Strategic supplier performance evaluation::a case-based action research of a UK manufacturing organisation

Abstract

The main aim of this research is to demonstrate strategic supplier performance evaluation of a UK-based manufacturing organisation using an integrated analytical framework. Developing long term relationship with strategic suppliers is common in today׳s industry. However, monitoring suppliers׳ performance all through the contractual period is important in order to ensure overall supply chain performance. Therefore, client organisations need to measure suppliers׳ performance dynamically and inform them on improvement measures. Although there are many studies introducing innovative supplier performance evaluation frameworks and empirical researches on identifying criteria for supplier evaluation, little has been reported on detailed application of strategic supplier performance evaluation and its implication on overall performance of organisation. Additionally, majority of the prior studies emphasise on lagging factors (quality, delivery schedule and value/cost) for supplier selection and evaluation. This research proposes both leading (organisational practices, risk management, environmental and social practices) and lagging factors for supplier evaluation and demonstrates a systematic method for identifying those factors with the involvement of relevant stakeholders and process mapping. The contribution of this article is a real-life case-based action research utilising an integrated analytical model that combines quality function deployment and the analytic hierarchy process method for suppliers׳ performance evaluation. The effectiveness of the method has been demonstrated through number of validations (e.g. focus group, business results, and statistical analysis). Additionally, the study reveals that enhanced supplier performance results positive impact on operational and business performance of client organisation.