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

Provide a proposal, as the Procurement Analyst, that outlines the issues of the case, states your choice of supplier and provides a rationale for your choice