the quality of supplier’s product is to be evaluated from the point of view of the level of defects, manufacturing maintenance, safety matters, and training.

Next, the level of service is another vital criterion for the choice of suppliers. While making choices regarding cooperation with a particular supplier, a company needs to check these aspects: (1) customer service; (2) responsiveness; (3) order acceptance, processing, and fulfillment; and (4) potential ability to optimize the cooperation process through the e-commerce (Kontis & Vrysagotis, 2011). The level of service provided by a supplier in its turn directly influences the level of service that the company provides to the customers (Kontis & Vrysagotis, 2011)

Further, expertise is yet another criterion significant for the selection of suppliers. Expertise capability of a supplier firm needs to be assessed in terms of network capabilities, production capabilities, the technical level of manufacturing or raw materials extraction, and the spread of technical preparation (Ozaki, Lo, Kinoshita, & Tzeng, 2012).

In addition, the risk the supplier is taking is one more considerable parameter for the supplier selection decision-making process. If supplier takes too many risks, buyers are exposed to the same multiple risks (Thompson & Martin, 2010). The following aspects in regards to this criterion need assessment: insurance, legislations, currency exchange, and trade relations (Thompson & Martin, 2010).

Finally, the delivery criterion is the last but not the least variable that affects the proper decision-making in the area of supplier choice. The main aspects connected with the delivery criterion are on-time delivery and lead time (Kontis & Vrysagotis, 2011).

Speaking about the criteria for the supplier selection, it is important to remember that the complexity of this process places a high demand on a business player to consider a variety of additional factors connected with the specific problems that may take place. In this vein, one may address the following aspects: (1) potential for the long-time relations; (2) management capability; (3) financial status; (4) responsiveness to the buyer’s needs; (5) operational performance; (6) behaviors and cultural factors; and (7) environmental compliance (Kontis & Vrysagotis, 2011).

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In conclusion, it should be stated that the main criteria for supplier selection apart from the cost are quality, service, expertise, risk factors, and delivery. The optimal choice of suppliers occurs only at the intersection of these variables. Therefore, the company employees responsible for the supplier selection decision-making should be educated on conducting an assessment of all the factors narrated above.

References

Heizer, J. & Render, B. (2011). Operations management (10th ed.). London: Pearson. Web.

Kontis, A., & Vrysagotis, V. (2011). Supplier selection problem: A literature review of multi-criteria approaches based on DEA. Advances in Management and Applied Economics, 1(2), 207-219. Web.

Ozaki, T., Lo, M., Kinoshita, E., & Tzeng, G. (2012). Decision-making for the best selection of suppliers by using minor ANP. Journal of Intelligent Manufacturing,23(6), 2171-2178. Web.

Thompson, J., & Martin, F. (2010). Strategic management awareness & change (6th ed.). London: Cengage Learning. Web.

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