An exploration of supplier selection practices across the supply chain

Abstract

The US auto industry has undergone tremendous changes during the past decade. Companies have increased their level of out-sourcing and are relying more heavily on their supply chain as a source of their competitive advantage. Thus, determining which suppliers to include in the supplier chain has become a key strategic consideration. However, previous studies of supplier selection have not considered a company's position in the supply chain. In this paper, we compare supplier-selection practices based on a survey of companies at different levels in the auto industry. Our findings rebut the common thinking that indirect suppliers who are more involved in commodity purchasing emphasize initial price and de-emphasize relational considerations. We learned that selecting suppliers based on the potential for a cooperative, long-term relationship is just as important to direct and indirect suppliers as it is to the auto assemblers. We also learned that price is one of the least important selection items, regardless of position on the supply chain. Further, contrary to the existing understanding that quality and delivery are separate constructs, they formed a single construct in our study. To summarize the empirical results, no differences among the auto assemblers, direct suppliers, and indirect suppliers were found for the importance placed on consistency (quality and delivery), reliability, relationship, flexibility, price, and service. Statistically significant differences were found between the auto assemblers and indirect suppliers on the importance placed on technological capability and financial issues.

Management Practice of Supply Chain Quality Management in Service-oriented Manufacturing Industry

“…Tan et al [13] discussed the commitment involved to integrate channel suppliers, manufacturers, and customers in order to achieve both long-term growth. Collaborative relationships are also topics reviewed by Choi and Hartley [14], Forzaand Filippini [15] Obtaining customer satisfaction (caused construct) requires greater attention to factors which concern downstream relations with customers such as the involvement in quality improvement programs(causing construct=TQM link with customers) Waterson et al [16], Most successful practices for quality improvement: TQM, Team-based groups, Manufacturing Cells and Integrated computer-based technologies. Most common practices: SC partnering, TQM, JIT, team-based working and integrated computer-based technology.…”

Understanding outsourcing contexts through information asymmetry and capability fit

“…These examine why firms outsource (e.g., Hitt and Ireland 1985, Quinn 1999, Que´lin and Duhamel 2003, Holcomb and Hitt 2007, how outsourcing alters the boundary and value of organisations and industries (e.g., McCarthy and Anagnostou 2004), how outsourcing helps firms to develop new products and innovate (Handfield et al 1999, Silvestre andDalcol 2009), the capabilities needed to outsource effectively (e.g., Milgrom and Roberts 1990, Levina and Ross 2003, Oh and Rhee 2008, the process of selecting suppliers (e.g., Choi and Hartley 1996, De Boer et al 2001, Everaert et al 2007, Huang and Keskar 2007 and collaborating with them (e.g., Liker et al 1996, Rich and Hines 1997, Takeishi 2001.…”

A Literature Review on the Linkage between Supply Chain Challenges and Key Success Factors for Small and Medium Size Enterprises

“…Time to market is becoming more and more important. That is supported by the findings that enterprises place more importance on consistency (quality and delivery) and the least importance on price while selecting supplier (Choi, Hartley, 1996;Blackburn, 2012). Supply side cost minimization (in terms of lower cost of suppliers) can result in poor product quality, longer lead times, additional supply chain costs and dissatisfied customers (Omar et al, 2012).…”