Supplier selection of IDB funded projects

Abstract

Supplier selection is an essential task within the purchasing function. A well-selected set of suppliers make a strategic difference to an organizations ability to reduce costs and improve the quality of its end products. This realization drives the search for new and better ways to evaluate and select suppliers. This helps decision makers reduce a base of potential suppliers to a manageable number and make the final selection and order quantity allocation by means of multi-criteria techniques, such as the ideal solution approach, analytical hierarchy process (AHP), and goal programming. This is a study on factors affecting the selection of suppliers and supplier selection procedure of the project funded by lDB. The main objective was to identify the factors affecting supplier selection; the supplier selection process has also been identified. Factors affecting selection of suppliers were identified as cost, technical capability, quality assessment, organizational profile, service levels, supplier profile and risk factors. This paper concludes that, cost criterion is a key factor affecting supplier selection. lt dictates among many elements i.e. the profit margins. Technical capability, quality of materials and the profile of the supplier are also closely considered. From the findings, we recommend that supplier selection should be an open and transparent process, carried out by experts from all key departments and should be done in time to avoid stock outs.