Selecting the best supplier is always a difficult job for managers in leading industries; it is similar to a pool of candidates gathered for recruitment. While selecting suppliers on comparison basis companies often concentrate on cost variations while ignoring all other factors that may increase the overall cost of using a supplier.
Supplier selection is done on the basis of scoring while considering all these factors: replenishment lead time, on-time performance, supply flexibility, delivery frequency, supply quality, transportation cost, pricing terms, information coordination capability, design collaboration capability, exchange rates, taxes and duties and supplier viability (Chopra, Meindl: 445). The three T’s concept is used as an overall criterion for supplier selection: Time, Trust and Transparency. Time plays a crucial role in the value chain process, where changing the product, process and positioning are all in line with respect to time. Even the entry time in the market, international or local, carries a huge weight in the new business (Wilding 2003). For instance, Zara has 200 designers readily available who sit right in the middle of production process. Now, to serve these designers with supply, Zara has to make sure suppliers reach on time, with right materials and in the right quantity which requires efficiency mentioned above in supplier selection factors.
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