Case Study:The supplier selection process is a critical activity within the operations of a company. Once the outsourcing decision is taken, a process aimed at analyzing and choosing the appropriate suppliers begins.

Suppose that you are a Procurement Analyst in a large company, create a proposal to the Chief Procurement Officer identifying the best supplier to outsource, for a 3-year period, a complex part of your company's value chain. Your company operates in a mature market where the qualifying and winning factors are quality and time to customer respectively.

Based on the information included in the table, address the following questions:

• What supplier would you select?
• What is your rationale for your election?
• What supplier would you select if your company's factors changed to price and quality?Would your election change?

Supplier

Price

Quality

Delivery

Others

A

90

90

95

Overseas supplier

(transport lead time 3 weeks)

B

105

100

100

Supplier facing financial issues

C

85

85

95

Proximity supplier

(transport lead time 3 hours)

*Figures are expressed in % as follows:

• Price: price quoted by supplier vs. outsourcing company target price
• Quality: parts accepted vs. parts delivered
• Delivery: parts delivered on time vs. parts delivered