Exploring Supplier Selection Approaches: South African Small and Medium Enterprise Perspectives

Abstract

As competition in the 1990s intensified and markets became global, so did the challenges associated with getting a product and service to the right place at the right time at the lowest cost. The ultimate success of SMEs (small and medium enterprises) depends on their management's ability to integrate their intricate network of business relationships when selecting suppliers. The primary objective of this study is to explore the supply selection approaches of SMEs in Nelson Mandela Bay, South Africa. The quantitative research method was used. A convenient non-probability sample of 243 SMEs were chosen. Self-administered questionnaires were distributed to respondents. The questionnaire was piloted to 10 respondents. Data was analysed with the Statistica 10 computer package using descriptive statistics, frequency distributions, and ranking of variables. Face and content validity were ensured and Cronbach's alpha values confirm the internal reliability of the questionnaire. It was found that SMEs indeed pay some attention to various supplier selection criteria-e.g. quality of products and services, delivery, and time. They buy from multiple suppliers and, to a lesser extent, from local suppliers due to various reasons. The results show that a coordinated approach to supplier selection is required for effective purchasing.