Supply Base Being Assessed And Managed Commerce

Every organisation needs to buy materials, service and supplies to support operation. Traditionally the role of purchasing was to obtain the desired resource at the lowest possible price from a supplier. Today, this traditional view of purchasing has changed, the modern focuses are on total spend and the development of relationships between buyers and suppliers. Schary and Skjott-Larsen (2002) address that the role of procurement has become a strategic issue, relationships between buyer and supplier have shifted from arm's length to close collaboration with key suppliers. Therefore, it is very important task for the organisations to interface and effectively to manage its supply base in order to assess those more suitable for potential long-term collaboration. On other hand, supply base is potential to be used as competitive advantage in competing market. Today, as the global sourcing is increasing, organisations operating with global supply chain (SC) are facing more challenges on supply base management (SBM).

According to Bowersox, Closs and Cooper (2007), successful procurement depends on locating or developing supplier, analyzing their capabilities, and selecting and working with those suppliers to achieve continuous improvement. In fact, supply base appraisal is known as a process.

Supply base assessment

According to Daniel and Robert (1999), before selecting and development of suppliers, organisation should identify strategic SC needs, search for competitive suppliers, establish performance metrics and assess suppliers, and supply base rationalization. Based on end-customer requirement and new product development target, organisation should identify the overall business needs in terms of cost-reduction goals, technology road maps, global market expansion plan, etc, search for competitive suppliers to match organisation's strategic SC needs. When potential suppliers have been sourced, the next step is to evaluate those suppliers.

However, lots of companies and organizations have paid more on supplier failure because of a lack of effective supplier evaluation. Emmett and Crocker (2006) state that when seeking to approve suppliers, procurement departments must take effective actions include identifying potential suppliers and evaluating their capabilities in terms of:

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