Designing Vendor Performance Assessment: Integrated Methods of Vendor Performance Indicators and Analytical Hierarchy Process

Abstract

Vendor is an essential component in the supply chain. Selection of the best supplier can improve the company's quality and competitiveness. PT. X is an Engineering, Procurement, and Construction company that manufactures industrial equipment. In the production process, carbon steel plate is one type of raw material the company needs. The best suppliers for carbon steel plates are needed since it is a raw material with a critical material class and often experiences problems with its quality. This study evaluates supplier performance using the Vendor Performance Indicator approach, with Quality, Cost, Delivery, Flexibility, Responsiveness, Health, Safety, and Environment criteria. The weighting analysis will be done using the Analytical Hierarchy Process method using Software Super Decision. The results of this study indicate that PT. BB is the best supplier of carbon steel plates, with weight for Quality of 24.5%, Cost of 17.8%, Delivery of 23.2%, Flexibility of 7.7%, Responsiveness of 7.9%, Health Safety and Environment of 18, 8%. The supplier with the highest weight is recommended based on the Vendor Performance Indicator and Analytical Hierarchy Process method and is prospected to become a long-term partner of PT. X.