Supplier Selection Problem: Methodology Literature Review

Supplier selection and evaluation has attracted serious research attention at both the academic and the practitioner levels. In this paper, an attempt is made to review the status of methodology literature in supplier selection. A total of 154 papers from 68 refereed journals were selected and reviewed. This paper provides insights to the literature by considering the breakdown of journals that have published research in this area, by classifying the literature into various categories and considering the various methods/techniques suggested in the literature. Eased on the review, avenues for further research are also discussed. INTRODUCTION Suppliers have always been an integral component of a company's managemient policy; hovrever the relationship between a company and its suppliers has traditionally been a distant one. ^'hen a supplier selection (SS) decision needs to be made, the buyer generally establishes a sit (if revaluation criteria that can be used to compare potential sources. The basic criteria typically utilized for this purpose are pricing structure, delivery (lead-time and reliability), product quality, and service (i.e., personnel, facilities, research and development, capability, etc.). Frequently, these evaluation criteria conflict with one another. In addition, the importance of e;ach criterion varies from one purchase to the next. This situation can be complicated further by the fact that some of the criteria are primarily quantitative (price, quality, etc.) and some are qiialitative (service, etc.). The literature on supplier selection spans over three decades and covers virtually all the aspects of business. Researchers have long sought to understand and model the relationships between suppliers and buyers. In this paper, the author concentrates on methodology literature and the review covers the period 1986 through the present. Traditionally tliis fie ld of study has been a subject matter of purchasing or supply chain management literature, hovi'ever with recent developments and interest in e-Procurement, and related fields, this paper provides the audience of this journal with some background to this area of research, that is being inipacted u]3on by information systems and technologies (including the internet) and provides a rich source of research avenues. The objective of this study is to provide a review of supplier selection methodology l iterature. Based on this review avenues of further research are to be identified, including areas Cif interest in the information systems/technology field. The study includes 154 articles from 68 rep uted refereed Journals. More specifically, the purpose of this study is to: 53 1 Bhutta: Supplier Selection Problem: Methodology Literature Review Published by CSUSB ScholarWorks, 2003 Journal of International Technolosv & Information Manasement Volume 12. ISumber 2 • Classify supplier selection research articles according to their approach and methodologies; and provide a brief overview of these methods/techniques, • Classify the journals that actively publish SS literature, • Consider the frequency of literature by year of publication, • The paper also provides a brief overview of some of the salient methods that exist in literature to tackle the SS problem, • And suggest a research agenda for future work, with special emphasis on the impact of Information systems on the supplier issue. The paper is organized as follows: Section 2 provides a methodology of literature review, section 3 presents that classification of literature along several aspects, section 4 looks are various methods advanced to solve the supplier selection problem, and section 5 delineates avenues of further research and provides concluding remarks. METHODOLOGY OF LITERATURE REVIEW Extensive literature exists in the field of supplier selection. The author focused on literature for the period 1986-2002. Several excellent papers exist that have focused on reviewing earlier research such as Weber (1991). A survey of literature was carried out based on the editorial scope and contents of the journals and a list of journals was compiled. Journals stating in their editorial scope issues such as purchasing, inventory management, and supply chain management were selected. A comprehensive review of the table of content of the journals, abstracts, and where possible review of the complete paper was carried out. The literature review was augmented by use of online computerized search engines including (ScienceDirect, ABIINFORM, INFOTRAC) using keywords such as supplier selection, vendor seleetion, modeling, techniques, mathematical modeling, etc. in addition to this search, articles were also included after scanning the reference sections of the initially selected papers. The ultimate list of articles reviewed by this paper covers articles published in reputed refereed scholarly journals. Based on this review, articles that met the criteria of addressing issues related to the supplier selection problem and presented a model or framework were selected. CLASSIFICATION OF LITERATURE Frequency of Articles in Journals Based on the criterion of number of articles published, the journals were categorized as high, medium or low contributors to the supplier selection research. Table 1 presents the outcome of the survey. As can be seen from Table 1, journals were segmented on the basis of number of articles published. Based on the literature review. International Journal of Purchasing & Material Management, International Journal of Physical Distribution & Logistics Management, and Journal of Business Research have published at least ten articles on SS. journals publishing six or more articles account for approximately 42 percent of the articles. Journals classified as medium contributors published around 19 percent of the articles. It was surprising to the author that nearly 39 percent of the articles on SS were published in journals that published two or less than 54 2 Journal of International Information Management, Vol. 12 [2003], Iss. 2, Art. 5 http://scholarworks.lib.csusb.edu/jiim/vol12/iss2/5 ' 11 r Selection Problem Journal of International Technolosv <& Information Manasement tv/0 ;ai-ticles on the subject. Approximately 22 percent of the articles appeared in journals that published only one article in the period under review. Journal Outlets of Selected Articles' # of Papers Percentage High Contributors 42.13 In ternational Journal of Purchasing and Materials Management 13 8.18 International journal of Physical Distribution and Logistics Management 10 6.29 Jou.mid of B usiness Research ID 6.29 Purchasing 9 5.66 The journal of Supply Chain Management A Global Review of Purchasing and Sufiply 7 4.40 Intemalional Journal of Production Economics 6 3.77 Joumiil of Purchasing and Materials Management 6 3.77 Supply Chain Management: An International Journal 6 3.77 Medium Contributors 18.90 European Journal of Operational Research 4 2.52 International Journal of Operations & Production Management 4 2.52 Production & Inventory Management Journal 4 2.52 Europeiin Journal of Purchasing & Supply Management 3 1.89 lnl:ernational Journal of Retail & Distribution Management 3 1.89 .lournal of Operations Management 3 1.89 Logistics Focus 3 1.89 Supply Management 3 1.89 Low Contributors 38.97 ITecision Sciences 2 1.26 Industrial Marketing Management 2 1.26 Integrated Manufacturing Systems 2 1.26 International Journal of Logistics Management 2 1.26 Interntitional Journal of Physical Distribution & Materials Management 2 1.26 Journal of Accounting and Public Policy 2 1.26 J ournal of Cost Management 2 1.26 Journal of Supply Chain Management 2 1.26 Long Range Planning 2 1.26 Mtinag.ement Science 2 1.26 Production & Inventory Management Review & Apics News 2 1.26 Purchasing & Supply Management 2 1.26 British Journal of Management 2 1.26 IntemEitional Journal of Physical & Logistics management 1 0.63 Logistics Information Management I 0.63 Logistics Management & Distribution Report I 0.63 Production & Operations Management I 0.63 Others'' 35 20.07 Table 1; Frequency of Supplier Selection in Journals 3 Bhutta: Supplier Selection Problem: Methodology Literature Review Published by CSUSB ScholarWorks, 2003 Journal of International Technoloev & Information Mana2ement Volume 12. Number 2 Classification of Articles by Content The literature was classified into seven broad categories based upon the content of the articles as shown in figure 1. It maybe noted that the articles considered have to do primarily with SS and not necessarily other aspects of purchasing and supply chain management. The classification schema used is based on earlier work by researcher including Weber (1991) and Ellram (1993) with some modifications. In the vast majority of literature the issues of supplier selection and evaluation has been dealt with synonymously. The author acknowledges that there is a conceptual difference between selection and evaluation of suppliers and this distinction is depicted in Figure 1. However the