Supplier Selection

An often-overlooked part of the procurement process is the initial phase of working with a new supplier and how we can help them get up to speed as quickly as possible to perform effectively for our organisation (CIPS Australia: New Supplier Engagement)

Information about Supplier Selection

Supplier selection, along with supplier evaluation and continuous measurement/assessments, is an important organisational process: purchased products represent between 40% and 60% of end product sales and have a direct impact on the cost and quality of products. In addition, even a small cost gained by selecting a good supplier can have great impact on benefits (Aiter et al., 2011).

Supplier selection relies on multiple assessment techniques which include both quantitative and qualitative methods (Choi and Hartley, 1996). At the same time, many organisations continue to select suppliers based on experience and intuition - selective and unreliable approaches (Kontio, 1996). The most common evaluation criteria used to select suppliers are: financial health, expertise, operational performance metrics, business processes and practices, enabling behaviours or cultural factors and risk factors (Aiter et al., 2011).

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