Service characteristics need to be considered when

Service operations differ from manufacturing based operations with some characteristic ofservices such as intangibility, inseparability product and consumption, heterogeneity andinapplicability of warehousing function. These characteristics need to be considered when thesupplier selection criteria are determined in the service supplier selection process (Baltaciogluet al., 2007). In order for the supplier relationship management system to perform successfullyin the service industry, service firms and their suppliers should collaboratively create anddeliver services faster and at the lowest total cost (Cho et al., 2012).

Price, quality and on-timedelivery are the most considered three supplier selection criteria in the literature; however theyare not enough to select strategic supplier in today’s competitive environment. Reliability,technical capability, sustainability, flexibility, service quality and communication skills are someother factors which are need to be considered to develop a long-term supplier relationship(Muralidharan, Anantharaman, ; Deshmukh, 2002).

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