Small and Medium Enterprises' Supplier Selection Approaches

Abstract

Undoubtfully, successful performance of small and medium-sized enterprises (SMEs) greatly depends on the ability of their management to integrate the complex network of business relationships in selecting suppliers. The purpose of this paper is to explore the supplier selection approaches of small and medium enterprises (SMEs). The main approaches followed are exploratory- and descriptive research aimed at exploring and describing how SMEs choose their suppliers. The most favoured criterion (factor) for supplier selection was flexibility, with delivery being the second most preferred followed by the financial status and capabilities and motivation of the supplier. The failure rate for small businesses is high and the results of this study could advise small businesses which criteria to pay attention to, to prevent business failure. As competition is fierce in the SME sector, it is important to choose suppliers that meet ISO 14000 certification in addition to ISO 9000 quality certification, as it shows customers that these SMEs offer quality products and are environ-mentally conscious.