Supplier Selection

The members of the buying centre now review the proposals and choose a supplier or suppliers. In the time period of supplier selection, the buying centre frequently will draw up a list of the wanted supplier attributes and their relative significance. In one survey, purchasing executives listed the following attributes as most significant in influencing the relationship between customer and supplier: quality products & services, on-time of delivery, ethical corporate behaviour, honest communication, and competitive cost. Other significant factors include repair and servicing capabilities, technical aid and suggestion, performance history, geographic location, and reputation. The members of the buying centre shall rate suppliers against these attributes and recognizes the best suppliers.

As part of the buyer selection procedure, buying centres ought to decide how many suppliers to use. In the past, various companies preferred a big supplier base to ensure adequate supplies and to get price concessions. These companies would claim on annual negotiations for contract renewal and would  frequently  shift  the  amount  of  business  they  gave  to  each  supplier  from  year  to  year. Progressively more, however, companies are reducing the number of suppliers. There is a trend even toward single sourcing, by using one supplier. With single sourcing there is just one supplier to handle and it is simpler to control newsprint inventories. By using one source not just can translate into more consistent product performance, but also it permit press rooms to configure themselves for one specific kind of newsprint rather than changing presses for papers with different attributes.

Various companies, however, are still reluctant to utilized single sourcing. They panic that they can become too dependent on the single supplier or that single-source supplier can become too comfortable in the relationship and lose its competitive edge. Some of the marketers have developed programs that address these concerns.