Write an essay on Supplier Selection Standards in Oman?
The success of a construction project depends on quality and safety of the ingredients and products delivered by the suppliers. Therefore, identifying the right supplier is a very important business decision. Most of the companies consider that selecting the right supplier is a burdensome task, but they also understand the importance of this selection process. Therefore, construction companies and organizations have established their own processes to select the right supplier for their projects (Jarkas, Balush and Raveendranath 2015). However, this process varies from country to country. This task will mainly focus on the selection process of suppliers in the construction business in Oman and will compare it with other processes that are used in other parts of the world.
The aim of this research will be to find out how suppliers are selected for a construction project in Oman and how this selection process is different from other processes which are used by other countries in the world.
The research will be conducted to find out four objectives,
According to the BMI research reports, the growth of Oman’s construction industry has gone down to 4.5 percent from 5.5 percent in 2015 because of falling oil prices and its impact on Oman’s economy (Hakro and Omezzine 2016).Therefore, the country is now facing some issues while selecting qualified suppliers for their construction projects. Lack of qualified suppliers is hampering their construction projects which in turn is affecting their chances to improve their economy because Oman’s growth strongly depends on their construction industry also alongside with their oil industry. Therefore, it is important to carry out research to find out the problem and the solution related to the construction suppliers of Oman.
Figure 1: Research Structure
(Source: Author)
2.1 Standards of selecting construction suppliers in Oman
Suppliers of goods and services for a construction project in Oman must go through a “Supplier Approval Process” to be qualified and added to the Approved “Project Supplier list” (Islam and Khadem 2013). This process is divided into two parts which are the Pre-qualification stage and Supplier Qualification stage. Initially, a supplier who is willing to design and deliver goods and services to a construction project in Oman must have three qualities which are Safe, Reliable and Compliant.
“The Approved Supplier “list (AVL) is one of the strategic levers used by organizations to manage the safety of their construction projects and to ensure supplier quality. The process of selecting a perfect construction supplier is built upon five pillars (Nasseri and Aulin 2016). It is mandatory for the suppliers to assess through those five key lenses which are Technical, Quality, Financial, HSSE and ACDD.
Prospective Supplier
Supplier pre-qualification
Supplier Qualification
HSSE
Technical
Quality
Financial
ACDD
Figure 2: Qualification process for construction suppliers in Oman
(Source: Bilal and Mqbali 2015)
This qualification process serves to ensure consistency in supplier evaluation, stronger and deeper relationship between construction companies and its suppliers, shared learning and opportunities for improvement.
Prequalification is the first step of AVL process and Qualification is the second and last process. After completing both processes, suppliers are listed in three qualification statutes which are Approved Level 1, Approved Level 2 and Not Approved (Memon, Rahman and Jamil 2014). Suppliers who have scored most points and met most of the requirements will be enlisted in Approved Level 1, suppliers whose performance were average and met some of the requirements will be enlisted in Approved Level 1 and suppliers who have performed poorly and could not meet any requirements will be enlisted in Not Approved status (Yafai et al. 2014). Suppliers who are enlisted in either level 1 or level 2 statuses will be added to bid lists for any relevant scopes of work.
The selection process for construction suppliers across the world is slightly different from the process used by Oman. Oman uses a qualification process which is complicated and full of questionnaires and practical and theoretical tests (Chai, Liu and Ngai 2013). On the other hand, in the most parts of the world, companies follow a simple process that includes five key steps to select an appropriate supplier. Those steps are locating a supplier, evaluating supply performances, collecting feedback from suppliers, certification method and establishing a partnership.
Before selecting a supplier, companies locate some suppliers to evaluate their potentialities and to compare costing. Many companies across the world have their supplier assemblage team that works with the potential suppliers to develop identification (Kumar, Jain and Kumar 2014). The supplier selection team explains how the materials will be used in a project and the manufacturing process. The ultimate goal of the team is to achieve a win-win situation for the manufacturer and supplier. While selecting a supplier, companies across the world not only consider supplier cost but also consider the total cost of the contract, delivery commitments, reliability and responsiveness, savings of resource both hard and soft (Khaleie, Fasanghari and Tavassoli 2012).
This is another important step in selecting a construction supplier that allows the companies to develop and audit and assessment program. Organizations always conduct an audit via multiple stages of the constructor and supplier relationship (Ferreira and Borenstein 2012). This program confirms that the supplier does not have any critical significance or quality system failures that can affect the progress of a construction project (Ageron, Gunasekaran and Spalanzani 2012). Another reason of this program is to figure out the strengths and weaknesses of a supplier before the partnership becomes official. Even after the contract is done, the process will be continued to categorize its suppliers into either a level of risk or a level of importance.
For construction projects, it is vital that suppliers understand their won operations. Therefore, companies communicate with the suppliers via self-assessment questionnaires to identify performance gaps of the suppliers (Omurca 2013).
Companies offer certificates to their suppliers based on their positive performance and strong relationship status. When a supplier fulfills a set of criteria established by its organization, then it receives performance certificates (Chen and Chao 2012). However, certificates can be lost if the supplier is working poorly and not meeting targets of the company.
Companies follow another step to ensure supplier performance and quality by forming a partnership with their suppliers. Partnership helps the suppliers to understand the source of materials for that company and the goal of that company during a project (Li et al. 2012). When suppliers gain full knowledge about those factors, then they can provide high quality services. With a strong business partnership, a supplier is more likely to anticipate what is needed from the manufacturer and starts to take a leadership role in communication.
This research will focus to find out issues and challenges in the construction supplier selection process of Oman. According to Islam and Khadem (2013), construction industry of Oman is mostly affected by “lack of professionalism” of the suppliers. Suppliers for construction projects of Oman are accused of showing the lack of professionalism, delivering fewer amounts of materials, incomplete drawing, poor communication, inspection delay, bureaucracy and delay of inspection (Islam and Khadem 2013). Therefore, it is obvious that the standard of qualification process to select a construction supplier in Oman is not an effective program, as suppliers selected through this program are not performing well (Ruqaishi and Bashir 2013). That is why it was important to conduct research to find out issues and solutions that are affecting the quality of suppliers in Oman (Saleh 2015).
Figure 3: Conceptual Framework
(Source: Author)
3.1 Proposition of the Research
The particular research makes the proposition to find out the current standard of selecting suppliers for construction projects in Oman. Oman strongly depends on their construction industry along with oil industry for their economy growth. Currently, their construction industry is facing some issues and challenges because of their suppliers. Therefore, the research will help to find out those issues that are affecting those selection processes. Authentic sources of methods which are reliable for the context will be followed to collect data along with positive philosophy, deductive approach and analytical strategies. The study will also follow probability sampling method and qualitative data collection process.
Figure 4: Research Paradigm
(Source: Creswell 2013)
This research will follow the positivism research paradigm, as it will allow making a analytic and valid investigation on the topic based on appropriate facts and evidences. On the other hand, interpretivism will put stress on the application of human perception to investigate the research problem whereas positivism refers to the examination of the problems with the help of real facts. Therefore, choosing interpretivism might prove improper in this case.
The Inductive and Deductive approaches are mostly used research approaches. For this research, the deductive approach will be used as it will help to deduce knowledge from the existing theories, models and concepts on the standards of selecting suppliers in Oman for construction projects (Clarke et al. 2015). Using inductive approach will be irrelevant as there is narrow possibility to create new theories amidst so many theories about the topic.
The research will be carried out using analytical research purpose to deal with the research problem from different paradigms. The analytical purpose will also help to understand and evaluate different variables. Besides, the analytical purpose will be suitable for the research as this research already has well-framed research objectives and questions. The exploratory research purpose will be inappropriate as it develops questions with the progress of the study.
Qualitative data collection method will be followed to collect the data related to the topic which will help to continue the research in a proper manner (Creswell 2013). To carry out the qualitative study it is essential to perform interviews with 15 managers of different companies in Oman. The interview with each of the managers will be one hour.
Two types of sampling methods are used commonly in the researches which are probability sampling method and non-probability sampling method (Frels and Onwuegbuzie 2013). Non-probability sampling method will be used I this research by conducting the interview with 15 managers of different construction companies.
It is necessary to follow the rules and regulations of the Data Protection Act 1998. The participant managers will have their rights to quit at any time of the research. They must not be forced to participate at any cost (Miller et al. 2012). Data collected by the researcher will be used for the research purpose and academic purpose only, and it will not be used for any other purpose. Research questionnaires will not include any personal questions or questions that will demand any sensitive information on the companies. Besides, it is very important that personal information like contact names, numbers, e-mail ids and addresses of the managers will not be shared with any other party.
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