Total Cost Supplier Selection Model: A Case Study

This article summarizes General Electric Wiring Devices' (GEWD) experience in developing a total cost supplier selection methodology that seeks to define the appropriate balance between qualitative approaches and complex, fully cost‐based methods. Utilizing the GE “Work‐Out!” process, a cross functional team classified supplier selection elements into one of three categories: (1) risk factors, (2) business desirable factors, and (3) measurable cost factors. The authors discuss these variables as they relate to GEWD's sourcing practices. The model's applicability is demonstrated in several different case scenarios. For practical application it is programmed in C computer language. In practice, the requirement for no maintenance beyond default cost factor revisions renders the model extremely adaptable for practical decision‐making purposes.