Critical Success Factors for Supplier Selection

Journal of Applied Business Research

Volume 20, Number 2

Critical Success Factors For Supplier Selection: An Update

S. Hossein Cheraghi (E-mail: hossein.cheraghi@wichita.edu), Wichita State University Mohammad Dadashzadeh (E-mail: dadashza@oakland.edu), Oakland University Muthu Subramanian (E-mail: muthu.subramanian@demantra.com), Demantra Inc.

Abstract For many organizations effective supplier evaluation and purchasing processes are of vital importance. As the pace of market globalization quickens, the number of potential suppliers and the number of factors to consider when selecting suppliers increases. In this paper we present the critical success factors (CSFs) for supplier selection reported in the literature emanating from the seminal work of Dickson and provide an update based on reviewing more than 110 research papers. Our study indicates significant change in the relative importance of various critical success factors in the research reported during 1966-1990 versus 1990-2001. Increased competition and globalization of markets facilitated by Internet-based technologies have combined to dramatically change the ranking of factors while introducing new criteria to the supplier selection process. Based on the results of this study, we conclude that supplier selection criteria will continue to change based on an expanded definition of excellence to include traditional aspects of performance (quality, delivery, price, service) in addition to non-traditional, evolving ones (just-in-time communication, process improvement, supply chain management).

1. Introduction

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n a 1993 Focus Study from Center for Advanced Purchasing Studies (CAPS), Carter and Narasimhan (1993) concluded: “The research presented in this report demonstrates dramatically that purchasing issues, strategies, and tactics are just as important as marketing, finance, accounting, and operational issues even though purchasing is first in the value chain and „furthest‟ from the actual...