Selecting Potential Vendors: Criteria-Based Approach

Subject: Management
Pages: 2
Words: 601
Reading time:
3 min
Study level: College

Evidently, the company experiences a shortage of office supplies vendors and requires to find new solutions for a long-term relationship. The previous vendors appeared to be unsuitable because they were chosen without a systematic approach. To resolve this issue, I suggest a system of vendor evaluation based on specific criteria. According to research studies, this strategy can increase performance and successfully integrate good quality partners within the supply chain (Santos et al., 2019). Additionally, the criteria-based approach will accelerate the decision-making process by evaluating participants linearly and logically (Luthra et al., 2017). This memorandum will provide a list of suggested criteria for vendors and an example of another company’s selection system.

Criteria 1: Price/Quality Ratio

The vendor should be capable of supplying products of sufficient quality at a reasonable price. Although the ultimate goal should be to get maximum value for the lowest price, it is essential to monitor if the products are acceptable and sufficiently fulfill their functionality.

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Criteria 2: Sustainability and stability

The company needs to be well-established and supply all of the required goods regularly for an extended period of time. Any unexpected supply shortages, delays, or contract violations are unwanted. If possible, the supplier should be asked about previous experience and years in business.

Criteria 3: Flexibility

The vendor needs to allow changes in orders to handle market variations. The company might expand, change requirements, or modify its orders for other reasons. The supplier should not provide penalties for those alterations since it would be highly unprofitable and inconvenient for longer prospects.

Criteria 4: Substantial Catalogues

The supplier needs to provide an extensive range of products and offer complete solutions for each field. That is required in order to allow flexibility in orders, rationalize the number of vendors and avoid purchasing a small range of products from another supplier.

Criteria 5: Customer service

The staff needs to be polite, professional, and competent at resolving any possible issues. When a problem or an additional request arises, the supplier should be easy to contact. Additionally, the employees should be able to coordinate with the client through its products or services to avoid major misunderstandings.

Criteria 6: Environmental competencies and ethics

The vendor should take environmental considerations at all stages and provide sufficient working conditions for its employees. It would be irresponsible to partner with a company that does not fulfill its social responsibility. Also, it is unethical to support any supplier that incorporates harmful technologies or poor labor conditions.

Criteria 7: Customer reviews and references

The supplier needs to be reliable based on its previous experience with other companies. Requesting several references would ensure transparency in further relationships and provide information about the vendor complying with its commitments.

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A number of companies have already applied the criteria-based approach for selecting their suppliers. In the case study by Stević et al. (2017), an unnamed construction company is shown to monitor the price and quality of the products (Expenses criteria), reliability, reputation, warranty period, and delivery time (Benefit criteria). These categories provide a comprehensive and systematic review of a potential partner and the goods it will supply. I have expanded those criteria with an additional section for corporate ethics for the reason that was explained above.

To summarize, I believe this new criteria-based approach for selecting potential vendors will optimize the search of suppliers and minimize possible issues or contract terminations. The presented criteria were chosen to evaluate both the quality and range of products and the supplier’s reliability based on its current service and previous experience. Should you need more information about this recommendation, do not hesitate to contact me.

References

Luthra, S., Govindan, K., Kannan, D., Mangla, S. K., & Garg, C. P. (2017). An integrated framework for sustainable supplier selection and evaluation in supply chains. Journal of Cleaner Production, 140, 1686–1698. Web.

Santos, G., Murmura, F. and Bravi, L. (2019), Developing a model of vendor rating to manage quality in the supply chain. International Journal of Quality and Service Sciences, 11(1), 34-52. Web.

Stević, Ž., Pamučar, D., Vasiljević, M., Stojić, G., & Korica, S. (2017). Novel integrated multi-criteria model for supplier selection: Case study construction company. Symmetry, 9(11), 279. Web.