An analytical method for benchmarking best peer suppliers

An analytical method for benchmarking, using data envelopment analysis, is proposed that can help companies identify their most efficient suppliers, the suppliers among the most efficient with the most widely applicable TQM programs, and those suppliers who are not on the efficient frontier but who could move toward it by emulating the practices of their ‘best peer’ supplier(s). These ‘best peer’ suppliers are those that can be imitated by firms with similar organizational structures with the least amount of effort. The technique enables a purchasing manager to identify suppliers that could benefit most from supplier development efforts and identifies the suppliers for others to study and adopt appropriate practices from, without relying on reputation or advertised excellence. This method helps an organization conserve time that might otherwise be spent on inappropriate search and implementation efforts, thus freeing managerial resources to be applied where they can have their greatest impact.