Supplier selection and development: The relationship between small manufacturing enterprises and mass merchandisers

Abstract

This study examines the results of a program intended to act as a selection tool for mass merchandisers and a development tool for small manufacturers. The evaluation program assessed the management practices and products of potential suppliers. Based on past experience, buyers for mass merchandisers consider small manufacturing enterprises a poor risk as potential suppliers of retail goods. As part of the evaluation process, firms were asked 34 closed-end questions regarding their management practices, and each product was evaluated on 41 specific qualities necessary for the mass merchandising market. Of the 1,690 firms that participated in this project, about 5 percent had their products accepted by a national mass merchandiser. A review of the evaluation data reveals that firms needed high performance in both areas of evaluation to be successful in the marketplace, not just a strong firm or a marketable product. However, each of these areas separately had a statistically significant effect on the success of the product in gaining a retail buyer’s attention.