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Support Tool for Supplier Evaluation and Selection
The supplier selection process is considered one of the most relevant decisions in supply chain management due to its effect on the product quality and on buyer performance. Supplier selection is often unstructured, and is generally based on the lowest-price proposal. However, this type of selection involves a high risk, sometimes resulting in project delays, poor quality of acquired goods, and large financial losses. Price is undoubtedly an important criterion when choosing a supplier; however, other equally important criteria must be considered. Therefore, supplier selection should be formulated as a multi-criteria decision-making (MCDM) problem.
2. The Supplier Selection Problem
3. Supplier Selection Criteria
|Quality||The capability to offer products that conform to specifications, meet customer requirements and government regulations. It relates to the use of quality systems and continuous improvement programs, material and process control, maintenance and calibration, planning, and staff training.|||
|Delivery||Refers to the duration of time from placing to receiving an order (lead time), on-time delivery (as per time scheduled), and delivery reliability. In addition, the delivery conditions are also important, that is, product presentation, cleanliness and packaging, and provision of the standard documentation required throughout the process.|||
|Cost||Includes the costs of transportation, inventory, material, maintenance, labour, and other elements related to product manufacturing. Thus, this attribute considers the total estimated cost for each alternative.Can be represented by productivity. Higher productivity indicate a greater supply, cost, and production control ability, better operating management efficiency, and better customer acceptance.|||
|Relationship||Concerns to the ability of the buyer and the supplier to complement each other’s capabilities in order to maintain a long-term partnership with few reliable suppliers. The ability to maintain a good communication channel and a long-term relationship buyer-supplier is essential and they can even present a differential advantage when selecting a supplier.|||
|Facilities and capacity||Evaluates the capacity of the firm to provide specific solutions to achieve the technical requirements and the company’s desired specification. To this end, a proper infrastructure and resources, an undated assets maintenance (vehicles and equipment), and suitable work stations and physical location are required.|||
|Service||Indicates the after-sales service level provided by the seller. It can include the supplier’s service level in terms of lead time, flexibility, and customer service.|||
|Flexibility||Indicates the ability to adjust product volume, product mix, product characteristics, or manufacturing processes as demanded by the buyer, using existing machines or equipment.|||
|Culture||Relates to the generation of trust, both within the organization and among members in the supply chain, and to the management attitude towards the supplier, which allows him/her to successfully face unexpected future events.|||
|Geographical location||It indicates how far the supplier is located from the company.|||
|Performance history||Previous experiences in providing the service can influence future firm performance.|||
|Financial status||The supplier’s financial situation and stability and payment conditions are important factors to consider in this category.|||
|Innovation||The capability of develop R&D activities in order to improve differentiation while reducing costs. Usually, a higher R&D expense on sales denotes stronger technology ability .|||
|ENVIRONMENTAL||The presence of environmental controls and programs that ensure environment-friendly product characteristics.
Hamdan and Cheaitou  classify these factors into two groups: product-related and organization-related. The first group relates to the use of environment-friendly resources and materials, as well as advanced technologies for recycling materials, to produce environment-friendly items. The second group relates to awareness about the environmental issues pertaining to the operations, structure, and culture of the organization.
It refers to the existence of policies that enable the vendor to follow environmental norms.
|SOCIAL (safety)||The supplier’s concern about accidents, and the provision of a safe and healthy working environment. Security is one of the most important criteria, because accidents have a significant social, environmental, and financial impact.|||
This entry is adapted from 10.3390/su132212387
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