STRATEGIC PURCHASING

Role of Supplier Selection



Introduction3

Role of Procurement Managers4

Best Value4

Reasons for selecting new suppliers5

Core Competency of Potential Suppliers5

Out Sourcing6

Off Shoring6

Location of Supplier7

Cost Saving8

Disadvantages of Off Shoring8

The Basic Trade Off9

Risks in Supply Markets12

Conclusion13

References14

Role of Supplier Selection

Introduction

The aspect of supplier selection has greatly increased in the context of supply chain management as an incorrect selection of suppliers would be highly detrimental for the organization's fortunes. Many organizations devote a high degree of attention to the aspect of supplier selection since appropriate selection of suppliers goes a long way in satisfying customers as well as retaining them (Gulen, 2007).

Contemporary markets are characterized by cut throat competition, international competitors, highly demanding customers as well as the rapid advancement of technology. All these factors need to be considered by organizations in their selection of suppliers as these factors have high implications in the context of supplier selection. Many products today are characterized by shorter product life cycles and thus this factor needs to be considered by organizations looking for supplier procurement (Inemek & Tuna, 2009).

With the emergence of these factors, many organizations now are looking to enhance their core competency and have used the outsourcing concept for supplier procurement. Earlier, organizations were keener to produce on a massive scale and there was a lack of focus on an organization's core competency. However, in the case of contemporary markets, organizations now have realized the importance of accurate supplier selection amid excessive competition (Gulen, 2007).

There has been a massive increase in the context of supplier involvement as many organizations now measure their success on the quality of their suppliers. Efficient suppliers play a major role in the enhancement of an organization's core competency by manufacturing products according to the customer's needs. Strategic suppliers have been known to add significant value to an organization's processes and thus procurement managers need to devote a high degree of attention to each minute element in the context of suppliers (Inemek & Tuna, 2009).

We would identify and discuss the major strategic decisions, procurement managers need to consider in the process of supplier selection. Procurement managers need to devote appropriate attention to these issues as these decisions have a high degree of significance in the context of supplier selection. In addition, we would also discuss the pros and cons of strategies employed in the process of supplier selection.

Role of Procurement Managers

The duties performed by procurement managers increase in the context of supplier selection as they are the ones responsible for selecting the most effective suppliers in the context of their organization. The process of selecting suppliers has a high degree of significance since it involves excessive dollar values. With such a huge amount on the line, it has become increasingly important to consider the essence of suppliers as suppliers have a significant role to play in organization's success (Wu & Zhang, 2013).

The nature of job of a procurement manager is highly challenging since many companies now have looked to outsource their ...