Title

Preliminary Supplier Risk Evaluation

Presenter Information

Jason Loyles
Edward Lopez

Document Type

Oral Presentation

Start Date

16-5-2013

Abstract

Supplier selection is of utmost importance when sourcing goods locally and globally. This is especially true for smaller companies with limited resources and less financial flexibility. Selecting a reliable supplier can be difficult for those without internal knowledge of a potential supplier’s organization. This research paper focuses on a simple and effective approach for outsiders to calculate and quantify the risks associated with new suppliers, without needing to gather complicated internal information or enlist the services of a consulting firm. The primary purpose of our research was to provide users with a baseline in which to assist in decision making when selecting suppliers, taking into account financial, country, and operational risks. Research was conducted using numerous academic databases, periodicals, textbooks, and internet resources. An equation has been constructed with various data inputs to arrive at a simple quantitative measurement of supplier quality/reliability; the equation’s benefits are its time efficiency and zero cost to the user. The equation was tested on several large companies who are top-performers in their industry, with results confirming our hypothesis. Supplier risks are weighed before selection is made.

Faculty Mentor(s)

Kun Liao

Additional Mentoring Department

Operations and Supply Chain Management

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May 16th, 8:00 AM

Preliminary Supplier Risk Evaluation

Supplier selection is of utmost importance when sourcing goods locally and globally. This is especially true for smaller companies with limited resources and less financial flexibility. Selecting a reliable supplier can be difficult for those without internal knowledge of a potential supplier’s organization. This research paper focuses on a simple and effective approach for outsiders to calculate and quantify the risks associated with new suppliers, without needing to gather complicated internal information or enlist the services of a consulting firm. The primary purpose of our research was to provide users with a baseline in which to assist in decision making when selecting suppliers, taking into account financial, country, and operational risks. Research was conducted using numerous academic databases, periodicals, textbooks, and internet resources. An equation has been constructed with various data inputs to arrive at a simple quantitative measurement of supplier quality/reliability; the equation’s benefits are its time efficiency and zero cost to the user. The equation was tested on several large companies who are top-performers in their industry, with results confirming our hypothesis. Supplier risks are weighed before selection is made.