Critical Factors for Suppliers’ Assessment and Selection: Empirical Evidence from Public Institutions in a Developing Country

Abstract

This study examined the critical factors that influence the selection and assessment of suppliers in public institutions in Ghana. The study employed both descriptive and survey research design. The study was conducted between April, 2016 and March, 2017. Public institutions in the Brong Ahafo and Ashanti regions of Ghana constituted the population of the study. The study made use of purposive sampling technique to select 100 public institutions. Self-administered questionnaire was used to collect data from the respondents. Descriptive statistical analysis method was used to analyze the quantitative data. The analyses was done in percentages and mean and presented in relevant tables. The study found that the traditional suppliers’ performance measurement approach, based on lowest cost was widely used to assess the performance of suppliers in public institutions in Ghana. Additionally, majority of the institutions applied categorical system and analytical hierarchical process of performance assessment alongside the cost based system. With regards to the specific criteria applied to assess the performance of suppliers, it was revealed that the quality or technical capabilities (e.g. durability, reliability, fitness for purpose and less variance of the products) of the suppliers was a major factor considered. Apart from quality criteria, cost criteria (price level, price stability and discounts and terms of payments offered by the suppliers) and delivery ability of the suppliers were also used to assess the performance of suppliers. It is recommended that the management of the institutions should employ modern performance management tools such as IBS’s Emptoris, Ariba, Ecnet, and super decision or mathematical software such as Microsoft Excel, Oracle, SAP, Maple to enable effective assessment of suppliers’ performance.