Supplier Selection and Evaluation Process Steps in the Supplier Selection and Evaluation Process

Supplier selection and evaluation process consists of six different steps as follows:

The first step involves the identification of potential suppliers. At this stage, the buyer considers the competitive global economy and focuses on discovering the new viable suppliers. Moreover, it will consider issues such as the importance of discovering new suppliers, the reasons for screening the qualifications presented, the actual screening process that looks at aspects such as reference checks, surge capacity availability, and buy-in from the internal customer(s), and the creation of a supply base. In the second step, the supplier is requested to provide information about their products and or services. The information given will depend on the Request for Information (RFI), Request for Proposal (RFP), and Request for Quotation (RFQ) documents. The contractual terms between the buyer and suppliers will be stated in the third step.

The fourth step involves negotiation where the buyer considers the qualifications of the supplier and the terms of the contract including the payment. In the following step, the supplier and award of contract are evaluated where the buyer carries out a follow-up monitoring as a way of informing the suppliers about future selection processes....

The last step involves supplier selection research that looks at their purchasing literature and later evaluation using a given methodology (Murphy & Knemeyer, 2014).
Challenges of Implementing a Global Sourcing Strategy

Companies engaging in global sourcing face long lead-time and large inventory level as the two most significant problems. The challenge of long lead times includes geographical distances, which complicated the supply chain management. Such distances are also known to exaggerate the uncertainties impacts at demand or supply end. Moreover, issues of customs clearance and possible economic and social instability are expected to prolong the lead-time. In developing countries, some of the challenges include the lack of manufacturing technology and skills. Large inventory is also a contributing factor that results in long lead-time because of miscommunication between the suppliers and retailers that result in unnecessary inventory. Eventually, the overall cost of implementing global sourcing may increase due to hidden costs (static, dynamic, and hidden) and additional dynamic (Holweg, Reichhart & Hong, 2011).

Ethical Issues Associated with Procurement

Some of the ethical issues associated with procurement are a conflict of interest where individuals look at their interests and not that of the organization they…