The Impact of Supplier Selection Criteria and Supplier Involvement on Manufacturing Performance

Abstract

SUMMARY This research investigates the extent to which supplier selection criteria and supplier involvement are used by manufacturers. It also provides support for the claim that firms employing these practices have enhanced supplier and manufacturing performance. Most firms regard the use of supplier selection criteria as an important part of their supplier selection process. Supplier involvement in product design activities and continuous improvement efforts is much lower than the use of supplier selection criteria. The product quality and product performance dimensions of supplier selection criteria plus all of the dimensions of supplier involvement and supplier performance are positively correlated with manufacturing performance. When the sample is divided into high and low manufacturing performers, all the elements of supplier performance and supplier involvement and all but one of the four supplier selection criteria are significantly better for the high performing group than the low performing group. These results lend support to the statement that implementing supplier selection criteria and involving suppliers has a positive impact on performance.

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