Chapter 3: Best Practices of the Supplier Base Management
Supply Base Management (SBM) is a systematic dynamic approach for strategically managing the whole supply base which might include current suppliers, minor suppliers and potential suppliers (Melnyk, 2009).
This Section describes the literature work carried out for this dissertation. The aim of carrying out this literature work is to develop a theoretical process for SBR. In order to fulfil the aim, this section is divided into three as briefed below.
• Literature related to Supplier Selection
• Existing tools and different practices for SBR
• Develop a theoretical(theoretical) process for SBR
3.1 Supplier Selection
Supplier selection is the process by which industries identify, evaluate, and contract with suppliers. The supplier selection process deploys a tremendous amount of a firm’s financial resources. In return, firms expect significant benefits from contracting with suppliers offering high value. Supplier selection is carried out by the sourcing team of an organization. Theoretically there are six basic approaches for strategic sourcing framework as briefed in the below figure 3.0. Suppliers are selected based on various …show more content…
According to Tahriri, the analyses of criteria for selection of suppliers have become the most important function and it has grabbed the attention of a number of purchasing managers (Tahriri, 2008). This rising importance of supplier selection decision is because of the increased globalization the world is going through, the increase in value of purchased components as percentage of total revenue for manufacturing firms. Beneton points out that the percentage of total revenue is 40 to 80% and lastly the expansion of companies’ supply chain processes in a way that it incorporates suppliers or customers that are geographically
Supply Base Management (SBM) is a systematic dynamic approach for strategically managing the whole supply base which might include current suppliers, minor suppliers and potential suppliers (Melnyk, 2009).
This Section describes the literature work carried out for this dissertation. The aim of carrying out this literature work is to develop a theoretical process for SBR. In order to fulfil the aim, this section is divided into three as briefed below.
• Literature related to Supplier Selection
• Existing tools and different practices for SBR
• Develop a theoretical(theoretical) process for SBR
3.1 Supplier Selection
Supplier selection is the process by which industries identify, evaluate, and contract with suppliers. The supplier selection process deploys a tremendous amount of a firm’s financial resources. In return, firms expect significant benefits from contracting with suppliers offering high value. Supplier selection is carried out by the sourcing team of an organization. Theoretically there are six basic approaches for strategic sourcing framework as briefed in the below figure 3.0. Suppliers are selected based on various …show more content…
According to Tahriri, the analyses of criteria for selection of suppliers have become the most important function and it has grabbed the attention of a number of purchasing managers (Tahriri, 2008). This rising importance of supplier selection decision is because of the increased globalization the world is going through, the increase in value of purchased components as percentage of total revenue for manufacturing firms. Beneton points out that the percentage of total revenue is 40 to 80% and lastly the expansion of companies’ supply chain processes in a way that it incorporates suppliers or customers that are geographically