Supplier Selection and Business Process Improvement

Supplier Selection and Business Process Improvement:
An Exploratory Multiple Case Study

Reza Mohammady Garfamy
Business Economics Department
Autonomous University of Barcelona, Barcelona, Spain
E-mail: garfamy@yahoo.com
Abstract: One of the most critical gaps in the literature is the lack of empirical research pertaining to what attributes
of the supplier influence the buyers process improvement and another is the lack of theoretical framework relating
to how and why the buyers process improvement is affected by the supplier selection criteria. This study aims to fill
these gaps and empirically explore the relationship between supplier selection and Business Process Improvement
(BPI). As an exploratory study, it also intends to identify important variables, formulate more precise questions,
refine issues and generate hypotheses for the further research.
Keywords: supply chain management; purchasing; outsourcing; supplier selection; business process improvement;
transaction cost approach; continuous process improvement; business process reengineering; business process
benchmarking; Spain.
Reference to this paper should be made as follows:

Mohammady Garfamy, R. 2004, Supplier Selection and Business Process Improvement: An Exploratory Multiple
Case Study, Autonomous University of Barcelona, Barcelona.
Introduction
A variety of changes in the business environment including globalization, accelerated global

competition, decreased governmental regulation worldwide, intensified environmental concerns,
increased rate of technological change as well as increasingly demanding customers, fast product
development cycle time, short product life cycle, increased product complexity and quality
consciousness are leading firms towards development of long-term strategic partnerships with a
few competent and innovative suppliers and collaborate with them in non-core process
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Supplier Selection and Business Process Improvement: An Exploratory Multiple Case Study
outsourcing to improve organizational performance and generate long-term competitive
advantage. This structured approach to the design of supply chain will result in an organization
that is an appropriate mix of the companys own capabilities with those of partners or suppliers
in a relationship that is consistent with the strategy of business. For this reason, the suppliers
should be selected based on how their actions will impact all competitive elements of the supply
chain. It indicates that one of the competencies essential to the supply chain success is an
effective purchasing function (Tracey & Tan, 2001).
Operations management has traditionally dealt with optimizing some or all of a companys
internal processes. However, the academics and practitioners alike have recently shown interest
in optimizing the entire set of processes, both internal and external to the firm, which provides
value to the end customer. This perspective is a potentially powerful way for companies to
ensure customer satisfaction. However, such high level of customer orientation, which results in
fast and reliable delivery of high quality products or product innovation, no longer ensures
competitive advantage (Mertins et al., 1996, cited in Lee & Chuah, 2001). The researchers like
Hiatt (1996) are well aware that improving business processes is also paramount for businesses
to stay competitive in todays marketplace. The traditional view of quality and performance has
been reassessed and Business Process Improvement (BPI) is introduced to provide an effective
and comprehensive means to improve a companys performance (Zairi, 1997).
It is now imperative to know what qualifications and characteristics of suppliers and their
relationships with buying firms are considered important in relation to BPI and how and why
they improve firms processes. In this research we try to find the answers of these questions.
Problem statement and general purpose of the research
2.1
Problem statement
The study of relationship between supplier selection and BPI has received very little scrutiny
from scholars and practitioners. As a result, there are some crucial gaps in the literature on this
subject. One of the most critical of these gaps is the lack of empirical research pertaining to what
attributes of the supplier influence the buyers process improvement and another is the lack of
theoretical framework relating to how and why the buyers process improvement is affected by
the supplier selection criteria.
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It is apparent that companies have to manage in an era of global competition, which is forcing
many firms to rethink their operations strategy. True sourcing represents one method that can be
used to obtain the world-class performance levels that are needed to meet future challenges. The
organizations are viewing the purchasing not only as an infrastructural or support function, but
also as a strategic weapon (Humphreys et al., 1998). However, a successful purchasing program
cannot be carried out unless cooperative buyer-supplier relationships are maintained. As
companies adopt new manufacturing strategies, such as JIT, it is necessary to consider those
factors that influence the buyer-supplier relationships. When management adopts BPI philosophy
throughout the organization, the organizations begin to make comprehensive changes to their
policy towards suppliers (Hanan, 1991, cited in Bhatt, 2000). As a part of this process, it is
important to establish appropriate criteria for assessing supplier performance. Similarly, the
customer attributes need to be considered as well since each party, supplier or buyer, can have a
positive or negative effect on the success of relationship. The firms that excel must implement
strategies to achieve cost reduction, continual quality improvement, increased customer service,
delivery improvement and reduced concept-to-market product cycle time. Consequently, it is
important to evaluate suppliers according to criteria that reflect the BPI aspect of the sourcing
decision.
Although there is a plenty of researches about supplier selection and BPI separately, these
studies have not looked at the relationships between them as they have not accounted for the
multi-dimensionality of both BPI and supplier selection. Moreover, these studies have not
carefully analyzed the effect of business contextual factors, which are likely to change the
strength of the results.
This study aims to fill these gaps and empirically explore the relationship between supplier
selection and BPI.
2.2
General purpose of the study and main research questions
In light of the importance of supplier selection decision and its growing complexity, this study
proposes to incorporate BPI into a decision-support framework. The overall objective of this
study can be said to be threefold:
To investigate and produce knowledge about the buyers supplier selection decision with
regard to BPI as well as the most important attributes of supplier they consider essential for
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improving business processes along with the assessment of relative importance of each
criterion
To preliminary contribute to enhancing knowledge about how and why supplier selection
criteria relate to BPI criteria
As an exploratory study, to identify important variables, formulate more precise questions,

refine issues and generate hypotheses for the further research.
In this study, the research questions we seek to address are as follow:
What is the relationship between supplier selection practice and BPI practice?
How and why are supplier selection criteria related to BPI criteria?
2.3
Theoretical framework
2.3.1
Transaction Cost Approach
Unlike the frictionless economic system implied by neoclassical theory, Transaction Cost
Approach (TCA) recognizes that the transactions do not occur without friction and labels the
costs, which arise from the interaction between and within firms, as transaction costs. The
transaction costs arise wherever there is any form of economic organization (i.e. within a
vertically integrated firm, in a market or in a command economy) and are divided into market,
managerial and political transaction costs. It would seem then that the social morality,
confidence, trust and institutional framework are all interrelated. It is noteworthy that minimizing
absolute or relative transaction costs is not an economically reasonable aim. Rather, what matters
for the judgment of the economic quality (efficiency) of an economic entity is its total economic
results not its level of transaction costs (Furubotn & Richter, 2000).
Williamson (1979) outlines the cost-determining attributes of individual transactions
(dimensions of transaction) as their frequency (i.e. volume/number of transactions per time
period), the environmental political, social or economic risk surrounding them (uncertainty or
ambiguity as to transaction definition and performance) and the level to which the inputs
required to achieve them are dedicated (asset specificity) to the transactions concerned. The asset
specificity can arise in any of 3 ways; namely, the site specificity (resource immobility), physical
asset specificity (technology advantages) and human asset specificity (know-how advantages)
(Williamson, 1981). In a world where individuals are subject to bounded rationality (limited
judgment) and opportunistic behavior (guile and self-interest) and therefore small numbers
4

bargaining (many bargaining situations are infrequent or involve small quantities where the cost
of obtaining full information is prohibitive, i.e. as in an oligopoly) and information impactedness
(asymmetrical distribution of information among the exchanging parties, which means that one
party might have more knowledge than another), these characteristics have a major influence on
the efficiency of alternative transaction modes (Williamson, 1985). The exchange relations are
not always cooperative and therefore the notion of rationalizing and economizing on transaction
costs in the comparison of the different modes of organization becomes crucial.
For efficient governance, 3 main structures emerge with reference in particular to the
volume/number of transactions and the characteristics of investments required for consummating
them. The market governance implies that the alternatives are available which protect each party
against opportunistic self-interest by the opposing party to the contract; trilateral governance
implies arbitration in resolving disputes and evaluating performance; bilateral governance
implies continuing contractual contact, but with the autonomy of the parties maintained and
finally unified governance implies internalization of the contracting process.
TCA emphasizes that it is transaction rather than technology that determines the efficacy and
efficiency of exchange by one mode of organization as compared with another (market or
internal organization) and in this respect the TCA logic can be envisaged when a firm is faced
with the following 3 possibilities:
First, the ownership of certain assets (e.g., those that comprise the firms core competence)
sufficiently makes it obvious that a careful comparative assessment is unnecessary (e.g., site
specificity)
Second, in the case where self supply is clearly uneconomical, the market supply is the
obvious choice (e.g., raw materials)
Third, for certain assets, a make or buy decision can only be made after assessing the
transformation and transaction cost consequences of alternative modes.
The crucial issue is how the choice between firm and market governance structures is made for
decisions related to the third point above.
Williamson (1985) pays greater attention to the relational contracts between firms, but construes
them as features of hybrid forms of organization lying on a continuum between markets and
hierarchies. In between the 2 extremes of spot market transactions and vertically integrated firms
lies a myriad alternative ways of coordinating economic activity from Strategic alliances and
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formal written contracts to Quasi-vertical integration (Joint ventures, Franchises and Licenses),
Tapered and Full vertical integration. According to TCA, one of the determinants of vertical
coordination is the nature and level of transaction costs, wherein a change in the transaction costs
arising from the exchange may lead to a change in the management of that supply chain. As
uncertainty and asset specificity increase and frequency of transaction decreases, we move along
the spectrum of vertical coordination from spot market towards the extreme of vertical
integration.
Williamson (1993) argues that TCA deals predominantly with dyadic contractual relations.
Viewing the firm as a nexus of contracts, the object is to prescribe the best
transaction/governance structure between the firm and its intermediate product market suppliers.
The transaction cost economists argue that the nonstandard forms of contracting have the
purpose and effect of economizing on transaction costs (Williamson, 1985). Considering the
hazards of the spot market and contractual incompleteness, the transaction costs economists
predict the parties will adopt appropriate contractual (governance) structures to prevent ex post
opportunism and thus promote an efficient level of investment.
In essence, the supply chain partnering is an arrangement by which separate companies share
administrative authority, form social links and accept joint ownership of the operating policies.
Looser, more open-ended arrangements replace highly specific arms-length contracts to remove
the firms boundaries and permit easier exchange of knowledge.
2.3.2
Outsourcing
In todays global economy, the enterprises are increasingly striving to develop long-term
strategic partnerships with a few competent and innovative suppliers and collaborate with them
in non-core process outsourcing to acquire resources, develop technology and access markets.
These partnerships are strategic in nature and involve the commitment over an extended time
period and sharing of information, risks and rewards of the relationships.
The conceptual basis for outsourcing is Williamsons theory of TCA, which determines the
internal and external boundaries of the firm. The idea of forming an outsource manufacturing
system is meant to establish a dynamic organization through the synergetic combination of
dissimilar companies with different core competencies to perform a given business project to
achieve maximum degree of customer satisfaction (Choy & Lee, 2003).
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The upsurge in outsourcing over the last years has been fuelled by arguments from management
gurus and leading academics that an organizations competitive advantage stems from its ability
to identify, concentrate on and develop its core competencies and activities and outsource
anything which is non-core (Prahalad & Hamel, 1990). It is crucial to approach the outsourcing
decision from an activity perspective within the companys value chain. When an organization
is viewed from the perspective of the value chain, it is much easier to recognize the value adding
activities, which contribute to the organizations competitive position.
A concept that is frequently linked with outsourcing and value chain perspective is core
competence. Prahalad and Hamel (1990) contend that the real sources of competitive advantage
are to be found in the managements ability to consolidate corporate-wide technologies and
production skills into competencies that empower individual businesses to adapt rapidly to
changing business opportunities. They argue that the core competencies are the collective
learning in the organization, especially how to coordinate diverse production skills and integrate
multiple streams of technologies. The competencies are the skills, knowledge and technologies
that an organization possesses on which its success depends. The embedded skills that give rise
to the next generation of competitive products cannot be rented-in by outsourcing. These core
competencies underpin the ability of the organization to outperform the competition and
therefore must be defended and nurtured. Instead of developing a strategy based on thinking only
of dominating markets, it is more beneficial to think in terms of core competencies, which will
segment the organization in a totally different way (McIvor, 2003).
Influenced by core competency thinking, many companies have been attempting to reorganize
their value chains and focus on a number of core activities where they can achieve and maintain
a long-term competitive advantage and outsource all other activities where they do not have
world-class status. It involves the buyer organization attempting to develop and manage a
competence-based supplier network. It, in turn, increases the dependence on the supply base and
makes the supply management a key success factor.
The trend towards the company outsourcing activities in the value chain can be attributed to
reasons such as the most competent source, increased flexibility, reduced risk exposure, cost
reduction and supplier management (McIvor, 2003). Rothery and Robertson (1995) (cited in
Burnes & Anastasiadis, 2003) found that the organizations are most likely to outsource
operations that are labor-intensive, show considerable peaks and troughs of activity or activities
7
which are perceived to be commonplace and not unique to the organization and listed the
following types of activities as ones which could more easily be outsourced: those which are
resource-intensive either in running costs or capital investment, relatively discrete areas,
specialist and other support services, those with fluctuating work patterns in loading and
throughput, those subject to a quickly-changing market especially where it is costly to recruit,
train and retain staff and those with a rapidly-changing technology requiring expensive
investment. Morris and Imrie (1992) (cited in Burnes & Anastasiadis, 2003) also found that the
companies use outsourcing to extend their product range, test the market for new products,
supply short demand products and avoid having to produce small batches of products
themselves, which could disrupt long-run production schedules. In reviewing outsourcing in the
UK, Croom (2000) found that the main benefits were the direct cost reduction, conversion of
fixed cost to variable cost, suppliers investment in innovation and improvement in time to
market for new products and services. These researches have indicated that a firm will source
outside its home borders if it expects to achieve dramatic and immediate improvement in 4
critical areas; namely, cost, quality, cycle time and service. The other factors which influence the
international sourcing decision include the introduction of competition to the domestic supply
base, establishing a presence in a foreign market, satisfying offset requirements, increasing the
number of available sources and reacting to the offshore sourcing practices of competitors
(Humphreys et al., 1998).
As the above shows, there are many benefits the organizations can achieve through contracting
out the activities. Given the complexity of many of the activities that the organizations outsource,
it is not surprising that some organizations experience problems. According to McIvor (2000), 3
key problems encountered by companies in their efforts to formulate an effective outsourcing
decision are the lack of strategic view of outsourcing decisions, no formal outsourcing process
and limited cost analysis. Lysons (1996) (cited in Burnes & Anastasiadis, 2003) found that the
main problems the companies found in contracting out the activities were the quality of service,
communication with suppliers, redundancy costs, coordinating different suppliers, reduced
flexibility, dependence on and communication with a few suppliers. In a similar vein, Minoli
(1995) (cited in Burnes & Anastasiadis, 2003) and Lonsdale (1999) found the following
disadvantages of outsourcing: the loss of control, difficult to reverse decision, long-term
contracts can lead to a lack of flexibility, requires management of organization/outsourcee
8

alliance, outsourcers can put themselves at risk from lack of responsiveness, poor service, etc.,
subject to new costs if changes are required, difficult to quantify advantages and possibility of
being locked into older technology, supplier opportunism, rising costs of supply, declining
quality and an inability to influence the terms of the relationship. The recurring problems such as
cultural and communication barriers, increased lead times, increased transport costs, employee
travel costs and perceived risks associated with sharing new technologies are also problems often
encountered by the companies which are new to overseas sourcing. In addition, the firms that are
attempting to develop JIT purchasing systems which require smaller and more frequent
deliveries and reduction of inventories (Ansari & Modarress, 1988) face longer lead times and
logistics difficulties when confronted by the decision to use a foreign source (Handfield, 1994).
Many of the above problems experienced by the firms are avoidable because they have been
caused by poor management decision making. In planning for a far-reaching program of
outsourcing, those involved in decision making will need to consider the future strategic position
of the organization and what resources or activities will be required to achieve it. Furthermore,
they will need to have a precise understanding of the supply markets, dynamics of purchasing
and supply issues and how to deal with the internal implications of transference of a range of
business activities (Lonsdale, 1999). An assessment of the nature of competitive forces, customer
requirements, worldwide market opportunities and supply-base location is the first step in
determining a firms strategic posture leading to an adaptive restructuring of its global sourcing
networks (Handfield, 1994). In addition, the evaluation of whether an activity should be
outsourced by a firm affects both the firms suppliers and its customers. Hence, the examination
of strategic sourcing involves how sourcing influences the entire value chain, creating
competitive advantage to the firm through a combination of internal core competencies and
outside suppliers strengths.
The outsourcing trend shows no sign of abating either in terms of the percentage of firms using
the practice or in terms of the range of business activities that the practice is encompassing.
There is a clear consensus in the literature of the importance of outsourcing decision and some
general guidance on the factors that should be considered including the cost analysis, associated
risks, supplier influences and strategic perspective (McIvor, 2000). For those organizations that
get it right, the outsourcing can be a significant source of competitive advantage.
2.3.3
Supplier selection
The literature and practice have seen the growth of buyer and supplier relationships from a focus
on operational purchasing relationships to strategic partnerships and boundary evaporation based
on long-term contracts, mutual support, non-adversarial negotiations and information and risk
sharing (Min, 1994; Choy & Lee, 2003). Numerous manufacturers have been downsizing,
concentrating on their core competencies, moving away from vertical integration and
outsourcing more extensively (Leenders et al., 1994; Goffin et al., 1997). According to Leenders
et al. (1994), in this process the need to gain a competitive edge on the supply side has increased
substantially.
The effect of sourcing decision on competitiveness is not limited to cost control alone, but also
influences the performance of conversion system along the other competitive dimensions of
quality, dependability, flexibility and innovation (Hayes et al., 1988).
The real productivity, design and quality improvements are not obtainable unless the suppliers in
the collaborative relationship innovate to the best of their abilities in conjunction with the buyer
organization (Humphreys et al., 1998). The factors which determine how close buyer-supplier
relationships will become are the degree of mutual dependence, length of cooperation, extent of
joint projects and technological links and degree of economic satisfaction with the cooperation
(Monczka et al., 1995).
With the emergence of global competitive challenges and resulting shifts in business paradigms,
the academics and practitioners alike have identified the growing importance of purchasing in
corporate profitability (Goffin et al., 1997). The purchasing is not a purely tactical exercise
anymore instead it is now recognized as a strategic function because the external suppliers now
exert a major influence on a companys success or failure (Goffin et al., 1997; Bhutta & Huq,
2002). Therefore, a key issue that the purchasing must address is the effective management of
supplier network including the identification of supplier selection criteria, supplier selection
decisions and monitoring of supplier performance (Karpak et al., 1999).
The purchase decision process of organizational buyers has become increasingly a complex,
multidimensional and multifunctional activity as the traditional role of purchasing has
significantly changed over the past few years and the organizations increasingly globalize their
sourcing activities. In todays highly competitive and interrelated manufacturing environment,
the effective selection of suppliers is very important to the success of a manufacturing firm
10

(Humphreys et al., 1998; Weber et al., 2000a). The involvement of a large number of closely
interrelated decisions regarding financing, negotiation, distribution, procurement and product
quality assurance at the source implies the significance and long-lasting impact of supplier
selection on sourcing (Min, 1994). There is a number of reasons why the selection of suppliers is
more important today than it was in the recent past as follows:
The increasing adoption of JIT manufacturing practices has placed a new emphasis on supply
base reduction (streamlining sometimes to single source) that brings greater interaction and
long-term relationship between buyer and supplier which may lead to a sharing of resources
(Karpak et al., 1999) to improve quality, reduce costs and emphasize continuous
improvement in all areas of interaction and, as Pagell and Sheu (2001) state, eliminate
mistrust between buyers and suppliers.
The strategy of involving suppliers early in the product design process (referred to as
concurrent engineering) is recognized as a significant contributor to reducing costs and
improving quality in the production cycle.
The development of advanced communication in information systems through Electronic

Data Interchange (EDI) is also facilitating the closer coordination and interaction between
buyer and supplier.
A growing importance of team involvement in the evaluation and selection of suppliers from
various functional areas plays a significant role in overall performance of the buying firm
(Pearson & Ellram, 1995).
Therefore, the ability to manage this function effectively should have a major impact on
organizational competitiveness and profitability.
The companies in order to attain the goals of low cost, consistent high quality, flexibility and
quick response have increasingly considered better supplier selection approaches. These
approaches require cooperation in sharing costs, benefits and expertise and in attempting to
understand one anothers strengths and weaknesses, which in turn leads to single sourcing and
long-term partnerships (Bhutta & Huq, 2002).
Several factors have been identified by Dzever et al. (2001), which impact supplier selection
decisions of organizational buyers. These factors, which are both of a firm-specific nature as well
as environmentally determined include the composition and functional specialization of members
of the decision making unit, patterns of buyer-seller interaction and relationship, role of
11
intermediaries in the decision process and impact of environmental factors such as market
structure, technology, economy and culture on these decisions. Moreover, the purchase decisions
are also influenced by 3 dimensions of buyer behavior identified as technical, commercial and
social (Dzever et al., 2001). It is thus by having a correct understanding of these factors that one
can fully appreciate the decision process of organizational buyers in a wider perspective.
Since the supplier selection process encompasses different functions such as purchasing, quality,
production, etc. within the company, it is a multi-objective problem encompassing many tangible
and intangible factors in a hierarchical manner (Karpak et al., 1999; Bhutta & Huq, 2002). The
supplier selection process is inherently multiobjective in nature because typically more than one
criterion (e.g., price, quality, delivery performance) needs to be considered and evaluated in
selecting the suppliers and monitoring their performance (Talluri & Sarkis, 2002). When
evaluating sources, the single most important task for buyers is assessing the key competitive
factors in their industry and translating those dimensions into supplier evaluation criteria. An
evaluation of best-in-class performance in product and process technology, quality, delivery and
design flexibility is the key determinants in this decision (Handfield, 1994). Therefore, a buyer
should analyze and evaluate the potential threats when selecting suitable supplier resulting from
a systematic selection process and its corresponding attributes.
The source selection decision is highly complex and the most difficult responsibility of
purchasing. First, such a decision involves more than one selection criterion when choosing
among the available suppliers. It is well established that the supplier selection decisions are often
driven by multiple criteria and there is also a very large number of options (Weber et al., 2000b).
Additionally, the members of purchasing teams bring diverse criteria to the purchasing decisions
driven by their departmental interests such as cost, quality and delivery reliability. Hence, in
practice, the purchasing teams decisions may be influenced by multiple decision criteria that are
context specific (Goffin et al., 1997). The relative importance places on evaluative criteria varies
largely in accordance with the nature of selection situation and is complicated further by the fact
that some criteria are quantitative (price, quality, etc.) while the others are qualitative (service,
flexibility, etc.). Also, the establishment of proper weights for each evaluation criterion increases
the level of uncertainty inherent in the selection process and the decision making becomes
difficult when the available information is incomplete or imprecise (Weber & Current, 1993). In
other words, there may not be a generalized consensus on how to weight the relative relevance of
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different criteria since they are highly firm- and situation-specific. Nevertheless, a critical part of
the overall supplier selection process consists in the determination of relative importance of each
of the criteria (Ellram, 1990).
Second, the criteria included in the supplier selection process may frequently contradict each
other (e.g., lowest price against poor quality). Therefore, the purchasing team must take into
consideration and manage the trade-offs among the criteria. It requires substantial judgment to
assess a wide range of trade-offs present, recognize all the alternatives available and make a
decision, which balances both the short- and long-term needs of an organization. In multi-criteria
supplier selection problems, there is generally no supplier, or combination of suppliers, that has
the best performance on all the criteria. Another complicating factor results from the fact that the
suppliers may be able to alter their performance on the relevant criteria (Weber et al., 2000b).
A third complication surrounding the supplier selection decision arises from internal policy
constraints and externally imposed system constraints placed on the buying process. The internal
policy constraints exist either implicitly or explicitly in the buying process for such matters as
the number of suppliers to employ, minimum and maximum order quantities, etc. Similarly, the
suppliers may impose constraints on the buying process such as their own minimum order
quantities or a maximum order quantity based on their production capacity or their willingness to
do business with a particular firm (Weber et al., 2000a).
Fourth, as the organizational requirements and market conditions change, the importance of
analysis of tradeoffs among the selection criteria may be increased. The analysis may necessitate
the addition of new criteria and reordering of existing ones. The set of relevant supplier selection
criteria is believed to change over time reflecting the business and competitive environments.
Ellram (1990) suggested that the buyers involved in strategic partnership supplement traditional
selection criteria with a new set of selection criteria and termed those criteria as soft criteria.
The soft criteria cover issues including the management compatibility, goal congruence and
strategic direction of supplier firm (Ellram, 1990; Krause, 1999). In a similar vein, Weber et al.
(2000a) stated that the strategic decision making influences the relative importance of different
criteria.
Although choice criteria used in supplier evaluation and selection vary across products and
services and purchase situations, previous researches have identified some similarities in the
purchase decisions. The preferences are generally considered to be a function of case-specific
13
evaluations of price, quality, delivery and service. The relative importance of these selection
criteria has been examined over various purchasing situations (Bevilacqua & Petroni, 2002).
In order to counter these procedural aspects, numerous formal techniques have been developed in
the literature based on particular conceptual approaches. These techniques differ in their ease of
use, level of decision subjectivity, required resources to use the technique and implementation
costs.
Each of these techniques has its own advantages and drawbacks. While some are more effective
at providing an answer to the multi-criteria nature of supplier selection problem, the others are
more satisfying when dealing with the heterogeneity of evaluation criteria (quantitative versus
qualitative attributes) and some are specifically suggested for handling trade-offs between
criteria. Some are the best suited for the problem definition and criteria formulation phases while
the others are expressly designed for the pre-qualification (sorting methods) or are used for the
final choice (ranking methods).
Regardless of their strengths, none of these approaches can systematically measure both
qualitative and quantitative criteria and structure complex problems with a large number of
criteria, attributes and alternatives. Furthermore, none of these methods can measure the degree
to which a purchasing managers judgments are consistent in evaluating suppliers (Min, 1994).
The other criticisms of these methods includes the complexity, situation-specific application,
over-reliance on some criteria and insufficient consideration of others (Bhutta & Huq, 2002),
suffering primarily from a lack of potential objectivity or excessive data requirements (Weber et
al., 2000b). Additionally, most of the methods proposed in the literature deal with the
imprecision of rating mechanism itself, which is the difficulty of determining the score of a
supplier on different criteria or the relative importance of criteria with a high degree of precision.
Any one approach is thus unlikely to be applicable in general term or equally to all possible
purchasing situations (Ellram, 1990).
The literature review reveals that the multiple dimensions and criteria must be used in the
evaluation of supplier performance during supplier selection. The most common measurements
including the cost, delivery and product quality focus on the output of supplier. When the
companies have long-term relationships with suppliers, the output criteria need to be
complemented with processual criteria and structural criteria (Ellram, 1990). The evaluation with
regard to processual criteria addresses what the supplier does rather than achieves and typically
14

includes whether employees adhere to standard operating procedures. The structural criteria
relate to the potential performance and reflect what could be done by the supplier in
consideration of the resource body available, thereby including criteria such as the equipment
capability.
With the view of enhancing supplier selection, the proposed supplier attributes, integrated with
literature studies, are grouped into 6 main categories; namely, Cost, Quality, Cycle Time,
Service, Relationship and Organization to form a backbone of a generic supplier selection
mechanism. It is important to note that these criteria are interrelated. Some of the criteria are
traditional dimensions used in previous studies, but the others are longer term and more
subjective or judgmental in nature. Each criterion contains a specific set of factors that are
important for supplier evaluation at the different phases of decision process. These factors are
self-explanatory and do not need further clarification here.
Because of the significant advantages that the buying firms realize through outsourcing
supplementary activities, the potential suppliers of outsourced activities should know what
factors the potential buyers think are important in supplier selection. It will give supplying firms
insight into how to tailor their strategies to gain customers (Kotabe, 2001). The suppliers will be
in a better position to focus their efforts appropriately if they understand either evaluation or
selection criteria. In addition, the supplier performance is driven by the amount buyers outsource
as well as their selection criteria (Pagell & Sheu, 2001). An effective purchasing strategy
improves the quality of suppliers service in terms of product, delivery, response times and
customer service as well as price (Thompson, 1996). The enhanced interaction between buyer
and supplier concerning what corrective actions to take on the basis of evaluations would reduce
the problems related to complementary, overlapping and contradictory procedures and outcomes
(Fredriksson & Gadde, 2002). Involving various departments from both sides would make it
possible to better understand the multiple consequences of different improvement proposals. In
the same vein, Araujo et al. (1999) recommend the buying firms to stimulate the development of
interactive interfaces with the suppliers. This type of customer-supplier interface enables the
firms to consider the productivity and innovation consequences for both parties as well as the
benefits that can be jointly developed with specific third parties such as the buyers customer and
suppliers supplier.
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2.3.4
Business Process Improvement
BPI is simply a method of improving the way a discrete set of business activities is organized
and managed. It is a structured approach to analyze and continually improve fundamental
activities of a companys operation by simplifying and streamlining business processes. The
business activities should be seen as more than a collection of individual or even functional tasks
by taking a process view. By taking a broader view of business processes (interrelated activities,
procedures and behaviors), the organizations ensure that business processes provide maximum
benefit to the organization. According to Harrington (1991), BPI refers to making the businesses
efficient, effective and flexible to meet customer expectations in products and services. BPI will
lead to the efficient and effective use of resources such as facilities, people, equipment, time and
capital (Zairi, 1997). It involves finding the root causes of problems so that an organization can
provide quality goods and services to the customers. Thus, BPI is a strategic customer-oriented
initiative that involves the process-restructuring programs whose chief purpose is to make the
business processes more efficient, effective and flexible (Hammond, 1993). Harrington (1991)
further elaborates that making the processes more effective means producing the desired results
from the product or service in comparison to what the customers required (Effectiveness is how
well the current process achieves its objectives) while making the processes more efficient
means minimizing the resources used such as costs, materials, cycle time and so on from the
internal process operation (Efficiency measures the amount of efforts and resources required to
achieve the objectives) and making the processes adaptable means being able to meet changing
customer and business needs (Adaptability measures how quickly and easily the process can be
changed to meet different objectives or the reprioritization of current objectives can be done).
Under the big umbrella of BPI, 3 aspects of process improvement strategies and activities that
commonly being adopted by todays organizations are Continuous Process Improvement,
Business Process Reengineering and Business Process Benchmarking (Lee & Chuah, 2001).
They have their own specific purposes and have different impacts and effects on the
organization. Continuous Process Improvement incrementally improves the operation efficiency
to achieve maximum effectiveness during a short timeframe. Business Process Reengineering is
defined as the fundamental rethinking and radical redesign of business processes to achieve
dramatic improvement in critical contemporary measures of business performances such as cost,
quality, service and speed (Hammer & Champy, 1994). Certainly, an important issue in industry
16

is the process innovation, which is often viewed as an alternative to Continuous Process
Improvement approaches. Business Process Benchmarking is taken to compare the performance
levels of each process with others, especially with the competitors or the best practices in the
same industry to determine the performance gaps and improvement goals. Within the production
domain, many process analysts striving to improve productivity and efficiency of companies
have accepted these 3 topics. However, how improvement can be achieved may be very different
for different companies. Some processes may only need an incremental improvement in the
critical areas while the others may require a sudden change or total revamp through process
reengineering or some may even need a combination of both. In order to ensure the selection of
appropriate improvement strategy or approach, much time and effort are needed to understand
the underlying concept, methodology and impact of each approach.
To decide on which (or small subset of) processes to work, some general issues should be
considered including the customer and/or employee desires, competitor scanning, strategic
imperative and processes that represent the tightest constraints in organization (Rohleder &
Silver, 1997). The business strategy and BPI are related in that the process problems require
long-term solutions to be effective and they must be aligned with the business goals and
customers served by the organizations. The reengineering of organizational change requires a
strategic orientation rather than a tactical or operational one and it must be carefully planned,
properly financed and strongly reinforced (Paper, 1998).
Put simply, a general model of BPI involves the following steps:
Develop the business vision and process objectives: BPI is driven by a business vision which
implies specific business objectives such as cost reduction, time reduction, output quality
improvement, quality of work life, learning, empowerment.
Identify the critical process to be improved: the problem areas and non-value-added activities
that need to be changed or eliminated such as excessive hand-offs, reviews, reworks and
queuing time should be identified. Most organizations use the High-impact approach, which
focuses on the most important processes or those that conflict most with the business vision.
A lesser number of organizations use the Exhaustive approach that attempts to identify all the
processes within an organization and then prioritize them in order of improvement urgency.
Understand, analyze and measure the existing process: this step is necessary to avoid the
repetition of old mistakes and provide a baseline for future improvements. It requires the
17
identification and/or development of appropriate measures on 3 dimensions of effectiveness,
efficiency and adaptability (Harrington, 1991). The good measurement schemes should
consider the customers, internal operations, financial and improvement/learning needs
(Kaplan & Norton, 1992). Having identified the problem areas and performance gaps by
comparing with the competitors and the best practices in the same industry, the organizations
themselves should set the desired state(s) for the measurement criteria adopted. The desired
states are the final targets to achieve in the improvement program.
Design and build a prototype of the new improved process: the actual design should not be
viewed as the end of BPI process. Rather, it should be viewed as a prototype with successive
iterations by addressing equally the process, people and equipment. The metaphor of
prototype aligns the BPI approach with the quick delivery of results, involvement and
satisfaction of customers. The creative thinking and problem solving have central roles to
play in process improvement.
A simple method of identifying the processes in need of improvement is compiling a list of

processes which cause most complaints to external/internal customers, cause most errors, take
most time to complete, involve most people, involve duplication of efforts or incur most costs
(Lee & Chuah, 2001). In a similar vein, Rohleder and Silver (1997) present a number of possible
types of waste including the overly complicated or unclear processes, producing defective output
(hence causing rejects, inspection, scrap, rework, customer dissatisfaction and other downstream
problems such as production stopping and rescheduling), unnecessary transportation/movement
of products and people, inspections, waiting, unnecessary record keeping and data
collection/processing and finally processing goods/information in large batches.
Seeking to improve quality of product and service provides motivation for the organizations to
improve coordination among the networks of interdependent tasks, groups and organizations. It
requires that they possess a thorough understanding of input, output and transformation
processes when assessing the business performance since the performance problems can arise in
any and all of these stages. Reflecting that the aspects of BPI are both internally and externally
oriented, this construct can be characterized by 2 broad dimensions or criteria of BPI as follow
(Harrington, 1991; Bhatt, 2000):
Improvement Initiative: it refers to eliminate any kind of possible waste (i.e. scrap, rework,
returned goods, cost of warranties, settling customer claims and other redundant activities).
18

In general, the improvement initiatives are grouped under 3 categories; namely, defect
prevention, improvement actions and cost of quality deficiencies. The defect prevention
refers to avoiding making mistakes in the first place and its purpose is to create products with
zero defects. By defining, identifying and analyzing the potential causes of a problem, the
organizations can make necessary commitment for defect prevention in business processes
(Bhatt, 2001). This emphasis, from error detection to prevention, makes it essential that the
firm pays attention to the overall effectiveness of its processes rather than increasing the
efficiency of a function. The improvement actions refer to continual upgrading of the quality
standard targets in business processes. It means that the organizations over time not only
prevent errors from occurring in the first place, but also try to reach new standards of quality
by upgrading their capabilities in process improvement. The cost of quality deficiency refers
to reducing excess cost in manufacturing a product or offering a service by reducing waste.
An organization, which makes its primary goal to streamline and improve its business
processes, begins by reducing the number of steps and handoffs in carrying out and
completing its tasks. An organization can simplify its processes by eliminating wasteful
redoing, reducing setup time and working on concurrent activities.
Customer Focus: It refers to meeting customers expectations in products and services.

Because of the dynamic expectation of customers, the organizations need to continually
survey and identify their customers expectations. This phase in business improvement is
vital as the main aim of process improvement is to meet and often exceed customers
expectations in products and services. A shared understanding among the organizational
members about the dynamics of product innovation, active anticipation of customers needs
and resolution of inter-functional problems are important criteria for introducing high quality
products to customers (Rosenthal, 1992).
Successful BPI hinges upon the top management support, customer satisfaction, cross-functional
teamwork and a systematic means of solving problems. The biggest obstacles that BPI faces are
the lack of sustained management commitment and leadership, unrealistic scope and
expectations and resistance to change (Paper, 1998). Based on BPI consultants interviews,
Bashein and Markus (1994) found that the senior management commitment and sponsorship,
realistic expectations, empowered and collaborative workers, strategic context, shared vision,
sound management practices and sufficient human and financial resources are the positive
19
preconditions and wrong sponsor, a do it to me attitude, cost cutting objectives, narrow
technical focus, unsound financial condition, too many projects underway and fear, lack of
optimism or animosity are the negative preconditions for BPI success.
It should be noted that almost all people in the organization, not just a few at the top, should
actively solve problems, reduce costs and eliminate wastes. It is a part of the perspective of socalled learning organization (Hayes et al., 1988). There is a need to overcome the complacency
and switch to an attitude of preventing rather than reacting to problems. Moreover, the
identification of problems (or opportunities for improvement) should not be perceived as an
indication of negative performance (Rohleder & Silver, 1997).
2.3.5
Research framework
The main objective of BPI is to identify and eliminate non-value-added processes and simplify
less-value-added or value-added processes of an organization. An effective way of simplifying
non-core less-value-added or value-added processes is outsourcing, which is to employ outside
entities to manage processes or functions formerly carried out inside an organization. Hence, the
outsourcing is another approach to BPI (Li & Fan, 2000). The fields for outsourcing have been
expanded extensively to almost all kinds of functions or processes such as component or raw
material supply, production, sales of products or even personnel recruitment, training and
bookkeeping. BPI and outsourcing are closely related because both of them break the traditional
ways of doing business and make changes to the business processes and functions. The
outsourcing can also support BPI in dealing with complicated process changes.
To successfully implement BPI via outsourcing and to make sure that the outsourcing satisfies
the requirements of core processes, the company should select suppliers carefully and monitor or
enhance the supply chain relationship frequently. Because BPI is a process-oriented approach of
improvement, it is important for the firm to break its rigid functional structure and work through
cross-functional orientations that may involve making long-term alliances with the suppliers and
customers. We assume that the company consists of discrete business processes, which have
clear boundaries. It is to ensure that each process can be measured independently based on BPI
criteria. Hence, the proposed framework used for the study is shown in Figure 1.
20

Figure 1
Proposed research framework
Supplier selection criteria
BPI criteria
Cost
Quality
Cycle Time
Improvement Initiative
Service
Customer Focus
Relationship
Organization
The main reason for using the above framework is based on the key premise that BPI is a factbased management technique where the supplier performance considerably impacts on efficiency
and effectiveness of the buying firm and is of vital importance. Therefore, it is plausible that
effectual evaluation and selection of suppliers and promoting their involvement in the critical
supply chain activities will result in improved firm performance via enhanced customer
satisfaction. Another point of contention is the relative benefit to be gained through the
involvement of suppliers on product development and continuous improvement teams that
significantly enhances the firm performance (Tracey & Tan, 2001).
2.4
Literature review
The supplier selection by the buyers has been the subject of extensive conceptual and empirical
work in the purchasing and supply as well as business-to-business marketing literature and is
widely considered to be one of the most important responsibilities of the purchasing function of
management. For example, Carr and Pearson (1999) observed that the firms with a strategic
approach to purchasing were more involved in supplier evaluation than the other firms. It was
also shown that this strategic approach had a positive impact on buyer-seller relationships and
finally, the supplier evaluation systems had a positive effect on the buying firms financial
performance and may benefit various departments of the buying company. Additionally, another
empirical study has shown that the buyer-supplier cooperation is perceived by the buyers to lead
to higher product quality and lower total costs (Larson, 1994). This part of the literature review
indicates that some of the researches are prescriptive emphasizing models that should be used
and some are descriptive emphasizing models that are in use. However, there is a branch of
21
research, particularly relevant to this study, which examines the use of various supplier selection
criteria or factors (e.g., Ellram, 1990). A number of variables has been selected, which
constitutes the basis of such studies. They are generally grouped in accordance with whether they
relate to the vendor, product or purchasing organization. Wagner et al. (1989) in their study
about the retail buyers found that a hierarchy of effects dominated by selling history, markup and
delivery was established. The merchandise quality and fashionability were of secondary
importance while the reputation, service and country of origin had little. In the industrial buying
research, the explicit criteria such as quality, service, delivery and price have been found to
dominate supplier selection (Bhutta & Huq, 2002). The implicit criteria such as reputation and
location have also been found to be important but their relative importance is the subject of
debate. Ghodsypour and OBrien (1998) agreed that the cost, quality and service are 3 main
categories when deciding on supplier selection parameters. It revealed that the supplier selection
process usually made on the basis of cost and quality has been recognized as a major decision
making process. Tracey and Tan (2001) show that the evaluating and selecting of suppliers
grounded in the criteria of quality, delivery reliability and product performance enhance the 4
dimensions of customer satisfaction (price, quality, variety and delivery) and firm performance.
However, Briggs (1994) (cited in Choy & Lee, 2003) stated that the joint development, culture,
forward engineering, trust, supply chain management, quality and communication are the key
requirements of a supplier partnership apart from optimum cost. Pearson and Ellram (1995)
argue that the quality, cost, current technology and design capabilities are the most important
selection criteria and the focus on these criteria supports the trend towards an increasing
emphasis on strategic flexibility for the firm. Kotabe (2001) in his study found that the suppliers
competency, service quality control, transaction cost drivers, suppliers brand image and country
characteristics are more important than the others. The findings of previous researches indicate
that the importance of supplier selection factors does vary based on the type of purchase and
product and there is no common list of criteria used across supplier selection studies (Pearson &
Ellram, 1995). To conclude, the supplier selection process should not only consider the price, but
also a wide range of factors such as quality, organization and culture with a view to decision
making by considering the whole supplier capability in a long-term and strategic way.
The BPI literature is replete with advice on how to improve business processes, but what is
lacking is a holistic approach that encompasses the most important facets for long-term success
22

(Paper, 1998) including the outsourcing. The exception is the work of Li and Fan (2000) who
propose a three-stage approach to the integration of Business Process Reengineering and
outsourcing. Goffin et al. (1997) contend that the good suppliers can help manufacturers during
the development of new products and processes with long-term quality improvements and cost
reductions and can provide enhanced delivery performance. Tracey and Tan (2001) show that the
involvement of suppliers in the supply chain by a way of participation in product design teams
and continuous improvement programs enriches the firms delivery service and overall firm
performance.
In summary, despite a general understanding of the useful roles of supplier selection on BPI, the
empirical studies examining the relationship between supplier selection and BPI are scarce in the
literature.
2.5
Unit and level of analysis
The unit of analysis for the study is the outsourced process because the firms are increasingly
taking a broader view of business processes, i.e. the interrelated activities, procedures and
behaviors that occur within and between organizational units, seeking to ensure that intra- and
inter-organizational processes ultimately satisfy the needs of customers and provide maximum
benefit to the organization (Davenport, 1993).
The level of analysis for the study is a division rather than a firm or a supply chain. There are 3
reasons for it. First, it is often found that the BPI programs are initiated at the divisional level and
only after the success of pilot programs is BPI initiated in the other divisions in the firm
(Davenport & Stoddard, 1994). Second, it is often difficult to categorize a firm as a
manufacturing firm or a service firm as often some divisions of a firm work with manufacturing
and some others work with services. However, a division can be better identified dealing with
either service or manufacturing operations. Third, the division type is often considered important
because in the manufacturing divisions, the tangible nature of processes makes it easier to
engage in process improvement activities than the service divisions. In the manufacturing
division, an organization is in a better position to control and monitor processes while in the
service division, processes cannot be controlled adequately as most of them are intangible and
take place through interactions with the clients. Moreover, in the manufacturing division, the
customers demands in products can be well defined and understood. In the service one,
23
however, it is often difficult to quantify the customers expectations as services are difficult to
standardize because each customer comes with his or her own expectations (Fitzsimmons &
Fitzsimmons, 1994).
2.6
Limitations of the study
There is a number of limitations of this study of which we should be aware. The critical business
processes of supply function of an organization include the supplier selection, negotiation of
supply contracts, monitoring supplier performance and acting as an interface between an
organization and its suppliers (Talluri & Sarkis, 2002). Within these core processes of
purchasing, this study narrows its scope to focus upon the supplier selection process, which
assists in maintaining the effective buyer-supplier linkages. We believe that the results of this
study may only reveal a partial picture of the current interactions between firms and their
suppliers.
The number of cases is another limitation of this study. The cases consist of the divisions of 2
firms. These firms are well established, one large and another medium in size. The results of the
study are therefore limited for the purpose of generalization because the case studies are
generalizable to the theoretical propositions and not to the populations or universes (Yin, 2003).
The problems with these kinds of studies are that the results are not generalizable beyond the
specific case study for which the results are obtained. The responses pertaining to a few numbers
of divisions do not provide a sufficient basis to revise our theoretical model too. The results from
a larger and heterogeneous sample might provide a better basis to revise the theoretical model.
However, seeing the nature of questions spanning business processes, the number of cases is not
considered entirely unusual. We believe that the results can still offer important guidelines for
replicating the study over a larger sample of firms.
2.7
Significance of the study
In light of the paucity of present state of empirical research in the supplier selection and BPI
fields, it is one of the first empirical studies to find the relationship between supplier selection
and BPI. The study presents the model as a new perspective to outsourcing and BPI research by
improving the discriminatory power of existing variables. It applies a new multi-criteria model
for supplier selection by considering various selection criteria. This research is intended to
24

increase the awareness of strategic benefits that arise from BPI through outsourcing and
concentration on suppliers. One of the most important contributions of this study is the
construction of a model to better understand the relationship between supplier selection criteria
and BPI criteria. The results of this research will provide a direction to the researchers in
developing a theory of buyer behavior as well.
Research method
3.1
Research design
The purpose of this research is to explore a new topic to learn about it. As Neuman (1997) says,
in this kind of research the researchers goal is to formulate more precise questions and develop
pertinent hypotheses and propositions that the future research and further inquiry can answer.
The exploratory research may be the first stage in a sequence of studies. A researcher may need
to conduct an exploratory study in order to know enough to design and execute a second more
systematic and extensive study.
According to Remenyi et al. (1998), the central premise of non-positivist research is that the
researcher should be concerned to understand phenomena in depth and that understanding should
result from attempting to find tentative answers to questions such as what, why and how. In
addition, such an understanding can result from using methods other than measurement.
The focus of research questions on what question is a justifiable rationale for conducting an
exploratory study. As the topic is the subject of exploration, the design for an exploratory study
has a legitimate reason for not having any hypothesis.
In designing the research, a case study approach was chosen because, as Yin (2003) argued, this
type of approach is a preferred empirical inquiry strategy when how or why questions in
addition to what question are being posed, when the researcher has little or no control over
events and when the focus is on a contemporary phenomenon within its real life context. It has
the capability of uncovering causal paths and mechanisms and through richness of detail,
identifying causal influences and interaction effects might not be treated as operationalized
variables in a statistical study.
In this research, the study as a whole would have used a multiple case design because the
evidence from multiple cases is often considered more compelling and the overall study is
25
therefore regarded as being more robust (Yin, 2003). Furthermore, for producing an exemplary
case study, in a multiple case study both discovery and theory development are found within the
same case study. Each individual case reveals a discovery but the replication across cases also
adds up to a significant theoretical breakthrough (Yin, 2003). As a multiple case design, we
chose 2 different cases. The reasons for this selection are the lack of rival theory, the issue at
hand does not demand an excessive degree of certainty and finally for satisfying external
validity, we are uncertain whether the external conditions will produce different case study
results.
By exploring the effect of supplier selection on BPI, an explanation is given on how and why
these dimensions should be considered in the formulation of outsourcing decision by drawing on
existing literature and empirical evidence through the structured interviews carried out with the
participants.
The current study goes beyond the previous literature not only by considering all the qualitative
and quantitative factors relevant to supplier selection and BPI, but also by analyzing the
relationships among these factors in a multiple criteria environment.
The issues addressed during the interviews include the following:
Identify the outsourced process and its characteristics
Identify the objectives or goals of outsourcing decision
Define a finite set of relevant attributes affecting the decision outcome
Elicit preference information concerning the attributes from the decision maker(s) and
determine the relative importance of attributes
Identify the role of suppliers in the process and the influences of supplier selection on BPI
However, the aim of the present study is not to study the suppliers and BPI attributes in depth
rather to explore the relationship between supplier selection and BPI.
3.2
Definition and operationalization of variables
The exploratory case study outlined below expands on the original model proposed to investigate
its applicability in a sourcing context and provides a means of evaluating the contribution of
buyer and supplier to the process. Since the criteria related to both supplier selection and BPI
need to be considered in this research, then it is important to include the factors, which take into
account the relationship between buyer and supplier. Based on our theoretical arguments and
26

literature review, we devise the lists of supplier selection criteria and BPI criteria, shown in
Tables 1 and 2 respectively, and their corresponding specific set of factors with the possibility of
revising during the study.
Table 1
Criterion
Factor
Price
Logistics costs (Transportation, Inventory, Administration, Customs, Risk and damage,

Handling and Packaging)
Cost
Quality
Cycle Time
Service
Relationship
Operating costs
After sales service costs
Quality performance (e.g., ISO 9000 accreditation)
Marketability
Durability
Ergonomic qualities
Flexibility of operation
Simplicity of operation
Reliability
Speed to market
Delivery lead time
Development speed
Fill rate
Reaction to demand
Ability to modify product
Supply variety
Technical support
After sales services (e.g., Warranties and Claims policies)
Flexibility (Payment, Freight, Price reduction, Order frequency & amount)
Delivery frequency
Visitation to supplier facilities
Amount of past business
Reciprocal arrangement
Desire for business
Compatibility across levels and functions of buyer and supplier firms
27
Organization
Business references
Suppliers customer base
Financial stability
Strategic contribution
Reliability
Expectation of continuity
Dependability
Need identification ability
Cultural similarity
Negotiability
Trust
Partnership
Ability to maintain commercial relations
Supplier availability
Industrial relations
Risks
Current technology (Product and Process)
Future technology (e.g., investment in R&D)
Management compatibility
Geographical location
Organizational structure
Environmental performance (e.g., ISO 14001 certification)
Human resource practices
Supplier management
Financial management systems
Production facilities and capacity
Position in the industry and reputation
Performance history
Physical size/growth
Technological capabilities
Innovativeness
EDI capability
28

Table 2
BPI criteria
Criterion
Factor
Defect prevention
Root causes elimination
Improvement
Standards improvement
Initiative
Improvement evaluation
Simplicity redesign
New process introduction
Quality
Product improvement
Customer
Product innovation
Focus
Reaction to demand
Requirement analysis
Complaint analysis
However, we do not include the performance measures as a part of discussion for the present
study. The main reasons are the following. First, the focus of present study is towards BPI, which
in the literature has largely been defined and operationalized in process terms. Second, the study
does not aim at operationalizing structural performance measures such as cycle time, stock
turnover and profitability per se because some of these measures vary greatly from service
divisions to manufacturing ones. In some cases, the managers in the service divisions show their
dislike for these measures as they are more interested in customer oriented measures, which cut
across the boundary of organization (Bhatt, 2000). Therefore, instead of devising separate
measures for the service and manufacturing divisions in structural terms, we use a set of
measures in process terms, which deemed to fit both of these divisions. In doing so, we based our
theoretical argument on the works of Bhatt (2000) and Bhatt and Stump (2001) who
emphatically recommend focusing on the business processes rather than the results. They argue
that by meeting or exceeding customer demands, the organizations are most likely to benefit
from the performance measures. Therefore, instead of accounting for end results, the businesses
should analyze and improve their processes.
On other hand, identifying and weighting of the supplier selection attributes are needed to assess
the relative importance among them with regard to BPI considering that different attributes have
different importance. It basically relies on the human expert to identify attributes and assign
29
important values into a hierarchy structure while this structure in the form of a case-base is being
built, the expert is expected to have the experience and knowledge to decide what the weighting
value of each attribute should be. Unfortunately, the results of studies where the buyers are asked
to list the criteria they use and/or their relative importance provide little information on the
psychological tradeoffs the buyers make among the criteria. Moreover, there is a substantial
body of research that indicates such self-reports are often less-than-reliable surrogates for the
decision process even for experienced decision makers (Wagner et al., 1989). However, the
researcher was advised to develop a smaller and more tailored grouping of attributes as the
appropriate scope of research efforts.
3.3
Sources of information
The present exploratory multiple case study is based on 3 different sources of evidence; namely,
interviews, documentation and archival records related to each process considered as the unit of
analysis. The interviews are an essential source of case study evidence, which in this research
were conducted through asking the managers of divisions about the outsourced processes or
activities. The documentary information takes many forms and variety of administrative
documents such as proposals, progress reports and other internal documents. The archival
records consist of the production or service records such as those showing the amount of
products sold or the number of clients served over a given period of time and the organizational
records such as budgets over same period. These documents and archival records were used in
conjunction with another source of information, i.e. interviews.
3.4
Methods of data collection
The data collection process for case studies is more complex than the processes used in other
research strategies (Yin, 2003). Neuman (1997) states the exploratory researchers frequently
collect and use qualitative data in the form of words or pictures.
For increasing the overall quality of case study, we used multiple sources of evidence because
they essentially provide multiple measures of the same phenomenon and thus increase the
construct validity of case study (Yin, 2003). We used a focused interview where well-informed
respondents were in depth interviewed for a short period of time e.g., 2 hours in each session
during months of April and May, 2004. The interviews remained open-ended and assumed a
30

conversational manner but the interviewer was more likely to be following a certain set of
questions derived from the case study protocol shown in the appendix. The most important use of
systematic searched documents and archival records was to corroborate and augment the
evidence from interviews. Only when all of the evidences produced a consistent picture was the
researcher satisfied that a particular event had actually occurred in a certain manner. To increase
the reliability of case study research, the case study protocol as a major tactic was designed by
the researcher which guided the investigator in carrying out the research. To reduce the
likelihood of bias for substantiating a preconceived position by the investigator, the preliminary
findings have been reported to critical colleagues while in the data collection phase who offered
some alternative suggestions for data collection.
The researcher had a methodological versatility necessarily required for using case study and
followed certain formal procedures to assure quality control during the data collection process.
Another procedure to increase the construct validity of study, from a methodological viewpoint,
was to have the draft report of case study reviewed by the participants and informants in the
cases and to present their helpful comments in order to enhance the accuracy of research and to
reduce the likelihood of falsely reporting the events.
3.5
Methods of data analysis and interpretation
Every investigation should start with a general analytic strategy yielding priorities for what to
analyze and why. Relying on theoretical proposition that the suppliers can contribute to BPI is
the preferred analytic strategy in this study. This strategy was used in practicing the Cross-case
Synthesis technique for analyzing the multiple case study. This technique is especially relevant
if a case study consists of at least 2 cases and one possibility in this technique is to create word
tables that display the data from the individual cases according to some uniform framework (Yin,
2003). The cross-case search for patterns keeps the investigator from reaching premature
conclusions by requiring that the investigator looks at the data in many different ways. The
cross-case analysis divides the data by type across all cases investigated. The researcher then
examines the data of that type thoroughly. When a pattern from one data type is corroborated by
the evidence from another, the finding is stronger. When the evidence conflicts then the deeper
probing of differences is necessary to identify the cause or source of conflict. In all cases, the
31
researcher treats the evidence fairly to produce analytic conclusions answering the original how
and why research questions.
The analysis involved 2 stages. Each case was reviewed separately and the data analyzed to give
a complete picture of the companys process and supplier selection situation. The within-case
analysis is the first step to identify unique patterns within the data for that single case. Following
this, it was possible to make the cross-case analysis or cross-comparisons to determine where the
similarities and differences between cases existed.
The data were coded into several categories. The coded segments were then separated from the
field notes and placed in a comparative matrix in order to explore how the cases differ from or
are similar to one another. In this matrix, a mixture of direct quotes and summary phrases were
used. By examining the pair of cases and categorizing the similarities and differences, the
patterns began to emerge and led to the conclusions.
Results
As an exploratory multiple case study, 2 organizations, one large public service complex and the
other a medium sized private production company, were selected from those which agreed to
collaborate with the researcher in providing the required data during the study. In each
organization, the outsourced processes, which are considered the most important by that
organization, were selected so that it enabled us to have a combination of service and production
processes. Therefore, 2 cases, one production process case and another service process case,
were studied in depth following the semi-structural format interview. The interview notes with
managers in 2 organizations were checked for clarity and accuracy and the footnotes were added
to explain any specific terms used by the respondents. The internal documents were also
collected as well as publicly available information on both organizations. Following are the
findings of the study for each organization.
4.1
Case 1: Corporaci Sanitria Parc Taul de Sabadell
Corporaci Sanitria Parc Taul de Sabadell (www.cspt.es) is a large public healthcare complex
that was created in 1987 under the guidance of health department of the Generalitat de
Catalunya, the Town Council of Sabadell and the entities that owned the clinics in Sabadell;
32

namely, the Caixa dEstalvis de Sabadell, Sabadell Mutual and la Fundaci Hospital i Casa de
Beneficncia de Sabadell, which were merged by a decision where the Autonomous University
of Barcelona played a key role.
The mission of CSPT is to provide an integral personalized quality healthcare to resolve patients
problems, equity promotion, continuity in the healthcare process, satisfaction, efficiency and
sustainability. As its vision, it wants to be a nationwide leader able to fulfill its social
commitments with the competence and excellence of its professionals and as its values, it
believes in the quality of life and welfare of people (sensitivity), responsibility, service and
excellence (professionalism) and consideration for the environment (commitment).
The corporation is comprised of 6 centers where 3 of them have their own juridical character;
namely, UDIAT Diagnostic Center S.A., Sabadell Gent Gran Services Center S.A. and Parc
Taul Primary Care Center S.A., of which the corporation itself is the sole partner. The other
centers, Hospital de Sabadell, Albada Social/Healthcare Center and Parc Taul Mental Health
Departments are consolidated as centers within the corporation with decentralized management.
These centers provide a complete set of healthcare activities required by the society. It has 512
hospital care beds, 274 social/healthcare beds, 14 daycare hospitals, 15 operating rooms, 120
outpatient clinics and 9 diagnostic cabinets. The corporation also has 4 service centers which
provide support to all areas of the corporation such as food services, publications and so on
including Integral Center for Shared Services (CISC), Center for Informatics Services (CSI),
Center for the Development of Services (CDS) and Center for Corporative Communications
(CCC).
It mostly covers the patients from local and regional towns in its area of reference, which is a
relatively large area of Catalunya in Spain including Badia del Valls, Barber del Valls,
Castellar del Valls, Cerdanyola del Valls, Palau Solit de Pelegamans, Poliny, Ripollet,
Sabadell, Sant Lloren Savall, Santa Perptua de Mogoda, Sant Quirze del Valls and
Sentmenat. Its net sales in 2003 were more than 127 m.
It currently employs more than 2400 people working in a wide variety of careers together. The
institutional training plan of corporation is carrying out several training events designed to keep
the staff up-to-date where most of the teachers are professionals of the corporation itself. The
healthcare ethics committee is an interdisciplinary institutional consulting committee set up to
analyze and advise on ethical conflicts that might arise in CSPT in order to contribute to the
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improvement of healthcare because the quality does not only involve technical expertise, rather it
also has a moral component that requires the value conflicts to be analyzed and clarified in a
rational pluralistic way.
A model of quality control has been implemented in the CSPT in previous years that strives to
maximize the ties between quality and management and the decentralization of responsibilities
for quality among the different centers, areas and units of the corporation. Along these lines,
CSPT provides some indicators for the different centers, committees or specific dimensions of
quality such as perceived quality. The most important indicators of perceived quality are
evaluated from 3 sources:
The evaluation of complaints, suggestions and thanks
The satisfaction surveys on patients in several areas including Mental Health (outpatient),
Pediatrics, Enteral Nutrition, Hepatology (in and outpatients), AIDS and information about
the timeframe for information
The evaluation through the simulated client in the areas of reception and telephony
CSPT strives to be open to the communitys opinions about its services. The staff at the customer
service department evaluates the quality of care from the users point of view, attends to
complaints, thanks and suggestions as well as conducts surveys and opinion polls. CSPT also has
ISO 9000 certificate for its laboratories.
The professional council in CSPT gives support to all areas of the corporation and is comprised
of the coordinator of quality policies and presidents of the committees of Fundaci Parc Taul.
Fundaci Parc Taul provides support for all teaching activities and research projects in the
corporation. It stimulates the development of knowledge within the framework of the
professional council. Institut Universitari Fundaci Parc Taul forms a part of the Autonomous
University of Barcelona as well.
The research office is an instrument of Comit Institucional de Recerca (CIR) in CSPT to
promote and support the research. The clients include researchers, individuals, institutions and
firms that support the research. The research office streamlines and manages the circuits and
requirements necessary for quality research and it functions as a singular message board for all
paperwork involved for promoters of research or researchers.
CSPT has acquired a significant expertise in various categories of the healthcare services over
many years. Therefore, it has not any outsourced healthcare process at the present time. It has
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outsourced several non-core non-healthcare processes for many years. For example, it has
sourced many activities out to be performed by the outside suppliers such as information
technology system, laundering, security guarding, training, cleaning, preparing some food
ingredients, installation and equipment maintenance, digitalizing clinical histories of the patients,
mail delivery and sterilizing.
Each center of CSPT is responsible for obtaining its required materials from and outsourcing its
processes or activities within the corporation. In the case that there is not any supplier inside the
corporation, each center must submit the related proposal to the board of governors for approval.
For the corporation, the motivation for outsourcing is internally generated and it forms an
important part of the organizations strategy. However, the outsourcing only applies to non-core
non-healthcare activities and the corporation has entered into outsourcing process of its own free
will rather than having it imposed on it. In terms of its approach to the outsourcing, it appears to
adopt a more formal approach but one that is driven by the strategy rather than the regulations.
Its sourcing policy, as an example, for the information technology system is based on dual
sourcing with 2 active software and hardware suppliers separately. CSPT tends to follow a
portfolio approach in dealing with suppliers and approaches to the outsourcing from a
perspective of the best available source being chosen to carry out the activity or group of
activities. In other words, it tries to place a number of related activities with the same supplier
even where the supplier may not always offer the lowest price. It allows CSPT to have fewer but
more significant relationships to which it can devote more time and resources. By accessing to
the most competent provider of an activity or a group of activities, the corporation argues that it
is raising the standards in the activities that contribute to its core business.
There is always a division driven team membership for the supplier selection decision process
including some related employees from the center that requires the outsourcing of activities.
The supplier development is another area where CSPT has some practices. The corporation is
keen for its suppliers to improve the services they provide and it work with them to achieve it
because the suppliers are extremely supportive in solving the problems.
Among the above mentioned outsourced activities, the information technology system is
considered more important than the others by the corporation due to its contribution to the core
processes and the volume of investment. Therefore, we concentrate on this activity and highlight
its specifications below.
35
CSPT employed one supplier for providing required software in 1991 and another for providing
needed hardware in 2002. The process involves the design, development, implementation and
maintenance of software and hardware respectively. The aims of outsourcing this process are to
increase the performance of staff and corporation through increasing the performance of data
processing unit and being abreast to new high technologies by using the most competent source,
increased flexibility, reduced costs, logistics improvements for patients, supplier responsibility
for obsolescence management and suppliers investment in innovation.
This process is a completely discrete area from the core processes of CSPT and is resourceintensive (e.g., labor) either in running costs or capital investment (specialized know-how,
professional skills and training needed) with a rapidly changing technology requiring expensive
investment, service innovation and its applications and subject to a quickly changing labor
market especially where it is costly to recruit, train and retain staff. This activity is perceived by
CSPT to be commonplace and not unique to the organization and considering a large number of
external suppliers available, to be possible to have different suppliers to perform different aspects
of the services.
CSPT selected those suppliers based on several selection criteria and their factors that are
summarized in Table 3 with their relative importance. According to CSPT, in selecting those
suppliers, the services offered by the suppliers, quality of software and hardware, suppliers
organization, relationship of the suppliers with CSPT, cost of services and finally cycle time in
delivering the required services are considered very important supplier selection criteria
respectively. For each criterion, some factors are pertinent and the others have been ignored from
our original list by the corporation in selecting suppliers. For instance, in cost criterion, the price
factor and after sales service costs factor are required respectively and the other factors are not
used.
In the next step, the interviewee was asked to present the direct relationships of these selection
criteria with the BPI criteria. It is noteworthy that some supplier selection factors were not
considered pertinent to the BPI criteria by CSPT and there was not any relation between some
supplier selection criteria (e.g., cost) and some factors with the BPI criteria and factors too.
Hence, we present the discussions about those supplier selection criteria and factors that had
relations with the BPI criteria and factors.
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Table 3
Relationship between supplier selection and BPI for case 1

BPI criteria
Criterion
Factor
2. Ability to modify product

3. Technical support
4. After sales services
1. Reliability
2. Flexibility of operation
2. Quality
3. Simplicity of operation
4. Ergonomic qualities
5. Quality performance
1. Production facilities and capacity
2. Current technology
3. Organizational structure
4. Physical size/growth
3. Organization
5. Position in the industry and reputation

6. Performance history
7. Technological capabilities
8. Future technology
9. Innovativeness
10. EDI capability
1. Reliability
2. Expectation of continuity
3. Dependability
4. Suppliers customer base
5. Supplier availability
6. Need identification ability
4. Relationship
Customer
Initiative
Focus
1 2 3 4 5 6 1 2 3 4 5 6
1. Reaction to demand
1. Service
Improvement
7. Compatibility
8. Financial stability
9. Business references
10. Trust
11. Ability to maintain commercial relations
12. Industrial relations
13. Risks
37
5. Cost
6. Cycle Time
4.2
1. Price
2. After sales service costs
1. Delivery lead time
2. Development speed
Case 2: Tornilleria Industrial S.A.
Tornilleria Industrial S.A. (www.tindsa.com) is a medium sized company which was founded in
1979 and whose activity is based around the fastening industry and steel fasteners sector over the
last 25 years of a long and solid experience.
Today its products are distributed to over 15 countries through a network of 4 distributors in 4
countries and itself. For the last decade, as a result of continual growth and internationalization,
the net sales of company have been doubled rising from 8m to 15m in 2003 and more than
30% of them currently occur on the international markets.
It is a company where the capacity for innovation and power of creativity are the keys to success.
Today it is specialized in meeting the needs of a very diverse range of industrial sectors on both
Spanish and international markets and supplying an extensive range of general and special nut
and bolt products with successful launches creating new market segments allowing the company
to reach a more selective market. It exists to offer solutions in response to the complexity of
demand from diverse industrial sectors through exhaustive analysis of all technical possibilities
while meeting the required specifications of each project.
There is a prestige brand Fator which projects the firms potential across the world. It relies on
the motivation, creativity, desire to improve the products and increase their presence in the point
of sale, quality of distribution and unbeatable image of brand.
In TI, they are working rigorously and efficiently to become a global reference point as a
producer of high resistance special fasteners. The quality of its products and very high degree of
collaboration established between its workforces, associates and markets allow it to offer a
reliable and efficient service that guarantees the client satisfaction.
There is one production plant or manufacturing center with 8 production lines located in Spain
that produces over 150 product types or 22000 references and over 331 million units of products
per year including hexagonal head bolts, hexagonal socket head cap screws, screws for metals,
self-tapping and chipboard screws, other metric screws, nuts, washers, anchors, stud bolts and Ubolts, pins and rivets and other related items. Its modern warehouse including a selection and
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pick-up area allows it to coordinate a stock averaging 5000 tons of products and more than 6000
pallets. Its powerful computerized inventory control system guarantees the rapid response and
dispatch of all customer orders. It currently employs about 53 people working in a wide variety
of careers together in a common project.
The quality is one of its major concerns and the production process has a key role to play. It
controls the quality of products from the beginning to the end while working alongside its
suppliers and manufacturing in its own plant from the raw materials to distribution. It is
obtaining the ISO 9001 certificate for its quality management system and comprehensive
program for investing in people through training and promoting their abilities.
Its research and development activities are considered key elements in setting the company apart
from the competitors.
Over many years the company has acquired a significant expertise in various categories of the
products both through internal development and continual contact with the most creative centers
in the world. It means that its products always give the consumer some added value in this area.
On a global level, it provides a broad variety of services, which includes the quality
improvement projects, updating designs, cost reduction projects, providing information on
successful designs, in-house training and more. Its expertise is maintained through a complex
network of information, which includes the publications, opinion leaders, market studies,
analyses of trends and information regarding legislation and standards.
The logistics department of the company is responsible for providing all the required materials
(raw, packaging and other) and outsourcing the processes or activities of the company as
required. Most of its materials suppliers are the Spanish suppliers (more than 60%) and the rest
of them are the European (Italy and France) and Asian (China and Taiwan) ones.
It has outsourced several non-core processes for many years. For example, in manufacturing
processes category, it has outsourced the coating process, packing process and assembly process
of several components of finished products. In service processes category, it has sourced many
activities out to be performed by the outside suppliers such as providing the information
technology system and distributing of the products.
For the company, the motivation for outsourcing is internally originated and it forms an
important part of the companys strategy. However, the outsourcing only applies to non-core
activities and the company has entered into outsourcing process of its own free will rather than
39
having it imposed on it. In terms of its approach to the outsourcing, the company appears to
adopt a more informal and pragmatic approach but one that is driven by the strategy rather than
the regulations. It is also an approach, which makes a distinction between the strategic and
operational activities.
Its sourcing policy is based on multiple sourcing with more than one active supplier concerning
the class and needed specialization for outsourced items. The company follows a portfolio
approach in dealing with suppliers and approaches to the outsourcing from a perspective of the
best available source (internal or external) being chosen to carry out the process or group of
processes. In other words, it places a number of related activities with the same supplier even
where the supplier may not always offer the lowest price or have good performance on some
criteria. It allows TI to have fewer but more significant relationships with suppliers to which it
can devote more time and resources. By employing the most competent provider of an activity or
a group of activities, the company argues that it is raising the performance standards in the
activities that effectively contribute to its core business.
The company also has some practices in the supplier development area. It has keenness for its
suppliers to promote the services they provide and it collaborates with them to achieve it.
For the supplier selection decision process, there is always a division driven team membership
including some related employees from the logistics department. Based on a supplier evaluation
program, this team classifies the suppliers for supplying related materials or services.
Among the above mentioned outsourced activities, the coating process in manufacturing
processes category is considered more important than the others by the company due to its
contribution to the core processes of company. Therefore, we concentrate on this activity and
highlight its specifications below.
The company gradually has employed 4 domestic specialized suppliers for finishing and coating
the products with general and specific corrosion resistance requirements since its establishment.
The process involves the application of electrolytic or hot dipped coating on the surface of
finished product with specific metals in order to strengthen its corrosion resistance.
The goal of this process is to obtain a minimum specific durability of product normally stated in
hours so that the fasteners can be exposed to the environmental effects before suffering any
corrosion. The aims of outsourcing this process are to obtain a necessary total solution for
finishing the production process and focus on cost reduction that leads to a lower unit cost by
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using the most competent source, reduced risk exposure, extended product range and suppliers
investment in innovation. The production volume of company is not large enough to justify the
investment required to set up a coating plant. Also, different types of coatings do need different
technologies so that it is not possible for one supplier to do all the variety of available coating
processes on the market.
This process is relatively apart from the core processes of TI and is extremely resource-intensive
(e.g., technology) that requires expensive investment (specialized know-how, professional skills
and training needed), process innovation and its applications. TI perceives this activity to be
commonplace and not unique to the company and concerning a large number of specialized
external suppliers available, to be feasible to have different suppliers to perform different types
of services.
Table 4 summarizes several selection criteria and their factors with their relative importance,
which TI selected those suppliers based on. In selecting the suppliers, the quality of coating
offered by the suppliers, cost of coating, services provided by the suppliers, cycle time in
delivering the required services, relationship of suppliers with TI and finally suppliers
organization are respectively considered very important supplier selection criteria by TI. For
each criterion, some factors are relevant and the others have been eliminated from our original
list by the company in choosing the suppliers. For instance, in cost criterion, the price factor and
logistics costs factor are required respectively and the other factors are not applied.
In the next step, like case 1, we asked the interviewee to present the direct relationships of these
selection criteria with the BPI criteria whereupon some supplier selection factors were not
considered pertinent to the BPI criteria by TI and some supplier selection criteria (i.e., cost) did
not have any relation with the BPI criteria and factors. Therefore, we discuss about those
supplier selection criteria and factors that had relations with the BPI criteria and factors.
Discussion of findings
Relying on theoretical proposition that the suppliers can contribute to BPI, as the preferred
analytic strategy in this study, yields priority to analyze the relationships between supplier
selection criteria (and their factors) and BPI criteria (and their factors).
41
Table 4
Relationship between supplier selection and BPI for case 2

BPI criteria
Criterion
1. Quality
2. Cost
Factor
Improvement
Customer
Initiative
Focus
1 2 3 4 5 6 1 2 3 4 5 6
1. Reliability
2. Quality performance
3. Durability
4. Cycle Time
1. Price
2. Logistics costs
1. Flexibility
3. Service
2. Technical support
3. Ability to modify product
4. Reaction to demand
1. Delivery lead time
1. Amount of past business

2. Desire for business
3. Suppliers customer base

5. Relationship
4. Reliability
5. Trust
6. Ability to maintain commercial relations
7. Supplier availability
8. Negotiability
1. Position in the industry and reputation
2. Performance history
6. Organization
3. Technological capabilities
4. Production facilities and capacity
5. Geographical location
6. Environmental performance
7. EDI capability
The analysis involved 2 stages, the within-case analysis for each case separately to identify
unique patterns within the data for that single case and the cross-case analysis for both cases
jointly to search for common patterns and determine where the similarities and differences
between cases existed. In both cases, we treated the evidence fairly to produce analytic
conclusions answering the original what, how and why research questions. Then, we were
42

in a position to identify related important supplier selection and BPI criteria (and their factors),
revise our full lists of supplier selection and BPI criteria (and their factors) generated from the
literature and finally revise our proposed research framework.
5.1
Within-case analysis
5.1.1
Case 1: Corporaci Sanitria Parc Taul de Sabadell
The information technology system in CSPT plays a significant and important role in offering
better services to the patients by CSPT so that the suppliers contribute to the process
considerably.
Regarding the Service criterion, the suppliers reaction to the demands of CSPT for providing
information system may improve CSPTs reaction to the demands of patients for offering
healthcare services through strengthening the data processing ability of CSPT. The suppliers
ability to modify the software and hardware in an appropriate way to satisfy the needs of CSPT
may increase the ability of CSPT to simplify its existing processes and introduce new processes,
improve its services and sometimes innovate new services for its clients through improved
decision making ability by accessing to better information system and information. The
suppliers technical support also contributes to the elimination of root causes of the problems,
improvement of performance and quality standards and evaluation of improvement in the
processes of CSPT by enhancing the ability of CSPT to find solutions to the problems, compare
alternatives and assess shortcomings of the decisions. The better after sales services provided to
CSPT by the suppliers may lead to the higher quality of services offered to the patients by CSPT
because the service quality of suppliers, before and after sales, has direct impact on the quality of
final product or service presented by the buyers.
In short, the Service criterion and some of its factors (Reaction to demand, Ability to modify
product, Technical support and After sales services) have relations to and impacts on BPI criteria
(Improvement Initiative and Customer Focus) and some of their factors (Root causes
elimination, Standards improvement, Improvement evaluation, Simplicity redesign, New process
introduction, Quality, Product improvement, Product innovation and Reaction to demand).
Considering the Quality criterion, the reliability of services provided by the suppliers are very
important and may influence the capacity of CSPT for defect prevention, root causes elimination
of problems, performance and quality standard improvement and finally quality of services
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offered by CSPT through having accurate information required for correct and on time decision
making and operating. The operation flexibility of software and hardware delivered by the
suppliers also help CSPT to prevent defects, improve quality and services and react to the
demands of patients by presenting the needed information and fair information processing to
CSPT as required. The operation simplicity of information system may encourage the staff of
CSPT to use the system for defect prevention, root causes elimination of the problems, standards
enhancement, improvement evaluation, services quality and service improvement in CSPT. The
ergonomic qualities of information system used by CSPT may improve the behavior of its staff
by increasing the fitness of system for use and hence improve the quality and amount of services
and the services provided by CSPT to the patients. The quality performance of suppliers directly
influences the service quality of CSPT. It is not surprising given the growing awareness of the
importance of quality in supplier selection.
In short, the Quality criterion and some of its factors (Reliability, Flexibility of operation,
Simplicity of operation, Ergonomic qualities and Quality performance) have relations to and
impacts on BPI criteria (Improvement Initiative and Customer Focus) and some of their factors
(Defect prevention, Root causes elimination, Standards improvement, Improvement evaluation,
Quality, Product improvement and Reaction to demand).
Concerning the Organization criterion, the production facilities and capacity of suppliers and
their technological capabilities are perceived by CSPT that play a significant role in its service
improvement, service innovation and reaction to the patients demands through accessing to the
better outputs of suppliers in offering requested information system. Also, the suppliers current
technology in providing the required information system for CSPT may impact the reaction of
CSPT to the patients demands because it determines the level of applicability of the delivered
system. The high level of innovativeness of the suppliers may help the level enhancement of
innovativeness of CSPT to innovate and introduce new processes and new services due to the
direct correspondence between level of innovativeness of the suppliers and level of
innovativeness of the buyers.
In short, the Organization criterion and some of its factors (Production facilities and capacity,
Current technology, Technological capabilities and Innovativeness) have relations to and impacts
on BPI criteria (Improvement Initiative and Customer Focus) and some of their factors (New
process introduction, Product improvement, Product innovation and Reaction to demand).
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Considering the Relationship criterion, the suppliers reliability in relationship with CSPT may
contribute to the service quality of CSPT through supplying a suitable and reliable information
system. The suppliers customer base is one of the main benchmarking sources for CSPT to
evaluate its improvement and analyze its requirements and customers needs by surveying what
the suppliers offer to other organizations and selecting what is suitable for CSPT and its
customers. The suppliers ability to identify the needs of CSPT considering information system
may help CSPT to react better to the patients demands and analyze their requirements because if
the suppliers identify better the demands and requirements of CSPT, in fact, they will identify
better the demands and requirements of patients. The compatibility across levels and functions of
CSPT and supplier firms may facilitate the required collaboration between them to evaluate the
improvement, analyze the patients requirements and complaints, hence, accomplish the
necessary corrective actions.
In short, the Relationship criterion and some of its factors (Reliability, Suppliers customer base,
Need identification ability and Compatibility) have relations to and impacts on BPI criteria
(Improvement Initiative and Customer Focus) and some of their factors (Improvement
evaluation, Quality, Reaction to demand, Requirement analysis and Complaint analysis).
Regarding the Cycle Time criterion, the delivery lead time of suppliers in providing the services
demanded by CSPT may impact significantly on CSPT to react to the patients demands and also
introduce new processes to improve its functions in an appropriate timeframe. Finally, the
suppliers development speed in giving the software programs and hardware solutions may cause
CSPT to quicken its new processes introduction, speed up its reaction to the patients demands
and improve its patients requirements and complaints analysis by furthering its ability to
perform more rapidly. In fact, the shorter the response time to solving problems and providing
integral and modern technology by the suppliers, the better the offer of required services to the
patients by CSPT.
In short, the Cycle Time criterion and some of its factors (Delivery lead time and Development
speed) have relations to and impacts on BPI criteria (Improvement Initiative and Customer
Focus) and some of their factors (New process introduction, Reaction to demand, Requirement
analysis and Complaint analysis).
In summary, all of the supplier selection criteria, except the Cost criterion, including Service,
Quality, Organization, Relationship and Cycle Time and some of their factors have relations to
45
and impacts on BPI criteria including Improvement Initiative and Customer Focus and some of
their factors.
5.1.2
Case 2: Tornilleria Industrial S.A.
The coating process is the last stage in production steps, which is necessary to finish the
production of fasteners so that the suppliers contribute to the process significantly.
Regarding the Quality criterion, the reliability, i.e. variability in quality level, of services
provided to the company by the suppliers is very important and may influence the capacity of
company for defect prevention, root causes elimination of the problems, quality improvement
and customers compliant analysis through showing the poor quality of other production steps
before coating step. The quality performance of suppliers directly influences the ability of
company to prevent defects, eliminate root causes of the problems and improve quality of the
fasteners because the suppliers for coating the fasteners with an acceptable quality level need that
the previous steps in production of fasteners by the company deliver them an acceptable level of
quality. The durability of coated fasteners against any corrosion made by the suppliers may cause
the company to better prevent defects and eliminate root causes of the problems in its production
lines and improve quality of the fasteners and analyze the customers complaints by looking for
the reasons of poor quality of its products.
In short, the Quality criterion and some of its factors (Reliability, Quality performance and
Durability) have relations to and impacts on BPI criteria (Improvement Initiative and Customer
Focus) and some of their factors (Defect prevention, Root causes elimination, Quality and
Complaint analysis).
Considering the Service criterion, the flexibility of suppliers in respect to freight, order
frequency and amount may enhance the companys reaction to the demand of customers through
better meeting their expectations and conditions. The suppliers technical support is a very
important and useful help that contributes to the companys ability for defect prevention, root
causes elimination of the problems, improvement evaluation, simplicity redesign, new process
introduction as well as quality increment of the fasteners, reaction to the demands of customers,
customers requirements and complaints analysis through exploiting complementary knowledge
offered by the suppliers to find solutions to the problems, compare alternatives and assess
shortcoming of the decisions. The ability of suppliers to modify coating services based on
46

needed specifications of the company may help the company to prevent defects, eliminate root
causes of the problems in the companys production process as well as increase quality level of
the final products, improve products of the company and ultimately enhance its reaction to the
demands of customers by meeting their specific requirements and conditions. It is clear that the
suppliers reaction to the demands of company may increase the companys reaction to the
demands of its customers via the enhanced mutual awareness of both parties to meet the
customers needs.
In short, the Service criterion and some of its factors (Flexibility, Technical support, Ability to
modify product and Reaction to demand) have relations to and impacts on BPI criteria
(Improvement Initiative and Customer Focus) and some of their factors (Defect prevention, Root
causes elimination, Improvement evaluation, Simplicity redesign, New process introduction,
Quality, Product improvement, Reaction to demand, Requirement analysis and Complaint
analysis).
Concerning the Cycle Time criterion, the delivery lead time of suppliers in providing the coating
services demanded by the company may impact significantly on the companys ability to react to
the customers demands in an appropriate timeframe.
In short, the Cycle Time criterion and one of its factors (Delivery lead time) have relations to and
impacts on one of the BPI criteria (Customer Focus) and one of its factors (Reaction to demand).
Considering the Relationship criterion, the suppliers customer base is one of the main
benchmarking sources for the company to evaluate the obtained improvement in its production
process and analyze its requirements and its customers needs by surveying what the suppliers
offer to other organizations and selecting what is suitable for the company and its customers. The
suppliers reliability in relationship with the company, their ability to maintain commercial
relations with it as well as their availability as needed may contribute to the companys reaction
to the demands of customers through establishing a stable communication channel required for
meeting the customers expectations.
In short, the Relationship criterion and some of its factors (Suppliers customer base, Reliability,
Ability to maintain commercial relations and Supplier availability) have relations to and impacts
on BPI criteria (Improvement Initiative and Customer Focus) and some of their factors
(Improvement evaluation, Reaction to demand and Requirement analysis).
47
Regarding the Organization criterion, the technological capabilities of suppliers are perceived by
the company that play a crucial role in improving its products quality, its reaction to the
demands, requirements and complaints analysis of its customers through accessing to the better
outputs of suppliers and doing necessary and corrective actions to satisfy the customers. In this
tandem, the suppliers production facilities and capacity are also considered significant elements
that help the company to improve the quality level of its products and react to the customers
demands in an appropriate way. The geographical location and proximity of suppliers also
support the company to react to the customers demands appropriately due to the decreased
communication and transportation deferment. Finally, the EDI capability of suppliers is viewed
as a major enabler to change the way the company conducts its business. This capability
enhances the ability of company to prevent defects, eliminate root causes of the problems,
simplify its processes, innovate new products in some cases and react to the customers demands
appropriately through the improved accuracy, timeliness and speed of standard document
exchange over value-added computer networks.
In short, the Organization criterion and some of its factors (Technological capabilities,
Production facilities and capacity, Geographical location and EDI capability) have relations to
and impacts on BPI criteria (Improvement Initiative and Customer Focus) and some of their
factors (Defect prevention, Root causes elimination, Simplicity redesign, Quality, Product
innovation, Reaction to demand, Requirement analysis and Complaint analysis).
In summary, some of the supplier selection criteria including Quality, Service, Cycle Time,
Relationship and Organization and some of their factors have relations to and impacts on BPI
criteria and some of their factors.
5.2
Cross-case analysis
If we look at CSPT and TI in terms of outsourced processes, supplier selection criteria (and their
factors) and their relationships with BPI criteria (and their factors), we can see where the main
similarities and differences lie.
As we looked for the main characteristics of outsourced processes, we searched for consistency,
depth and consensus in the responses about the nature of these supplementary activities. Our
analysis indicates that the outsourced processes are discrete area from the core processes of 2
organizations and are resource-intensive either in running costs or capital investment (specialized
48

know-how, professional skills and training needed) that require expensive investment, innovation
and its applications. These activities are perceived by the organizations to be commonplace and
not unique to the organizations and considering a large number of specialized external suppliers
available, to be possible to have different suppliers to perform different aspects and types of
services.
In addition to above characteristics, different organizations selected external sources for different
reasons. The information technology system in CSPT is needed in offering better services to the
customers while the coating process in TI is necessary to finish the production of products.
Hence, each process is totally different from the other one. The outsourced process in CSPT is
subject to quickly changing technology requiring service innovation and its applications and up
to date professional skills while the outsourced process in TI is not subject to rapidly changing
technology but requires process innovation and its application. However, the suppliers contribute
to both activities significantly and enhance the delivering of added value to the customers.
In evaluating a source, the organizations ideally consider a variety of criteria and the supplier
selection process then involves an explicit or implicit ranking of these various criteria. According
to CSPT, in selecting suppliers, the additional services offered by the suppliers, quality of
software and hardware, suppliers organization profile, relationship of the suppliers with CSPT,
cost of services and finally cycle time in delivering the required services are considered very
important criteria respectively. According to TI, in selecting suppliers, the quality of coating
offered by the suppliers, cost of coating, additional services provided by the suppliers, cycle time
in delivering the required services, relationship of the suppliers with TI and finally suppliers
organization profile are considered very important criteria respectively.
In summary, the results indicate that Cost, Quality, Cycle Time, Service, Relationship and
Organization are very important selection criteria and confirm previous researches, which
support the importance of these criteria in the evaluation and selection of suppliers. A greater
discrepancy existed for the supplier selection factors, however. The factors for supplier selection
criteria used by each organization studied are less comprehensive than the full list generated
from the literature. However, the supplier selection is highly firm- and situation-specific and the
organizations probably use a set of factors they know and feel are relevant to the situation.
The results also demonstrated the relationships between supplier selection practices and BPI
practices. Table 5 outlines the relationships between supplier selection and BPI criteria (and their
49
factors) for both outsourcing cases together. The black cells show the similarities between cases
while the other highlighted cells show the differences existed among them that are pertinent to
each individual case.
Table 5
Relationships between supplier selection and BPI for both cases

BPI criteria
Criterion
Quality
Factor
Improvement
Customer
Initiative
Focus
1 2 3 4 5 6 1 2 3 4 5 6
Quality performance
Durability
Ergonomic qualities
Reliability
Cycle Time
Delivery lead time

Development speed
Reaction to demand
Service
Technical support
After sales services
Flexibility
Compatibility
Relationship
Reliability
Current technology
Organization
Innovativeness
EDI capability
50

The findings have emphasized the influence that the supplier selection criteria can have on BPI
criteria. For example, it has been shown how the service quality of suppliers can have a
significant impact on business process Improvement Initiative and Customer Focus.
Furthermore, Quality, Service and Organization have been clearly identified as the most
important criteria for the evaluation and selection of suppliers from both purchasing and BPI
perspectives while the Cost criterion has not been considered to have any relation to BPI criteria.
The study also supports the relative importance of other criteria such as Relationship and Cycle
Time and exhibits their relations to BPI criteria. This research demonstrates that a greater
attention should be given to Quality, Service, Organization, Relationship and Cycle Time of
suppliers than on reducing the Cost.
The first, the Quality is feasible because it has been demonstrated that employing the selection
criterion of Quality fosters the improved incoming component quality, which in turn results in
enhanced performance of the buyers in terms of the prevented defects, eliminated root causes of
the problems, improved standards, evaluated improvements as well as quality of outgoing
products or services, products or services improvement, reaction to the demands of ultimate
customers and their complaints analysis.
The second, the Service is also feasible because utilizing this criterion has been shown to lead to
enhanced performance of the buyer firms in terms of process Improvement Initiative (and its
factors) and Customer Focus (and its factors).
The third, the Organization is also supported. Selecting suppliers based on this criterion
promotes the level of buyer performance in terms of defect prevention, root causes elimination of
the problems, simplicity redesign, new process introduction as well as quality of outgoing
products or services, products or services improvement and innovation, reaction to the demands
of ultimate customers and customers requirements and complaints analysis.
The fourth path, the Relationship is viable because using this criterion strengthens the buyers
ability in terms of improvement evaluation, quality of outgoing products or services, reaction to
the demands of ultimate customers and their requirements and complaints analysis.
The last path, the Cycle Time is also supported because selecting suppliers based on this criterion
strengthens the buyers ability in terms of new process introduction as well as reaction to the
demands of ultimate customers and their requirements and complaints analysis.
51
The focus on all of the criteria and factors presented in Table 5 supports the trend towards an
increasing emphasis on BPI for the firms. Thus, the suppliers should be chosen and retained
based heavily on their capabilities to support BPI for the buyer organization.
Based on our discussion above, Table 5 also demonstrates the identification of important
variables (criteria and their factors) for both supplier selection process and BPI activity
measurement, which enables us to reach to one of the objectives of this exploratory study. These
variables can be used for the purpose of further research and inquiry, i.e. explanatory study.
Moreover, due to the lack of relationship between Cost criterion and BPI criteria, we can revise
our proposed theoretical framework by eliminating the Cost criterion from the supplier selection
criteria. The result is exhibited in Figure 2.
Figure 2
Revised research framework
BPI criteria
Quality
Cycle Time
Improvement Initiative
Service
Customer Focus
Relationship
Organization
In summary, the revised research framework and revised list of supplier selection criteria and
factors are a basis for posing question and hypotheses for an explanatory research that are
presented in the following.
Conclusions and directions for future research
The present study has clarified the missing link between supplier selection and BPI by
highlighting the important role of supplier evaluation and selection in improving the firms
processes.
52

The case studies showed how and why BPI through outsourcing was only achieved when the
organizations were able to select suppliers based on related criteria to BPI and not just based on
traditional criteria such as cost.
The results vary by case or firms process suggesting that any theory that links the buyer
behaviors to BPI will need to consider a firms process. It is also shown that the use of the most
important criteria and related factors varies by division and process.
The factors for supplier selection criteria used by each of the organizations studied are less
comprehensive than the full list generated from the literature. A greater discrepancy existed for
the supplier selection factors, however. In summary, the results indicate that Cost, Quality, Cycle
Time, Service, Relationship and Organization are very important selection criteria and confirm
previous researches, which support the importance of these criteria in evaluation and selection of
suppliers. However, the supplier selection is highly contextual and the organizations probably
use a set of criteria and factors they know and feel are relevant to the situation. Whether they are
using the most effective criteria and factors for their situation remains to be seen.
Furthermore, Quality, Service and Organization have been clearly identified as the most
important criteria for the evaluation and selection of suppliers from both purchasing and BPI
perspectives while the Cost criterion has not been considered to have any relation to BPI criteria.
The study also supports the relative importance of other criteria such as Relationship and Cycle
Time and exhibits their relations to BPI criteria and their factors. This research demonstrates that
a greater attention should be given to the Quality, Service, Organization, Relationship and Cycle
Time of suppliers than on reducing the Cost.
The focus on all of these criteria and factors supports the trend towards an increasing emphasis
on BPI for the firms. Thus, the suppliers should be chosen and retained based heavily on their
capabilities to support BPI for the buyer organization.
Ultimately, BPI will only advance in companies that are prepared to invest in improvement with
the right vision to set appropriate supply strategies and the ability to implement them both
internally and with the suppliers by evaluating and selecting those suppliers appropriately. The
technique requires that the buyers must decide on a pre-emptive priority order of their goals, in
other words, they must first specify the goals for selected criteria and set priorities for the
attainment of those goals.
53
Despite the limitations of this study, it is useful in providing important insights on the
relationships between supplier selection and BPI. The study made important contributions in
operationalizing supplier selection and BPI constructs and providing a theoretical model.
However, our understanding of the underlying processes is still not fully developed. Instead of
relying on anecdotal experiences and case studies in an exploratory research, based on our
revised research framework and existing relationships between supplier selection criteria and
BPI criteria, this study can be extended to an explanatory research to find more precisely the
answer of the following question:
What is the effect of supplier selection criteria including Quality, Cycle Time, Service,
Relationship and Organization on BPI criteria including Improvement Initiative and Customer
Focus?
For answering the above question, we can set out the research hypotheses as follow:
H1: Higher level of Quality provided by the supplier will have a positive effect on the levels of
the firms process Improvement Initiative and Customer Focus.
H2: Higher level of Cycle Time exhibited by the supplier will have a negative effect on the
levels of the firms process Improvement Initiative and Customer Focus.
H3: Higher level of Service provided by the supplier will have a positive effect on the levels of
the firms process Improvement Initiative and Customer Focus.
H4: Higher level of Relationship between the supplier and firm will have a positive effect on the
levels of the firms process Improvement Initiative and Customer Focus.
H5: Higher level of the suppliers Organization will have a positive effect on the levels of the
firms process Improvement Initiative and Customer Focus.
The examination of variations and differences in the levels of supplier selection criteria and
factors and their effects on BPI criteria and factors can be a major contribution of the future
research studies.
Acknowledgments
The author would like to express his gratitude to Dr. Jose Luis Martinez Parra for his kind
support and helpful guidance towards accomplishing the study. The support and assistance
provided by Mr. Jaume Sato i Geli, head of management control department of Corporaci
54

Sanitria Parc Taul de Sabadell and Mr. Alex Garcia, logistics manager of Tornilleria Industrial
S.A. during the research is gratefully acknowledged.
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59
Appendix
Research protocol questions

Date:
Name of company:
Interviewees name:
Interviewees job title:
Type of industry:
Size:
No. of employees:
Turnover or net sales:
Missions, visions and values:
Brief description of organizational structure:
Product range and complexity:
Description of business as local, regional, national or international in terms of:
Customer
Supplier base
Business improvements:
Quality management
Investing in people
Research and development
Other
Core or non-core process (es) outsourced:

Motivation and approach to outsourcing:
Sourcing policy:
60
Single sourcing
Dual sourcing
Multiple sourcing
Supplier development
Supplier selection decision process team membership:
Division driven team

Multiple division balanced team
Ad hoc team
Name of division for the most important outsourced process:

Type of division for the most important outsourced process:
The most important outsourced process description:
The most important outsourced process goals:
The most important outsourced process characteristics:
Purpose of outsourcing the process:
Initiation year of outsourcing:
Supplier capabilities required and their relative importance in terms of:
Factors for supplier selection criteria
Business process improvement achieved in terms of:
BPI criteria
Factors for BPI criteria
Explanation of relationships between supplier selection criteria (and their factors) and BPI
criteria (and their factors):
61
BPI criteria
Criterion
Factor
Cost
Logistics costs (Transportation, Inventory, Administration,

Customs, Risk and damage, Handling and Packaging)
Operating costs
After sales service costs
Quality performance (e.g., ISO 9000 accreditation)
Quality
Marketability
Durability
Ergonomic qualities
Cycle Time
Reliability
Speed to market
Delivery lead time
Development speed
Fill rate
Reaction to demand
Supply variety
Service
Customer
Initiative
Focus
1 2 3 4 5 6 1 2 3 4 5 6
Price
Technical support
After sales services (e.g., Warranties and Claims policies)
Flexibility (Payment, Freight, Price reduction, Order
frequency & amount)
Delivery frequency
Visitation to supplier facilities
Amount of past business
Reciprocal arrangement
Relationship
Improvement
Desire for business

Compatibility across levels and functions of buyer and
supplier firms
Business references
Financial stability
62

Strategic contribution
Reliability
Expectation of continuity
Dependability
Cultural similarity
Negotiability
Trust
Partnership
Industrial relations
Risks
Current technology (Product and Process)
Future technology (e.g., investment in R&D)
Management compatibility
Organizational structure
Organization
Environmental performance (e.g., ISO 14001 certification)

Human resource practices
Supplier management
Financial management systems
Position in the industry and reputation
Performance history
Physical size/growth
Innovativeness
EDI capability
63

Supplier Selection and Business Process Improvement

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Supplier Selection and Business Process Improvement:

An Exploratory Multiple Case Study

Reference to this paper should be made as follows:

A variety of changes in the business environment including globalization, accelerated global

Problem statement and general purpose of the research

Reza Mohammady Garfamy

General purpose of the study and main research questions

As an exploratory study, to identify important variables, formulate more precise questions,

In this study, the research questions we seek to address are as follow:

Transaction Cost Approach

Reza Mohammady Garfamy

Reza Mohammady Garfamy

Reza Mohammady Garfamy

Reza Mohammady Garfamy

The development of advanced communication in information systems through Electronic

Reza Mohammady Garfamy

Reza Mohammady Garfamy

Business Process Improvement

Reza Mohammady Garfamy

A simple method of identifying the processes in need of improvement is compiling a list of

Reza Mohammady Garfamy

Customer Focus: It refers to meeting customers expectations in products and services.

Reza Mohammady Garfamy

Proposed research framework

Supplier selection criteria

Reza Mohammady Garfamy

Unit and level of analysis

Limitations of the study

Significance of the study

Reza Mohammady Garfamy

Identify the outsourced process and its characteristics

Identify the objectives or goals of outsourcing decision

Define a finite set of relevant attributes affecting the decision outcome

Definition and operationalization of variables

Reza Mohammady Garfamy

Supplier selection criteria

Logistics costs (Transportation, Inventory, Administration, Customs, Risk and damage,

After sales service costs

Quality performance (e.g., ISO 9000 accreditation)

Delivery lead time

Ability to modify product

After sales services (e.g., Warranties and Claims policies)

Flexibility (Payment, Freight, Price reduction, Order frequency & amount)

Visitation to supplier facilities

Amount of past business

Desire for business

Compatibility across levels and functions of buyer and supplier firms

Suppliers customer base

Need identification ability

Ability to maintain commercial relations

Current technology (Product and Process)

Future technology (e.g., investment in R&D)

Environmental performance (e.g., ISO 14001 certification)

Human resource practices

Financial management systems

Production facilities and capacity

Position in the industry and reputation

Reza Mohammady Garfamy

Root causes elimination

New process introduction

Methods of data collection

Reza Mohammady Garfamy

Methods of data analysis and interpretation

Case 1: Corporaci Sanitria Parc Taul de Sabadell