Supplier Relationship Management for Long Term Partnership
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Date
2017-10
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Publisher
AAU
Abstract
Currently, in most public and private organizations procuring goods and services are executed by
bid/tender based system. The system is giving the award to low price competitive bidders. This
bid/tender based procuring system is now days practiced in different public and private
organizations in Ethiopia. Even if the goal of competitive bidding is to procure goods and
services in the promotion of efficiency, i.e. the selection of the supplier with the lowest price or,
more generally, the achievement of the best “value for money, it has deficiencies to complete
works on time, with specified cost or less and on the required quality on purchased goods and
services. This bid procurement system has a negative impact to execute the public and private
organizations‟ goal efficiently and effectively.
It is believed that qualitative system dynamics model is important for analysis of the problems
which occur in competitive bid system. It is used Vensim software to construct the causal lop
diagram. This study has investigated the problems of bid/tender based procurement system
which are; the difficulty to get the bid document, time consuming to select the supplier and to
give the award, bidder conspiring, lack of innovation and long term vision, law quality goods and
services purchased, vulnerable to corruption, etc. and, then developed a model for long term
supplier relationship management system by qualitative system dynamics model.
Finally; the study advocates that to increase the quality of procured goods and services, to
minimize the delivery time, and to avoid the unnecessary costs, the public and private
organizations should procure goods and services through long term supplier relationship.
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Keywords
procurement, supplier relationship management, long term supplier relationship management, system dynamics Model