Supplier Selection and Assessment: Their Impact on Business Performance

Abstract

SUMMARY Increasingly, firms are allocating more resources to their core competencies and encouraging the outsourcing of non‐core activities, which increases their reliance and dependence on suppliers. This increases the importance of effective supplier selection and assessment. Sparse evidence exists regarding the impact of supplier selection and assessment on a buying firm's business performance. This research describes an empirical study of the importance of supplier selection and assessment criteria of American manufacturing companies for items to be used in products already in production. Moreover, it identifies relationships between criteria and a buying firm's business performance. Results indicate that soft, non‐quantifiable selection criteria, such as a supplier's strategic commitment to a buyer, have a greater impact on performance than hard, more quantifiable criteria such as supplier capability, yet are considered to be less important. Assessment of a supplier's willingness and ability to share information also has a significant impact on the buying firm's performance, yet is again considered to be relatively unimportant.

Whose Choice Is It? The Role of Attitude in Determining Customer’s Intention to Use the Courier

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“…Based on research by Cakravastia and Takahashi (2004); Kannan and Tan (2002), indicate that a measure of the perceived quality of courier based on the timeliness, costs (freight rates and prices) and risk (reliability, losses, and collateral). Research Fawceet et al (1996) indicate that the performance of the shipping service affected by the delivery of fast, reliable, high-quality service, responsiveness, innovative, and competitive pricing.…”

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“…This increase in supplier dependence has highlighted the need to enhance the approaches to supplier management. Effective supplier selection, innovative supplier development and meaningful supplier performance assessment have become key competencies needed for success (Kannan and Tan 2002).…”

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“…However, technology only enables information exchange; humans are the source of information and the drivers of technology. Consequently, people still play the pivotal role in supply chain environments and the relationship between buyers and suppliers remains a vital element of a successful supply chain (see, for example, Kannan, 2002;Mariotti, 1999).…”