The Supplier Selection Decision in Strategic Partnerships

Abstract

The concept of partnerships between buyers and suppliers is receiving increasing attention in American industry. This article examines the issue of supplier selection in situations where the firm is considering a partnership type of relationship with potential suppliers. The argument is made that partnerships are different in nature than traditional buyer‐supplier relationships, and thus require the consideration of additional factors in supplier selection. This study combines a literature review with the use of case studies of firms involved in buyer‐supplier partnerships to develop additional factors that should be considered in the selection of supply partners. Four categories of additional factors are developed: (1) financial issues, (2) organizational culture and strategy, (3) technology, and (4) a group of miscellaneous factors. The issues included in these categories tend to be longer term and more qualitative than factors included in traditional supplier selection models. The article suggests that these additional factors supplement, rather than replace, the more traditional factors in developing strategic partnerships with suppliers.