An action research on the alternate supplier selection of skin care B (SCB) company

• Main Author: Uy, John Robinson T.
• Format: text
• Language: English
• Published: Animo Repository 2016
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/4984
• Institution: De La Salle University

In the fast moving consumer goods business, it is very critical to the manufacturer that supply is sufficient enough to be able to serve the production requirements. Given todays environment characterized by supply chain risk, green initiatives, increasing customers value expectations, expanding regulatory compliance, and global economic crisis, demand forward looking manufacturing firms to select and maintain suite of competent suppliers. A pool of competent suppliers is one of the fundamental bases of achieving supply chain effectiveness and long term business survival. Without the appropriate supplier selection and evaluation process can retard firms supply chain performance, catapult cost, and diminish shareholder value (Enyinda et. al., 2010, p. 25). Moreover, according to Beil (2009, p. 2) to survive in the intensely competitive global economy, developing existing suppliers is as important as developing new suppliers. Supplier selection was first studied in 1966 by Dickson who identified 23 criteria considered by firms in their supplier selection process. His work has since then received much attention to be the subject of succeeding papers in purchasing and supply management literature up to now. He concluded that three (3) factors are essential (according to rank, 1 highest, 3 lowest) in supplier selection: (1) quality, (2) on time delivery and (3) performance history. However, with the evolution of businesses and their process, the changing preferences of the consumer and globalization, rankings of these criteria changed and new entrants into the list were noted. This action research paper aims to address the lack of alternate raw material suppliers of SCB company. In this line, the alternate suppliers list is not filled completely. This issue has led to a major supply shortage back in July 2015. With the growing material usage of raw materials through product developments, it is imperative for SCB company to have pool of competent alternate suppliers to fully serve the requirements for production and can extend technical support in developments. Collaboration with the Operations department (purchasing and planner) was done in doing this action research. Is selecting for alternate suppliers, it is important to have a set of criteria to look at to be able to qualify a potential supplier. SCB company looks into quality and cost, however, the supplier who offers the lowest price will be selected. This has limited the number of alternate suppliers being qualified. The team referred to Dicksons supplier selection criteria and identified other criteria such as delivery lead time, order quantity, technical capability, communication system, origin and customer service that SCB company should consider in selecting its alternate suppliers, appropriate for its business operations. Furthermore, the supply chain balance scorecard was the tool used to measure the efficiency of the improved alternate supplier selection process through the performance of the supplier after being selected. These models are considered reliable models for quantifying strategic supplier selection.