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. You have been asked to 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