VENDOR SELECTION FOR SAEJIVA

• Main Author: Pijar Zaman, Aldien
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/83668
• Institution: Institut Teknologi Bandung

The Indonesian perfume industry is projected to grow significantly with an annual growth rate of 2.73% from 2024 to 2028. Meanwhile, the global natural fragrance market is growing faster than synthetic fragrances, with a CAGR of over 9% from 2023 to 2032. However, extracting essential oils is more expensive than producing synthetic perfumes due to the need for large-scale machinery and skilled labour. Companies can overcome capacity limitations by outsourcing to external vendors. Saejiva, a natural fragrance brand, faces challenges in vendor selection, experiencing issues with inefficiency, delays, and poor product quality from previous vendors, has the effect of reducing potential profits and necessitating a reevaluation of their vendor choices. This study uses the Analytical Hierarchy Process (AHP) to help Saejiva select a new vendor by prioritizing criteria that meet the company's requirements and recommending the best vendor. Data was collected through literature reviews to identify relevant criteria, Focus Group Discussions (FGD) to find essential criteria for the company, and AHP questionnaires. Saejiva's C-level executives acted as experts in the FGDs and AHP questionnaires to determine criteria priorities and vendor alternatives. The results showed the importance levels of criteria as follows: capability (0.3668), quality (0.1848), cost (0.1382), service (0.1068), capacity (0.0654), delivery (0.0606), warranty (0.0525), and performance history (0.0249). The importance levels of vendor alternatives were SKI (0.4539), AVF (0.3236), and SHB (0.2225). Thus, the best vendor recommended for Saejiva is SKI as the next vendor.