Analysis of the system of assessment and selection of suppliers in researched Central Europe enterprises

Abstract

PURPOSE: This paper presents the methodology of the system of assessment and selection of suppliers on the example of a selected service enterprise. A basic review of literature on multi-criteria methods is presented and phases of the supplier assessment and selection process necessary to develop a model of supplier selection in service industry enterprises are defined.

DESIGN/METHODOLOGY/APPROACH: In order to realize the intended conception, a detailed assessment of suppliers was made according to the selected methods. The first verification method to support the company's supplier selection and assessment process is the local analysis, which includes the arithmetic average method, the weighted average method, and the percentage method. Another scoring-based supplier assessment and selection method is the matching matrix. Graphical verification is another example of multi-criteria verification based on local analysis which is an extension of it. Another example of supplier verification is the method of qualitative variables. The last method used to assess and select suppliers is the AHP analytical hierarchical process. Supplier selection based on this model requires the enterprise to determine the most important criteria that will be used to assess suppliers.

FINDINGS: Of all the verification methods analysed, the analytical hierarchy process model proved to be the most effective and it is on this basis that enterprises should make their supplier selection.

PRACTICAL IMPLICATIONS: A thorough analysis of the enterprise's relations with suppliers carried out in the practical part allowed to identify the problem of the company's high dependence on suppliers. Despite constant supervision of cooperation and a restrictive selection process, there are still shortages of supplies and errors in orders resulting from suppliers' inattention.

ORIGINALITY/VALUE: Formulating the right rules of conduct in the process of selecting and assessing a supplier and applying the most optimal method will make it possible to solve many existing problems in the company's procurement logistics.