Supplier Selection a Strategic Tool of the Purchasing Function: Its Role in Profit Maximization

The profit potentials of a manufacturing firm through an efficient and effective supplier selection process of the purchasing function is high and guaranteed. Profit is the ultimate goal of shareholders in establishing business enterprises. This paper attempt to examine supplier selection a strategic tool of the purchasing function and its role in profit maximization. The authors discussed three dimensions of supplier selection such as negotiation, competitive bidding, and constrains in the contemporary supplier selection process. Since purchasing function is responsible for controlling a dominant share of the company’s revenue. The authors, therefore, recommend that it should be the duty of the purchasing personnel to negotiate, select supplier(s) and execute all company commitments within the purchasing framework to get the optimal profit — right quality at the lowest cost, to develop the satisfactory supply chain and maintain good partnering relationships with suppliers. Thus, to maximize profit, manufacturing firms in Nigeria should adopt a well-organized and functional purchasing systems where the supplier selection process is handled by highly qualified professionals in line with the purchasing ethics, principles, and practice.