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

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