SUPPLIER SELECTION METHOD USING ANALYTICAL HIERARCHY PROCESS (AHP): A CASE STUDY ON A JIT AUTOMOTIVE INDUSTRY
ABSTRACT: Increasing product
varieties has triggered strong competition among companies. To deal with this problem,
every company has to improve their performance in order to produce the best
quality of product. To fulfill the needs of best product, supplier selection
process plays an important role in improving company’s performance. In actual
conditions, process of supplier selection is not an easy thing to determine,
yet it needs a right strategic way to select the potential suppliers. In
Just-In-Time (JIT) manufacturer, supplier selection, as long-term investment,
is one of the success keys to the JIT implementation. Thus, the objective of
this paper is to use a method for supplier selection process in JIT manufacturing
industry by applying Analytical Hierarchy Process (AHP). This paper is written
based on a study in the largest JIT Automotive Industry in Indonesia. The
method begins by applying AHP to settle the criteria considered in a multi
criteria and multi person decision making problem. A detailed step-by-step
implementation of the method is provided and a case study based on a JIT
automotive industry is conducted to prove and ensure the consistency and
validity of the applied method. The proposed method AHP, as a method for
selecting supplier in a multi person and multi criteria decision, aims to
fulfill all the demand in the supplier selection process by considering all 5
criteria and 4 potential suppliers. The 5 criteria are cost, high quality,
supplier experience, supplier capability and delay time (delivery).
Author: Johan Oscar Ong and
Dicky Salim
Journal Code: jptindustrigg140006
