Antecedents and Consequences of Supplier Performance Evaluation Efficacy

Abstract

Supplier performance evaluation (SPE) is the process of evaluating, measuring, and monitoring supplier performance and suppliers business processes and practices for the purposes of reducing costs, mitigating risk, and driving continuous improvement (Gordon, 2008, p. 4). Numerous weaknesses associated with industrial buyers collection and use of SPE information (a.k.a., past performance information) have been documented in the for-profit and not-for-profit sectors. These weaknesses call into question the efficacy of SPEs. Neither the factors affecting SPE efficacy (i.e., its antecedents) nor the effects of SPE efficacy (i.e., consequences) on suppliers have been empirically explored. Despite the fallibility of SPE schemes, there are no known studies that explore the accuracy of SPEs, nor are there studies examining whether and how inaccurate SPEs affect suppliers specifically, their performance. The purpose of this research, therefore, is to identify the factors affecting SPE efficacy, then to examine how SPE efficacy, in turn, affects supplier outcomes. This research employs a mixed method of qualitative interviews and quantitative analysis of survey data collected from suppliers and from assessors of supplier performance. Based on the findings, the research makes several contributions to theory and practice, and provides directions for future research.