Analyzing the Process of Supplier Selection Criteria and Methods

Abstract

Supplier selection is the process by which firms identify, evaluate, and contract with suppliers. The supplier selection process deploys an enormous amount of a firm's financial resources and plays crucial role for the success of any organization. The main objective of supplier selection process is to reduce purchase risk, maximize overall value to the purchaser, and develop closeness and long-term relationships between buyers and suppliers. The literature on supplier selection criteria and methods is full of various analytical approaches. Some researchers have developed hybrid models by combining more than one type of selection methods. The current paper provides an overall picture of research on supply chain management, supplier selection criteria and supplier selection evaluation methods (multi-criteria decision making). A summary of the process of supplier selection can be helpful for companies to have a clear understanding of the concept in order to improve their success and competitiveness. The results show that the application of a structured decision-making technique is vital, especially under the complex conditions that include both qualitative and quantitative criteria.