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Understanding trade-offs in the supplier selection process: The role of flexibility, delivery, and value-added services/support

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  • van der Rhee, Bo
  • Verma, Rohit
  • Plaschka, Gerhard

Abstract

In this study, we present, based on econometric choice modeling framework, how manufacturing managers/executives trade-off between cost, delivery, flexibility, and service features in the supplier selection process for commodity raw materials, given acceptable quality. Empirical data for this study was collected from manufacturing organizations in Europe (Germany, France, Italy, and UK) using a computer-based supplier selection discrete choice survey. Each survey instrument contained 16 supplier selection choice sets, which compared 23 attributes of the current suppliers with a "new" potential supplier. The attributes of new suppliers were varied across two to four levels using established factorial experimental design procedures. The resultant multinomial logit models show the relative impact of cost, flexibility, delivery and service features on supplier selection.

Suggested Citation

  • van der Rhee, Bo & Verma, Rohit & Plaschka, Gerhard, 2009. "Understanding trade-offs in the supplier selection process: The role of flexibility, delivery, and value-added services/support," International Journal of Production Economics, Elsevier, vol. 120(1), pages 30-41, July.
    • Handle: RePEc:eee:proeco:v:120:y:2009:i:1:p:30-41
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    6. Hayk Manucharyan, 2020. "Supplier selection in emerging market economies: a discrete choice analysis," Working Papers 2020-11, Faculty of Economic Sciences, University of Warsaw.
    7. Zhang, Ju-liang & Zhang, Ming-yu, 2011. "Supplier selection and purchase problem with fixed cost and constrained order quantities under stochastic demand," International Journal of Production Economics, Elsevier, vol. 129(1), pages 1-7, January.
    8. Prajogo, Daniel & Chowdhury, Mesbahuddin & Yeung, Andy C.L. & Cheng, T.C.E., 2012. "The relationship between supplier management and firm's operational performance: A multi-dimensional perspective," International Journal of Production Economics, Elsevier, vol. 136(1), pages 123-130.
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    10. Maestrini, Vieri & Luzzini, Davide & Maccarrone, Paolo & Caniato, Federico, 2017. "Supply chain performance measurement systems: A systematic review and research agenda," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 299-315.

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