Strategies for supplier evaluation: a framework for potential advantages and limitations

A framework for supplier evaluation is developed based on whether the supplier evaluation focuses on information from product- or process-based domains and whether the information acquisition mode used is direct or indirect.

Abstract

Despite the increase in use of supplier evaluation, there is still very limited examination of the supplier evaluation process. Most of the discussion that is in the literature treats information about suppliers as factual, technical information without regard for the social and organizational biases involved in generating this information. This paper presents a framework for examining the process of supplier evaluation based on our research and observations. A framework for supplier evaluation is developed based on whether the supplier evaluation focuses on information from product- or process-based domains and whether the information acquisition mode used is direct or indirect. A critical examination of these four approaches to supplier evaluation is presented. In doing so, various advantages and limitations related to each approach are identified. Furthermore, the relationship between the evaluation approach and organizational realities are discussed. Finally, the need for an integrated mechanism within organizations to deal with supplier information is identified.