Exploring the importance of different supplier selection criteria

Abstract

Purpose – Supplier selection studies have used a wide variety of supplier evaluation criteria, due to the diversity of the purchasing context. The purpose of this study is to identify the critical supplier selection criteria which are important across industries and across purchasing contexts, and subsequently estimate the importance of these criteria to the procurement practitioners. Design/methodology/approach – First, a Delphi study has been conducted to identify the critical supplier selection criteria across manufacturing industries. Then, data were collected from 188 firms across 12 industries and analysed with fuzzy analytic hierarchy process for group decision making, to estimate the relative importance of these criteria. Findings – Findings indicate that seven criteria are of critical importance to Indian manufacturing industries. Also evaluation criteria like product quality, delivery compliance and price have maximum criticality, while criterion like e-transaction capability is gaining in importance, with the increased adoption of e-procurement platforms. Research limitations/implications – The study has been conducted in India, while focusing on Indian manufacturing industries. Similar study conducted in developed economies may produce different results. Practical implications – Findings will be useful for practitioners for benchmarking supplier selection processes, not only in India, but also in similar emerging economies. Also, the outcome will provide insights for suppliers for developing systemic improvements. Originality/value – There has been no study in recent years which has attempted to estimate the importance of supplier selection criteria, while taking a multi-industry approach. This study identifies the critical evaluation criteria and estimates their relative importance to procurement experts.