Supplier Selection Construct: Instrument Development and Validation

Chinchun Hsu
V. R. Kannan, Utah State University
G. K. Leong
K. C. Tan


Purpose – To develop and test a reliable and valid supplier selection measurement scale that can be applied in different geographic regions, namely, the USA and Europe. Design/methodology/approach – A three-factor supplier selection measure is developed via extensive literature review and practitioner interviews. Psychometric properties of the survey instrument are evaluated using data from the ISM-US sample via exploratory factor analysis. Based on the results, the survey instrument is modified and the revised instrument is mailed to a larger sampling group (APICS-US and APICS-Europe). Confirmatory factor analysis is used to validate the proposed three-factor supplier selection construct and to test its validity across national boundaries. Findings – This study demonstrates that underlying the documented supplier selection criteria is the need to assess a supplier's quality and service capabilities as well as its strategic and managerial alignment with the buyer. Research limitations/implications – Although the research design incorporates extensive literature reviews, it does not capture every aspect of complex supplier selection criteria. Future efforts should establish a valid, reliable instrument for the underlying constructs. Practical implications – This study provides supply management professionals with guidelines for analysing selection decisions, and also shows that the underlying dimensions of supplier selection are applicable for both US and European firms. Originality/value – This study contributes to the literature by answering the following two questions: what exactly constitutes effective supplier selection and what are the appropriate measures for selecting key suppliers?