IOSR Journal of Mechanical and Civil Engineering (IOSR-JMCE) e-ISSN: 2278-1684,p-ISSN: 2320-334X, Volume 6, Issue 2 (Mar. - Apr. 2013), PP 43-51 www.iosrjournals.org www.iosrjournals.org 43 | Page Prime factors of Vendor Selection for Indian Telecom Service Provider for effective SCM:A Factor Analysis using Centroid Method Mr.Smrutiranjan Mohanty 1 , Dr.Balaji M.Dabade 2 1 (Research Scholar, Department of Production Engineering, Shree Guru Gobind Singh Institute of Engineering & Technology, Nanaded, Maharashtra, India) 2 (Professor, Department of Production Engineering, Shree Guru Gobind Singh Institute of Engineering & Technology, Nanaded, Maharashtra, India) Abstract: To have a effective supply chain it is very much essential to have effective and reliable vendor. It is far more important in case of a service sector. As service is intangible and can only be felt ;hence very much depends on the quality of delivery and after sales activity. Ineffective and unreliable vendor can have a cascading effect in all aspect of service chain resulting customer dissatisfaction. The present study tries to find out the parameter or quality of a vendor that is preferred by telecommunication companies. As telecommunication is a infrastructure service any weak link in the supply chain will have a catastrophic impact on the end user. As vendor is one of the prime component of supply chain its careful selection is of immense importance. There are numerous variables to select a vendor. But to have a quick and effective decisions making these numerous variables are reduced to few factors. In this study the centroid method of factor analysis is used to find four important factors. The study was carried out by interacting executives of around 8 telecom companies amounting to 57 effective data. A broad outline of factors and encompassing variables under each factor were depicted. Keywords - Factor analysis, Supply Chain and Vendor selection, I. Introduction Telecommunication is a vital infrastructure for growth of economy. Its operational purview expands from basic infrastructure to entertainment. Trade and commerce is unthinkable in the present world without telecom infrastructure. The system is highly technology driven and dynamic in nature. To keep the system operational it is very much essential to have a effective supply chain where availability of components, spares and services should immediate and adequate. In Indian context the procurement (either product or service) is quite cumbersome unlike the developed economy. Hence to select a vendor or to outsource a service a company has to consider and evaluate many parameters which sometimes overlap and make the process confusing. Maggie C.Y. Tam, V.M. Rao Tummala[1] has put forth 19 different parameter for a vendor selection process while studying the Hong-Kong telecom sector encompassing them into thee primary parameters i.e Cost,Technical Capability and After Sales Service.; Sanjay Kumar et.al[2] while analyzing vendor selection for manufacturing industry suggested that reliability of the vendor, product quality and the vendor experience are the top three problems in the vendor selection. V. R. Pramod, D. K. Banwet [3] has made a study on telecommunication service supply chain of Indian public sector telecom companies using ANP technique and found out a lot of interdependencies of factors in telecom service chain. However because of typical nature of Indian business scenario the researchers attempted to make a comprehensive study of main factors of selecting the vendor for a telecom service provider (Public enterprise as well as private) having pan India operation 1.1 Definition and Progress of SCM in Telecom Service: While running their business of providing telecom service, the service providers usually deal with a number of activities, such as: procurement (both hard ware and soft ware), service operation(which includes installation), warehouse management, selling, marketing, and customer servicing(fault diagnosis, repair and rectification) among others. To help them to manage these activities, companies try to automate (i.e placing a system into work) their business processes. Though, independent software and hardware solutions are used for each of the activities; however, in practice, all the activities are highly connected and interdependent. Figure 1 below depicts atypical operation of a telecom service provider.