An investigation in the factors influencing vendor selection in procurement of goods and services: A case of Plan International Zimbabwe
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Plan International Zimbabwe (PIZ) recently adopted a cost saving strategy within which vendor selection is recognized as instrumental in achieving this vision. Unfortunately, literature concurs that vendor selection is evolving into a more fluid and elusive multi-criteria decision making problem. This is evident in PIZ in which despite well-established and documented procurement system, cases of substandard goods being purchased, delays, and unfulfilled orders are increasing reports in the company’s risk register. The donor community is raising concerns and possibility of withdrawing financial support to the organization is drawing towards reality. PIZ admits that urgent significant researches are required to find lasting and sustainable solutions. This study therefore intended to determine supplier selection criteria, influence of cost, quality, and technical capability on the supplier selection performance at PIZ. A census of the 98 procurement and logistics staff within PIZ were surveyed using a five-point Likert scaled structured questionnaire. The self-administered questionnaires were distributed physically and electronically by the researcher. A period of three weeks was given for the data collection. Percentage response rates and Cronbach’s Alpha reliability tests were done to analyse the response and reliability measurements of the study. Frequency tables and percentages were used to provide an insight into the demographics. Factor analysis and bar graphs using SPSS version 20 were conducted to present, analyse and interpret the supplier selection criteria. Correlation and regression analysis were then conducted to identify the influence and association between each selection criterion on the supplier selection performance. The results showed that extant supplier selection techniques and criteria at PIZ are unsatisfactory and might require adjustment to reflect the unique circumstances in which the firm is located so as to avoid unnecessary costs and inefficiencies. The supplier selection criteria for non-profit making entities such as PIZ are different from those of profit-making organisations. Non-profit making entities seem to consider selection criteria that heightens non-financial and qualitative issues such as political and environmental hazard risks within which the supplier is located. The predictive regression model was a good fit of the data with all the predictor variables moderately predicting supplier selection. Organizational profile, cost, technical capability and quality can predict supplier selection in that relative order of importance. PIZ to restructure its supplier selection criteria to reflect appropriate variables that improves the performance and value of its supply chain. Exclusion of certain cost elements like operational costs and costs associated with losses accrued from delays and rejects cannot be ignored. The applied theories (grey system, resource based view, lean supplier competence model and transaction cost economics theories) could explain greater variation in supplier selection but are more generalized and appear as grant theories which require to be localized. Future researches should attempt to use conceptual frameworks like the one adopted in this study. In addition, further studies might be pertinent to holistically analyse the selection criteria under the supplier-buyer perspectives. Supplier selection for non-profit making entities is still scanty though this study forms one of the foundational works towards that end. More work is required to provide extended view of the trends of supplier selection criteria within the context of non-profit making organisations. Investigation for the emerging supplier selection criteria: technology, innovation and the green revolution need be explored.