4 METHODS AND APPROACHES FOR VENDOR PERFORMANCE EVALUATION

Transcription

1 Methods And Approaches For Vendor 4 METHODS AND APPROACHES FOR VENDOR PERFORMANCE EVALUATION CONNIE TING 71 INTRODUCTION This article will discuss previous studies that have been done on vendor selection processes. Vendor performance evaluation process will be presented. In conjunction with this, the literature study has revealed the criteria of vendor selection and vendor performance evaluation, process of vendor selection and vendor performance evaluation and lastly, vendor selection method as well as vendor performance evaluation methods. Definition of Vendor A vendor can be defined as a dealer, distributor, manufacturer, or seller providing goods and services that are required for the conduct of a Federal program (Answer, 2008). These goods or services are often in contract with a business for an organisation s own use or for the use of beneficiaries of the Federal program (Small business note, 2008). However, another definition of vendor is used is to describe an organisation that supplies goods or services of a commercial nature. In this publication, a vendor refers to both manufacturers and distributors as long as they sell products to the general public (PC Magazine, 2008). In short, a vendor is basically a supply chain management term which manufactures inventoriable items, and sells those items to a customer. chapter-4.indd 71

2 72 Essentials Of Marketing Principles The Overview Process of Source of Supply In today s manufacturing industry, the purchasing organisation has prime responsibilities in choosing the constituents of the firm s vendor pool. Information about available source of supply can be acquired from a variety of sources that includes published, internal, personal, and international sources. A preliminary screening has to take place when a list of vendor candidates had been finalised from these different inputs. The purpose of screening is to determine the qualification of potential vendors because they have satisfied preliminary requirements. These semifinalists are then subjected to more intense scrutiny to select the one best suited to satisfy the firm s needs. After the vendor selection process, the selected vendors will be officially added to the approved vendor list. A continuous evaluation is performed for competitiveness and performance monitoring after vendors have been officially made partners. This kind of monitoring is essential to ensure their compliance with quality standards and production schedules. They have to be communicated openly and promptly if slippages occur. Vendor performance evaluation is described as an early warning system that can help nip emerging problems in the bud. An action is needed where performance has been satisfactory and/ or problems have been resolved promptly after vendor performance evaluation was done. Vendor selection criteria Vendor involvement Vendor Performance Manufacturing Performance Source: Tracey and Vonderembse, (2000), pg: 11. chapter-4.indd 72

3 Methods And Approaches For Vendor 73 Figure 2.1: Supplier Relations and Manufacturing Performance Rewarding the source and retaining it on a preferred position on the approved vendor list is basically done to encourage vendors to put in an effort and jointly explore opportunities for further improvement and growth. Conversely, vendors whose performance continues to be unsatisfactory after they have been duly alerted of their deficiencies have to be dropped from the list. This will usually trigger the search for new sources to replace them. Other reasons for adding or even developing sources might be the availability of innovative materials or technologies or a company s entry into new fields that necessitates additional sourcing. With the increase in the number of minority vendors available comes the need to include them in a firm s sourcing plan. It may also conduct occasional vendor clinics to educate them to its needs and leverage the partnership. Vendor Selection It is probable that of all the responsibilities which may be said to belong to the purchasing officers, there is none more important than the selection of a proper source. Indeed, it is in some respects the most important single factor in purchasing which was stated by Howard Lewis in one of the early purchasing text. Hence, vendor selection has long been regarded as one of the most important decision making activity. In today s manufacturing industries, vendors are considered as the best intangible assets of any organisation (Anukul and Deshmukh, 1993). In other words, right vendors selected can provide the right quality of material on time at a reasonable price and it significantly reduces the purchasing costs and improves corporate competitiveness (Ghodsypour and O Brien, 2001). The vendor selection decision is a part of a chain of events rather than an isolated instance. Previous performance and current performance of vendor effect the decision making for future chapter-4.indd 73

4 74 Essentials Of Marketing Principles vendor selection. On the other hand, the selection process involves evaluation of different alternative vendors based on various criteria. Quantitative and qualitative factors needs to be considered in trade-offs among multiple criteria when vendor selection was done (Ghodsypour and O Brien, 1998). Basically, vendors are selected based on their ability to meet the quality requirements, delivery schedule and the price offered. However, in modern management, one needs to consider many other factors with the aim of developing a long-term vendor relationship. Consequently, consideration needs to be given also to the other important strategic and operational factors such as quality, delivery, flexibility, and etc. Supplier selection decisions must include strategic and operational factors as well as tangible and intangible factors in the analysis (Sarkis and Talluri, 2002). Criteria of Vendor Selection Vendor selection can be defined as a complex process whereby several criteria of vendors need to be identified before beginning a relationship with a particular vendor. All vendor selection process differs in some ways from each other, depending upon the circumstances of each particular case. Vendor selection criteria are basically used to evaluate previous performance of the vendor to determine their strength in new business development. Vendor selection is primarily emphasized on the trade-off among quality, delivery performance and performance history. Based on Timmerman (1986) and Monczka, Giunipero and Reck (1981), quality, delivery, and performance history are the main criteria for vendor selection. chapter-4.indd 74

5 Methods And Approaches For Vendor 75 Rank Factor Mean Rating Evaluation 1 Quality Delivery Performance history Warranties and claim policies Production facilities and capacity Price Technical capability Financial position Procedural compliance Communication system Reputation and position in industry Desire for business Management and organisation Opearing controls Repair service Attitude Impression Packaging ability Labor relations record Geographical location Amount of past business 1.60 Extreme Importance Considerable Importance Average Importance chapter-4.indd 75

6 76 Essentials Of Marketing Principles 22 Training aids Reciprocal arrangements 0.61 Source: Webel er al. (1991), pg: 4. Slight Importance Table 2.2: Dickson s vendor selection criteria. Besides, Dickson (1966) as sited in Weber et al. (1991), there are several vendor selection criteria that have been identified. Regarding his study, he found that quality, delivery and performance history remain the most important criteria of vendor selection which needs to be taken attention of during the selection process. Meanwhile, performance histories normally are used to make evaluation among the entire existing vendor, not just for the totally new vendor. In other words, Ansari and Modarress (1986), Benton and Krajeski (1990), Bernard (1989), Browning et al. (1983), Burton (1988), Ellram (1990), Hahn et al. (1983), Jackson (1983), Kralijic (1983), and Treleven (1987) as sited in Talluri and Narasimhan (2003) have concluded that quality was the highest ranked factor followed by delivery performance and cost. It can be concluded from these studies that vendor selection decisions must not be exclusively based on the least cost criterion and that other critical factors such as quality and delivery performance needs to be incorporated into the evaluation and selection process. Quality Quality has always been one of the key issues in supply management (Leenders, et. al., 2002). Quality means both the quality which is offered or specified and the quality which is delivered or received. Specification quality and conformance quality are the technical terms which are designed to meet customers requirement. Vendor chapter-4.indd 76

7 Methods And Approaches For Vendor 77 quality capability is important especially for first time purchases from any vendor. Moreover, quality is one of the factors for success in the business of supply management. Delivery Based on Bairly (1987), delivery is defined as the shortest period for vendors to complete the order which is requested by customers and the reliability of the commitment that the vendor admitted. Quick delivery is always preferable in all fields of business. This is because it simplifies forward planning and increases flexibility. In other words, the vendor has fewer orders outstanding; consequently the buyer has less to worry about the outstanding issues. For regular purchase, Justin-time delivery systems requires absolute reliability from vendors. Performance history Vendor performance is used to measure the ability of vendors to accomplish the objectives that the manufacturer demands successfully (Abdul Hamid and Krishnapillai, 2006). As an example, there would be minimal in-transit damage from the vendor if the delivery of the quality products is done in a correct and timely manner. Vendor performance has a big influence on manufacturing performance. The manufacturing performance of the firm being supplied should increase when vendor performance is good (Tracey and Vonderembse, 2000). It is believed that vendor performance not only affects but makes a big impact on the ability of manufacturers to produce and deliver products to its customers in a timely and cost-effective manner. Warranties and Claims Policy Warranty is an obligation that goods sold is as factually stated or legally implied by the seller, and that often provides for a specific chapter-4.indd 77

8 78 Essentials Of Marketing Principles remedy such as repair or replacement in the event the goods fail to meet customer requirement. In commercial and consumer transactions, warranty can express the service to build up good relationship between buyer and seller and the smooth flow of goods from one to another. Basically, warranty varies with the type of purchase. Goods warranty services may include the provision of technical assistance and expert advice before and after the sale, prompt attention to queries and accurate paperwork. Last but not least, the reliability of the promises must be good enough to attract attention in vendor selection process. Price The best vendors normally don t offer the cheapest price to start a new business. Price has to be considering in relation of what to buy. For instance, some vendors make a better-than-average product at a lower-than-average price. In this case, the reliability of vendor s offer needs to be confirmed before selecting them as new vendors. Buyers are responsible to find out the balance between good quality and lower price. Process of Vendor Selection Traditionally, a purchasing manager will turn to all available and accessible sources of vendor information which are published sources, internal sources, personal contacts and international sources during early stages of vendor selection process. The manager assembles as comprehensive a candidate list of potential vendors as possible. This process is shown in Figure 2.3. chapter-4.indd 78

9 Methods And Approaches For Vendor 79 Source: Scheuing (1988), pg: 216. Figure 2.3: Vendor Selection Process METHODS OF VENDOR SELECTION The selection criteria are formulated by purchasing managers throughout the specific process. A few parties who are user representatives, one or more engineers, a purchasing and/ or financial analysts, and other interested and informed parties may well join the manager in various phases of the selection process as needed and appropriate. Vendor financial studies and the conduct of vendor visits are needed to be done for detailed study of qualified chapter-4.indd 79

10 80 Essentials Of Marketing Principles candidates. Besides, evaluation will be done by referring to the selection criteria. The preliminary screening phase is used to prevent the waste of corporate resources on a detailed review of vendors who cannot satisfy the applicable requirements. Inspection is conducted and discussions are held with the management. However, vendor visit is the ultimate selection mechanism that is only applied to a preselected few candidates but this cannot forestall all future problems. A winner who is subsequently added to the firm s approved vendor list is produced by careful weighing of the evidence by the team members. Traditionally, a few methods of vendor selection have often been used to select the vendors. The common methods for the vendor selection process are bids, negotiation and tenders. Bids and negotiations can be defined as an informal method for vendors to be competitive in vendor selection process. Meanwhile, a tender is a formal approach for those vendors to take part in the vendor selection process (Erridge A., 1995). Bids Bids normally will be used for a small, often specified number of suppliers of low-value purchasers without the formalities and cost of the tendering. The common practice of organisations is in inviting bids from only those suppliers of a product which have achieved a high rating based on theirs supplier appraisal scheme. Potential suppliers are invited verbally or in writing to bid against the specification. However, bids still need to be obtained in a form allowing for comparison, and in accordance with agreed procedures and time table. chapter-4.indd 80

11 Methods And Approaches For Vendor 81 Tenders A tender is a much more formal approach. Normally tenders are with time scales, documentation and evaluation procedures laid down either by legislation or organisational rules. But, there are some advantages and disadvantages of this method performed. Advantages of competitive tenders includes enabling the buyer to obtain the lowest price for the requirements due to them competing with other vendors which compels each bidder to quote as low as possible in order to win the business. It provides an equitable and objective method of accessing suppliers. Besides, it ensures compliance with accountability to taxpayers and shareholders and provides transparency and an audit trail to justify supplier selection. On the others hand, disadvantages of competitive tenders includes there would be a risk that lowest price bidder may be forced to cut quality to achieve the bid price. Expectations of competition may be false especially in markets with one or a few dominant suppliers. Negotiation Negotiation alone in selection of vendor is often associated with a partnership approach which existing and long term vendors will be given the first opportunity to discuss the supply of a new product especially at an early stage in its design. Negotiation methods will bring some advantages and disadvantages. The advantages of negotiation are reduced time spent to look for new suppliers and gather the competitive bids and reduced risks for both vendors and customer organisation and should as a result lead to reduced costs. However, possible disadvantages include increased danger of collusion and fraud and increased difficulty of evaluating offers on an equal basis. chapter-4.indd 81

12 82 Essentials Of Marketing Principles Vendor Vendors are to be viewed as critical resources for an organisation and are to be managed to derive maximum potential in supply chain in today s competitive environment, (Mohanty and Jae, 1988). The vendor performance evaluation identifies the suppliers best equipped to meet the customer s expected level of performance, and check them periodically and systematically. Moreover, vendor performance evaluation also can be defined as a systematic and extensive evaluation of the supplier s efficiency for the selection of new vendors and the control of vendors within the vendor master (Lasch R. and Janker C.G., 2004). Perhaps the best reason for implementing a vendor performance evaluation is that it allows a greater awareness in achieving supplier performance. When integrated with other operating functions, a vendor performance evaluation can serve many purposes ranging from monitoring quality costs to tracking the timeliness of incoming materials. A strong rating can provide information necessary to effect change and contribute to the profitability of an organisation. CRITERIA OF VENDOR PERFORMANCE EVALUATION Recently, vendors have come to play an important role in the supply chain. Vendor performance evaluation has been a basic element of comprehensive quality activities for many years. Satisfaction in vendor performance needed to be maintained through continued monitoring vendor performance after vendor selection (Bossert, 1994). Those literatures available that describes the best practice for evaluating and measuring vendor performance (Tan et al., 1999; Neely, 1999; Anderson and Lee, 1999; Tracey and Tan, 2001; Cebi and Bayaktar, 2003; Gunasekaran et al., 2004). According to Gunasekaran et al., (2004), good quality, delivery reliability and chapter-4.indd 82

13 Methods And Approaches For Vendor 83 product performance always play an important role in the vendor performance evaluation. According to Yu and Tsai (2008), there are plenty of vendor performance evaluation criteria that can be used in the vendor performance evaluation activities. Source: Yu and Tsai (2008), pg: 6. Figure 2.4: Vendor performance evaluation with those criteria. It is important to identify the criteria and metrics that are objective and relevant to the organisation at all levels when the vendor performance evaluation is carried out.. The criteria must also be measurable, realistically attainable, adequately resourced and timely. Delivery performance, quality and costs are the basic elements that have been used for vendor performance measurement (Cormican and Cunningham, 2006). chapter-4.indd 83

14 84 Essentials Of Marketing Principles Quality Quality is a degree of excellence. The measure of quality basically is directly associated with whatever deficiency reporting system depending on the vendors. Some common measurements of quality relate to rejection of receipts. Quality performance can be expressed in many ways: percent defective (for parts or lots), parts per million, defects per million, parts per billion, and defects per billion. Vendor performance evaluation can be only as good as the data that are available. Meanwhile, the ability for an effective performance evaluation is hampered if there is incomplete or flawed data. Quality improvement and defect-free performance imply a relationship between quality and deficiencies. The absence of reported deficiencies equates with desirable quality performance. Delivery Delivery is the process of transporting goods. Most goods are delivered through a transportation network. Besides, delivery on time is needed for those manufacturers to run their business smoothly. Otherwise, vendors will lose their business relationship with their customers. Most of the manufacturers want to decrease their inventories and become more Just in Time oriented, thus delivery is an item measure to confirm vendor s delivery performance. Some common delivery performance measurement are based on amount of on-time delivery (as specified by purchase order), amount of early deliveries, amount of late deliveries, amount of excess order quantity, and amount of low order quantity. Customer Claims Customer claims is a dissatisfaction of the customer or buyer for the quality or reliability of product which is produced by the seller. Customer claims basically will reflect on the quality and chapter-4.indd 84

15 Methods And Approaches For Vendor 85 reliability for vendor s product. The measurement of the customer claims is needed for vendor performance evaluation to know the actual vendor s product performance. Customer claims is normally measured in the number of cases of defects occurred. Cost Cost plays an important role in the vendor selection due to costs having an effect on other criteria such as quality, delivery, and after sales service when doing a business (Anukul and Deshmukh, 1993). But this criterion is not necessarily needed for the manufacturer to evaluate theirs vendor performance. Normally, this criterion only applies to those manufacturers which have a quality cost system in place. The cost can be incorporated into the vendor performance evaluation and true cost of each vendor to the business will be clearly shown. This can include items such as scrap, inspection, rework and return cost. Meanwhile, the small size of manufacturing basically do not have quality cost system, thus they will ignore this criterion during vendor performance evaluation. Scrap Rate Scrap rate is defined as a percentage of failed assemblies or materials that cannot be repaired or restored, and is therefore condemned and discarded (Business Dictionary, 2008). Basically scrap rate is used to reflect the ability of vendors to produce a good part. The ability of vendors is considered good when the scrap rate is low. Thus, the scrap rate becomes high when vendors are poor in producing good parts to customers. Product Capability Product capability is an important evaluation criteria for vendor performance. It is always used to measure the ability of an entity chapter-4.indd 85

16 86 Essentials Of Marketing Principles for a vendor to achieve customer needs and requirements. In the manufacturing industries, performance of product capability normally is measured by knowing how well vendor fulfill s customer s forecasting. Product capability of vendor is poor when there are a lot of outstanding issues occurring. Process Environment Generally process environment plays an important role in good products produced. A good process environment can ensure that all manufacturing process run smoothly and less to produce defective products. Meanwhile, defective products will be produced when there is no awareness of the important of process environment among the workers and staff. This criterion is measured by conducting an audit at the vendor s factory to ensure the process environment is fulfilling customer s standard. Process of Vendor Vendor performance evaluation generally comes after vendor selection and this process is done periodically Barnett (1985) has suggested that performance evaluation of each vendor should be plotted on a chart on a regular basis for continuous use, and thus trends and levels can be seen and thus monitored. Vendor performance evaluation is playing a big role in the vendor controlling management to ensure those selected vendors actually perform.. First, quality manager formulated the performance evaluation criteria to be applied throughout the specific process. The specific process actually is the formulation of a team which gathers all the expertise such as purchaser manager doing the identification on the performance evaluation criteria and doing a detailed study of it. Vendor performance evaluation started to be implemented once the performance evaluation criteria are identified. chapter-4.indd 86

17 Methods And Approaches For Vendor 87 Data Collection of Vendor Performance Internal Data Collection External Data Collection Evaluation based on performance evaluation criteria Vendor Performance Ranking Figure 2.5: Vendor Process Next, those related data are collected from the related departments, such as purchasing departments needing to prepare delivery data. Collected data with regards to the previous performance will be evaluated based on the established criteria. Rating and grades will be awarded to express the current vendor performance. The vendors who have good grades in the performance evaluation will be monitored continuously. In other words, the vendors who get a poor grade such as C and D, warning letter is issued to urge them to improve. Otherwise, termination of the partnership with those vendors will take place. Vendor Method The purpose of the vendor performance evaluation is to record the performance of previous transactions. Measurements can often be made on a fairly concrete basis by relying upon the yardstick of actual performance. There are three basic approaches to the evaluation of vendor performance commonly found in manufacturing which are chapter-4.indd 87

18 88 Essentials Of Marketing Principles categorical method, linear averaging/ weighted-point method and cost-ratio method. Categorical Method Involvement of categorizing each vendor s performance in specific areas defined by a list of relevant performance variables is the categorical method. There is a procedure for buyers to keeps a record of all vendors with their actual performance by products to be monitored. The buyer assigns a grade in simple categorical terms, such as good, neutral, and unsatisfactory, which is used to indicate the vendor s actual performance in each area. This performance evaluation is done by referring to a list of significant performance criteria that is developed for evaluation purposes. Finally, rating of vendor performance are determined and utilised by the buyer in working with the vendors in question. This approach is the least precise of the evaluation techniques. The reason being is that most of the intuitive process depends on the memory, personal judgment, and the experience and ability of the buyer; consequently, it is the least precise of the evaluation techniques. The main advantage of this method is that it is inexpensive, requires minimal performance data, lends some structure to the evaluation process, and allows a number of personnel from related areas to contribute to the evaluation. Cost-Ratio Method The cost-ratio method is a tool of standard cost analysis to evaluate supplier performance. This method calculates the total cost of each purchase to be evaluated by adding the selling price with buyer s internal operating costs that are associated with the quality, delivery, and service elements of the purchase. A four-step approach is involved in the calculation methodology. Determination of the internal costs associated with quality, delivery, and service is the chapter-4.indd 88

19 Methods And Approaches For Vendor 89 first step. Secondly, all related data need to be converted to cost ratio, which expresses the cost as a percentage of the total value of the purchase. Thirdly, add the three individual cost rates to obtain the net adjusted cost. Finally, overall cost ratio is applied to the vendor s quoted unit price to obtain the net adjusted cost figure. Actually the cost-ratio method is an extremely complex method which a comprehensive cost-accounting system is required to generate the precise cost data needed and assumes the ready availability of such data to the purchasing department. Linear Averaging / Weighted-Point Method The linear averaging or weighted-point method is the combination of qualitative elements of the categorical plan with the systematic nature and quantifiable procedures of the cost-ratio plan. A composite performance index can be calculated by all evaluation factors and their relative importance which is expressed in numerical terms (weights) and thus supplier comparisons are made. The determination of a vendor s rating is done by multiplying each factor weight with the supplier s corresponding performance number. Then, the vendor s final rating for the time period can be arrived at by totaling the results in the previous stage. The linear averaging method is more objective compared to the categorical plan, but without the cumbersomeness and accounting demands of the cost-ratio plan. Flexiblity and accommodating any number of evaluation factors are the advantages of this method. The only weakness is that qualitative judgment is normally difficult to convert into a quantitative form. CONCLUSION The vendor management process is responsible for the arrangement of the vendor-buyer connection in the context of procurement marketing. According to Arnolds et al. (1998), the construction and chapter-4.indd 89

20 90 Essentials Of Marketing Principles preservation of a vendor master, whose members are characterized by continuance, effectiveness and service level, should be established. Based on the previous literature, quality, delivery, performance history and costs are the main criteria for vendor selection. Meanwhile, those criteria also are the items which are used for vendor performance evaluation except performance history. As an example, in the vendor selection process, manufacturers normally will take consideration on the quality of the product produced, the speed of the parts delivered, the reliability of the products and so on. Those selected vendors are the ones who can fulfill theirs customer requirements. However, selected vendors need to be monitored continuously by vendor performance evaluation to ensure their performance. At this moment, vendors will be evaluated by looking at the quality of products produced, delivery performance, the number of cases of customer claims and warranty returns. The results of this evaluation can express the performance level of the vendors. Consequently, the criteria of vendor selection and criteria of vendor performance evaluation are almost using the same criteria such as quality and delivery. The only differences between vendor selection and vendor performance evaluation is the timing of the vendor performance captured. Basically, vendor selection will focus on the previous performance history in ensuring how well those vendors can perform amid their limitation. But, vendor performance evaluation is used to confirm the current vendor performance level and the ability of vendors to maintain their good performance in the future. chapter-4.indd 90

21 Methods And Approaches For Vendor 91 REFERENCE Abdul Hamid, A.B. and Krishnapillai, G. (2006). The Impact of Purchasing and Early Supplier Involvement (ESI) in a Manufacturing Firm, Research Vot 75211, Universiti Teknologi Malaysia. Anderson, D.L. and Lee, H. (1999), Synchronised Supply Chain Excellence: The New Frontier, Achieving Supply Chain Excellence Through Technology, Montgomery Research, San Francisco, CA. Answer (2008). Definition of Vendor. Available: answers.com/topic/vendor. Last accessed: 10th August Anukul M. and Deshmukh S.G. (1993), Vendor Selection Using Interpretive Structural Modelling (ISM), International Journal of Operations & Production Management, Vol. 14, No. 6. Bairly P.J.H. (1987). Purchasing and Supply Management. 5th Ed., London: Chapman & Hall. Bussiness Dictionary (2008). Definition of Scrap Rate. Available: scrap-rate.html. Last accessed: 20th September Bossert, J.L. (1998), Supplier Management Handbook, ASQC Quality Press, Milwaukee, Wisconsin. Cebi, F. and Bayaktar, D. (2003). An Integrated Approach For Supplier Selection, Logistics Information Management, Vol. 16 No. 6, pp Cormican, K. and Cunningham, M. (2006). Supplier Performance Evaluation: Lessons From A Large Multinational Organisation, Journal of Manufacturing Technology Management, Vol. 18 No. 4, National University of Ireland, Galway, Ireland Erridge A. (1995). Managing Purchasing, Butterworth- Heinimann Ltd, Linacre House, Jordan Hill, Oxford. chapter-4.indd 91

22 92 Essentials Of Marketing Principles Ghodsypour, S.H. and O Brien, C. (1998), A Decision Support System for Supplier Selection Using An Integrated Analytic Hierarchy Process and Linear Programming, International Journal of Production Economics, Vol. 56/57, pp Ghodsypour, S.H. and O Brien, C. (2001), The Total Cost of Logistics in Supplier Selection,under Conditions of Multiple Sourcing, Multiple Criteria and Capacity Constraints, International Journal of Production Economics, Vol. 73, pp Gunasekaran, A., Patel, C. and McGaughey, R.E. (2004), A Framework For Supply Chain Performance Measurement, International Journal of Production Economics, Vol. 87 No. 3, pp Leenders, M.R., Johnson, P.F., Flynn A.E., and Fearon H.E. (2006), Purchasing and Supply Management, 13 th edition, US: McGraw-Hill. Monczka, R.M., Giunipero, L.C., and Reck, R.F. (1981), Perceived importance of supplier information, Journal of Purchasing and Materials Management, pg PC Magazine (2008). Definition of Vendor. Available: 42,t=vendor&i=53736,00.asp. Last accessed: 10th August Sarkis, J. and Talluri, S. (2002), A Model for Strategic Supplier Selection, Journal of Supply Chain Management, Vol. 38 No. 1, pp Scheuing E.E. (1988). Purchasing Management, St. John s University New York, New Jersey: Prentice Hall, Englewood Cliffs. Small Bussiness Note (2008). Definition of Vendor. Available: html, accessed: 10th August Talluri, S. and Narasimhan, R. (2003). Vendor Evaluation with Performance Variability: A Max Min Approach. European chapter-4.indd 92

23 Methods And Approaches For Vendor 93 Journal of Operational Research 146(3), Timmerman, E. (1986), An Approach to Vendor Performance Evaluation, Journal of Purchasing and Materials Management, pg Tracey, M. and Vonderembse, M.A. (2000). Building Supply Chains: A Key to Enhancing Manufacturing Performance. Mid-American Journal of Business. 15(2) Weber C.A., Current J.R., and Benton W.C. (1991), Vendor Selection Criteria And Methods. Faculty of Management Sciences, College of Business, The Ohio State University, Columbus, USA. Yu and Tsai (2008), A Decision Framework for Supplier Rating and Purchase Allocation: A Case in the Semiconductor Industry, Journal of Computers & Industrial Engineering, National Chi Nan University, Taiwan. chapter-4.indd 93