Supplier Selection Criteria in A Power Utility in Malaysia: Engineers’ Perceptions

Abstract

Supplier selection of electricity generating, transmitting and distributing systems is part of the problem-solving environment in a power utility because it is a long-term investment for the organisation. Therefore, the decision over supplier selection directly influences the operational and financial position of a power utility. In addition, the supplier selection of a power-related system is a complex multi-criteria decision problem. While some criteria may be common across different industries, there are some criteria unique to the power industry. This research aims to understand what constitutes the suitable supplier selection criteria for a power utility. This study reveals some interesting findings of how engineers perceive the importance of each criterion and suggests strongly that product quality, price and delivery are key determinants in the supplier evaluation process. The eighteen criteria considered for this study were mapped onto their respective cluster, namely: supplier’s organisational system and technology, buyer-supplier relationship and economic value. The findings of this study should assist various groups of stakeholders (e.g., suppliers, buyers and end users) to gain a better understanding of social behaviour in making purchase decisions, particularly with regard to power utilities.

Keywords: Procurement; evaluating purchasing performance; supplier selection; case study; statistical analysis