Supplier Selection

The members of the buying centre now review the proposals and select a supplier or suppliers. During supplier seleetion, the buying centre will often draw up a list of the desired supplier attributes and their relative importance. In one survey, purchasing executives listed the following attributes as most important in influencing the relationship between supplier and customer: quality products and services, on-time delivery, ethical corporate behaviour, honest communication supplier selection The stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers.

Table 7.2

An example of vendor analysis

An example of vendor analysis

order-routine specification

The stage of the business buying process in which the buyer writes the final order with the chosen suppliers(s), listing the technical specifications, quantity needed, expected time of delivery, return policies and warranties.

and competitive prices.2-1 Other important factors include repair and servicing capabilities, technical aid and advice, geographic location, performance history and reputation. The members of the buying centre will rate suppliers against these attributes and identify the best suppliers. They often use a supplier evaluation method similar to the one shown in Table 7.2.

The importance of various supplier attributes depends on the type of purchase situation the buyer faces.24One study of 220 purchasing managers showed that economic criteria were most important in situations involving routine purchases of standard products. Performance criteria became more important in purchases of non-standard, more complex products. The supplier's ability to adapt to the buyer's changing needs was important for almost all types of purchase.

Buyers may attempt to negotiate with preferred suppliers for better prices and terms before making the final selections. In the end, they may select a single supplier or a few suppliers. Many buyers prefer multiple sources of supplies to avoid being totally dependent on one supplier and to allow comparisons of prices and performance of several suppliers over time.

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