How a continuously changing B2B environment influences the selection of suppliers : introducing a model and process approach

Abstract: Creation of a supply base is perhaps the most important task of the purchasing function. In this creation process, potential suppliers must be identified, analysed and decisions made. Decisions that, in most cases, have direct effects on the company's "bottom line". The tools to support and aid this process are often one-dimensional and assume to a high degree that, in all cases, there is a valid description of the best possible supplier. This research suggests that this is not the case. Which is the best possible supplier is situation specific. This is a fact acknowledged in the literature and by the empirical material. What is missing is a tool to support the supplier selection process from a starting point that each sourcing situation is unique. This research proposes such a process approach and, at the same time, a model for supplier selection.The purpose of this study is to analyse and develop the process of, and the criteria for, supplier selection in a sub-tier, business to business context. The research has been initiated by, and had its starting point in, one company (Volvo Aero Corporation) acting in the specific and very demanding environment of the aero-engine industry. The main aim of this research is to give managerial implications for purchasing professionals.To be able to ensure that the best possible supplier for a specific situation is selected, the situation has to be analysed. This research proposes a model and process that starts by defining the minimum requirement which a supplier has to fulfil for a purchaser to be convinced that the intended relationship will be successful for the intended period of time. This minimum requirement is called the supplier profile. The business environment, network and market conditions, the.purchasing company 's strategies and the characteristics of the product, service or function to be sourced are identified as influential factors when creating the supplier profile. The results also highlight the need to work cross-functionally when creating the supplier profile and the need to combine different theoretical bases to get a complete picture of the requirements to put on a potential supplier.