A Study On The Supplier Selection Process For BD Company

Effective supplier selection plays a vital role in creating a competitive advantage for an organization and having a positive impact on its performance(Hsu et al., 2006). In the recent 20 years, China became a worldwide production powerhouse are ideally be regarded as the best outsourcing country. In the outsourcing activities, it is very often that the managerial part which consists of strategy, e.g., documentation, process definition, is often defined and centralized by the mother company. Since the outsourced country has difficult culture and different level of development and education, it is very common that the mother country determined processes are not applicable in the outsourced country. The conflict comes and the outsourcing become less competitive then it should be. BD, a German DIY multichannel retailer, as one part of that kind of multinational company who purchase goods from China through their International Purchasing Office in China, is also facing such conflicts. The direct impact is that the supplier selection is hardly to be carried out with the expected outcome with current supplier selection process.The significance of this thesis lies in close linking theories to practice by using the theories to solve the problems occurred in practice. The literature review part reviewed the history International Procurement Office, the author understand why the international purchasing office are regarded as operational or support function, instead of any strategic or management function. This understanding helps the author to look at his practice in a rational way.Followed by the literature review on the theories and tools in the field of supplier selection, business process, business process improvement and supplier selection process, combining with the three cases happened in BD supplier selection process, the thesis uses these management theories and tools to analyse these three cases in detail so as to find out the problems existing in BD's existing supplier selection process. Finally, the thesis uses the industry benchmarking method to evaluate and optimize BD's current supplier selection process by referring to the Supplier Selection and Evaluation Step diagram(Figure 2-4) summarized by Ma Shihua.The supplier selection process was initiated by the mother company in Europe, and the optimised process was first proposed by the Chinese employees in China sourcing office, which is very rare in practice. Because China sourcing offices are often operated by the mother company as an operational layer rather than as an innovator or management involved in developing a corporate strategy.The aim of this thesis is not only to solve the practical work problems by using the management theories and tools, but also provide reference for other Chinese colleagues who works in the China sourcing office to work more strategically with management view, as well offer reference to the mother companies who purchasing from China, to look at their supplier selection process from Chinese employee perspective.