MULTI-CRITERIA DECISION-MAKING FRAMEWORK FOR PERFORMANCE EVALUATION AND DEVELOPMENT OF STRATEGIC SUPPLIERS WITH SUSTAINABILITY CRITERIA

• Main Author: Mety Zalynda, Putri
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53798
• Institution: Institut Teknologi Bandung

This research was aimed at designing a strategic supplier evaluation decision-making framework that considers the sustainable criteria (triple bottom line approach to sustainability), namely economic, environmental, social criteria. This research framework developed can be used to assess supplier performance and determine the follow-up actions to improve strategic supplier performance based on the results of strategic material evaluation and strategic supplier performance. Research mapping which was based on literature studies shows that previous studies on supplier evaluation were mostly focused on economic criteria. In addition, previous studies generally evaluated suppliers based on performance criteria alone. Yet the literature study found few studies that discuss supplier evaluation covering the follow-up stage for improving the supplier performance. This research was aimed at filling these gaps. The development of the supplier evaluation framework was mainly based on Park et al. (2010) and Osiro et al. (2014). The part that supports follow-up actions to improve the supplier performance was developed based on Schuh et al. (2014). Analytics Hierarchy Process (AHP) and Quality Function Deployment with House of Quality (HOQ) methods were used in the strategic supplier performance evaluation framework. The weighting of the performance evaluation criteria in this study was derived from the importance stakeholders requirements in combination with other strategic supplier performance criteria. The strategic supplier evaluation framework was validated through case studies in two automotive industries in Indonesia having parent companies in Japan, namely PT 1 and PT 2. The evaluation of strategic suppliers at PT 1 was also implemented at PT R, PT D and PT M. Validation was executed by conducting interviews and distributing questionnaires. The results of the validation in the two companies show that PT 1 and PT 2 used almost the same way in evaluating the performance of their suppliers. The performance evaluation of strategic suppliers at PT 1 was mainly focused on economic criteria, namely quality, delivery and cost. In addition to the economic criteria, performance evaluation at PT 2 also considered safety as a part of social criteria. The result of HOQ 1 decision step shows that of the 12 stakeholder requirements, 8 have similarities in the two companies and the other 4 stakeholder requirements are not significantly different. The results of the importance rating of the evaluation criteria from HOQ 2 show that quality of product was found to be the most important criteria in both companies. iv According to the results of validation in the field, and supported by Patil & Jyoti's (2020) research on 14 car manufacturers in India, 16 strategic supplier performance evaluation criteria proposed in this research can be used to evaluate strategic supplier performance in the automotive industry in Indonesia with a parent company in Japan. The results of this research are expected to support automotive companies in managing their relationship with strategic suppliers that will finally foster long-term mutually beneficial relationships between the company and their suppliers.