Selection of Strategic Suppliers for Partnership: A Model with Two Stages Approach
Strategic partnerships with suppliers play a vital role for the long-term value-based supply chain. This strategic collaboration keeps still being one of the top priority of many business organizations in order to create more additional value; benefiting mainly from supplier’s specialization, capacity and innovative power, securing supply and better managing costs and quality. However, many organizations encounter difficulties in initiating, developing and managing those partnerships and many attempts result in failures. One of the reasons for such failure is the incompatibility of members of this partnership or in other words wrong supplier selection which emphasize the significance of the selection process since it is the beginning stage. An effective selection process of strategic suppliers is critical to the success of the partnership. Although there are several research studies to select the suppliers in literature, only a few of them is related to strategic supplier selection for long-term partnership. The purpose of this study is to propose a conceptual model for the selection of strategic partnership suppliers. A two-stage approach has been used in proposed model incorporating first segmentation and second selection. In the first stage; considering the fact that not all suppliers are strategically equal and instead of a long list of potential suppliers, Kraljic’s purchasing portfolio matrix can be used for segmentation. This supplier segmentation is the process of categorizing suppliers based on a defined set of criteria in order to identify types of suppliers and determine potential suppliers for strategic partnership. In the second stage, from a pool of potential suppliers defined at first phase, a comprehensive evaluation and selection can be performed to finally define strategic suppliers considering various tangible and intangible criteria. Since a long-term relationship with strategic suppliers is anticipated, criteria should consider both current and future status of the supplier. Based on an extensive literature review; strategical, operational and organizational criteria have been determined and elaborated. The result of the selection can also be used to determine suppliers who are not ready for a partnership but to be developed for strategic partnership. Since the model is based on multiple criteria for both stages, it provides a framework for further utilization of Multi-Criteria Decision Making (MCDM) techniques. The model may also be applied to a wide range of industries and involve managerial features in business organizations.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1316700Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 562
 Y. J. Chen, “Structured methodology for supplier selection and evaluation in a supply chain,” Inf. Sci. (Ny)., vol. 181, no. 9, pp. 1651–1670, 2011.
 A. Trautrims, B. L. MacCarthy, and C. Okade, “Building an innovation-based supplier portfolio: The use of patent analysis in strategic supplier selection in the automotive sector,” Int. J. Prod. Econ., no. March, pp. 1–9, 2017.
 J. Chai and E. W. T. Ngai, “Multi-perspective strategic supplier selection in uncertain environments,” Int. J. Prod. Econ., vol. 166, pp. 215–225, 2015.
 J. S. Randhawa and I. S. Ahuja, “Examining the role of 5S practices as a facilitator of business excellence in manufacturing organizations,” Meas. Bus. Excell., vol. 21, no. 2, pp. 191–206, 2017.
 P. K. Dey, A. Bhattacharya, and W. Ho, “Strategic supplier performance evaluation: A case-based action research of a UK manufacturing organisation,” Int. J. Prod. Econ., vol. 166, 2015.
 J. R. Carter and T. Y. Choi, Foundation of Supply Management. Institute for Supply Management Professional Series, 2008.
 D. Chicksand, “Industrial Marketing Management Partnerships : The role that power plays in shaping collaborative buyer – supplier exchanges,” Ind. Mark. Manag., vol. 48, pp. 121–139, 2015.
 “Supplier Relationship Management - How key suppliers drive your company’s competitive advantage,” PwC, 2013.
[Online]. Available: https://www.pwc.nl/nl/assets/documents/pwc-supplier-relationship-management.pdf.
 S. S. Padhi, S. M. Wagner, and V. Aggarwal, “Positioning of commodities using the Kraljic Portfolio Matrix,” J. Purch. Supply Manag., vol. 18, no. 1, pp. 1–8, 2012.
 “Supplier Relationship Management (SRM) - Identifying and maximising the value of strategic supplier partnering,” Deloitte AG., 2015.
[Online]. Available: https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/process-and-operations/ch-en-operations-supplier-relationship-management.pdf.
 J. Rezaei and R. Ortt, “Supplier segmentation using fuzzy logic,” Ind. Mark. Manag., vol. 42, no. 4, pp. 507–517, 2013.
 R. T. Montgomery, J. A. Ogden, and B. C. Boehmke, “A quantified Kraljic Portfolio Matrix: Using decision analysis for strategic purchasing,” J. Purch. Supply Manag., 2017.
 A. Dubois and A. C. Pedersen, “Why relationships do not fit into purchasing portfolio models a comparison between the portfolio and industrial network approaches,” Eur. J. Purch. Supply Manag., vol. 8, no. 1, pp. 35–42, 2002.
 C. J. Gelderman, “Purchasing Portfolio Models : A Critique and Update,” J. Supply Chain Manag., no. August, pp. 19–28, 2005.
 P. Kraljic, “Purchasing must become supply management,” Harv. Bus. Rev., vol. Sept-Oct, pp. 109–117, 1988.
 A. Wetzstein, E. Hartmann, W. C. Benton, and N. Hohenstein, “A systematic assessment of supplier selection literature – State-of-the- art and future scope,” Intern. J. Prod. Econ., vol. 182, pp. 304–323, 2016.
 D. Simić, I. Kovačević, V. Svirčević, and S. Simić, “50 years of fuzzy set theory and models for supplier assessment and selection: A literature review,” J. Appl. Log., vol. 24, pp. 85–96, 2016.
 C. Araz and I. Ozkarahan, “Supplier evaluation and management system for strategic sourcing based on a new multicriteria sorting procedure,” Int. J. Prod. Econ., vol. 106, no. 2, pp. 585–606, 2007.
 R. Florez-Lopez, “Strategic supplier selection in the added-value perspective: A CI approach,” Inf. Sci. (Ny)., vol. 177, no. 5, pp. 1169–1179, 2007.
 E. Sucky, “A model for dynamic strategic vendor selection,” Comput. Oper. Res., vol. 34, no. 12, 2007.
 O. Famuyiwa, L. Monplaisir, and B. Nepal, “An integrated fuzzy-goal-programming-based framework for selecting suppliers in strategic alliance formation,” Int. J. Prod. Econ., vol. 113, no. 2, 2008.
 S. Sen, H. Basligil, C. G. Sen, and H. Barali, “A framework for defining both qualitative and quantitative supplier selection criteria considering the buyer-supplier integration strategies,” Int. J. Prod. Res., vol. 46, no. 7, pp. 1825–1845, 2008.
 X. Luo, C. Wu, D. Rosenberg, and D. Barnes, “Supplier selection in agile supply chains: An information-processing model and an illustration,” J. Purch. Supply Manag., vol. 15, no. 4, pp. 249–262, 2009.
 C.-Y. Shen and K.-T. Yu, “An integrated fuzzy strategic supplier selection approach for considering the supplier integration spectrum,” Int. J. Prod. Res., vol. 50, no. 3, 2012.
 X. Koufteros, S. K. Vickery, and C. Dröge, “The Effects of Strategic Supplier Selection on Buyer Competitive Performance in Matched Domains: Does Supplier Integration Mediate the Relationships?,” J. Supply Chain Manag., vol. 48, no. 2, 2012.
 A. Aksoy, E. Sucky, and N. Öztürk, “Dynamic Strategic Supplier Selection System With Fuzzy Logic,” Procedia - Soc. Behav. Sci., vol. 109, pp. 1059–1063, 2014.
 R. Govindaraju, M. I. Akbar, and L. Gondodiwiryo, “The Application of a Decision-making Approach based on Fuzzy ANP and TOPSIS for Selecting a Strategic Supplier,” J. Eng. Technol. Sci., vol. 47, no. 4, pp. 406–425, 2015.
 J.-W. Tang and T.-H. Hsu, “A fuzzy preference relations model for evaluating key supplier relationships in TFT-LCD TV panel manufacturing industry,” Manag. Decis., vol. 53, no. 8, pp. 1858–1882, 2015.
 C. Neumüller, R. Lasch, and F. Kellner, “Integrating sustainability into strategic supplier portfolio selection,” Manag. Decis., vol. 54, no. 1, 2016.
 M. Punniyamoorthy, P. Mathiyalagan, and P. Parthiban, “A strategic model using structural equation modeling and fuzzy logic in supplier selection,” Expert Syst. Appl., vol. 38, no. 1, 2011.
 S. H. Huang and H. Keskar, “Comprehensive and configurable metrics for supplier selection,” Int. J. Prod. Econ., vol. 105, no. 2, 2007.
 L. Osiro, F. R. Lima-Junior, and L. C. R. Carpinetti, “A fuzzy logic approach to supplier evaluation for development,” Int. J. Prod. Econ., vol. 153, pp. 95–112, 2014.
 F. R. Lima-Junior and L. C. R. Carpinetti, “Combining SCOR® model and fuzzy TOPSIS for supplier evaluation and management,” Int. J. Prod. Econ., vol. 174, pp. 128–141, 2016.