An exploration into supplier selection and retention: Practices of Dunedin small businesses

Abstract

Supply chain management (SCM) is a strategy that is used to develop a competitive advantage by encouraging all businesses within a supply chain to work together. This research is concerned with the purchasing partnerships that form the supply side of the supply chain. Successful purchasing partnerships require collaboration between buyer and supplier. Businesses must have suppliers that allow such collaborative partnerships to be successful at present and in the future. This highlights the importance of selecting the right suppliers and retaining them. Doing so will provide a business with a competitive advantage. Dunedin small businesses have developed thriving relationships with the majority of their suppliers. Suppliers are selected on quality and reliability/dependability. The informal nature of the relationships allows open communication, leading to commitment from both buyer and supplier. Such commitment aids in supplier retention alongside payment of accounts and brand loyalty. The benefits obtained from retention of suppliers include special deals offered from suppliers, and help in times of difficulty. These benefits will lead to the development of a competitive advantage for the purchasing business, and have arisen due to supplier selection and retention.