Analytical Hierarchy Process Model for Vendor Selection

Abstract

The selection of vendors in Supply Chain Management is crucial in every company because it will help companies in dealing with global problems where the selection of the right vendor will have a significant impact on company efficiency. The purpose of this study is to determine the priority order of the criteria that influence the selection of vendors for operational vehicles and to analyze these criteria so that alternative vendors should be chosen by the company, by taking a case study at an oil drilling company in Indonesia. This study implements the Analytical Hierarchy Process (AHP) method by using 5 (five) criteria identified through the Systematic Literature Review (SLR) method, namely Quality, Delivery, Cost, Service, and Information Technology. The use of criteria in this study is combined with 4 (four) alternative vendors who have become partners with an oil drilling company in Indonesia. The results showed that the most significant criterion in the selection process was the Service criterion, and PMS was chosen as the vendor of operational vehicle suppliers at oil drilling company in Indonesia based on the priority value of the supplier is the largest. This research will contribute to the company in selecting vendors based on decision making by considering various criteria.