Supplier Selection: Impact of Multi-Tier Supplier Visibility

December 7, 2015 Posted by admin

Festus O. Olorunniwo*, Joel K. Jolayemi and Chunxing Fan
Department of Business Administration, College of Business
Tennessee State University, 330 10th Ave. N
Nashville, TN 37203, USA

Abstract
This paper addresses the practice of maintaining lower-tier supplier visibility (LTSV) whereby an Original Equipment Manufacturer (OEM) may select its firsttier suppliers by taking into account the performance and capabilities of their lower-tier suppliers. The paper divides the participating companies into LTSV and non-LTSV firms, depending on whether they maintain lower-tier visibility on their suppliers or not, respectively. Then, with respect to four types of suppliers (strategic, custom, collaborative, and commodity), the paper examines the importance of several evaluation criteria for LTSV and non-LTSV firms. Three research issues were addressed. The first examines the decreasing order of importance of the evaluation criteria for LTSV firms and non-LTSV firms. The second examines whether LTSV firms have significantly different expectations of some of the evaluation criteria compared to non-LTSV firms. The third explores whether the significant differential expectations, if they exist, are maintained for a given evaluation criterion across all types of supplier segments. The findings constitute recommendations for good practice especially for companies seeking multi-tier supplier visibility.

Keywords: Supply Chain Management, Supplier Relationship Management, Supplier Segmentation, Supplier Evaluation.

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