Third-Party Logistics Company Supplier Evaluation using Analytical Hierarchy Process Method: A Case Study in the Manufacturing Industry

Abstract

The need for suppliers who have good quality is a very important problem for both manufacturing organizations and organizations engaged in the service sector. Purchasing function is also vital in determining the profitability and survival of
business organizations. Changes in customer demand, improvements in performance, shorter product life cycles and price
competition are a form of dynamic environmental challenges. This journal aims to evaluate the performance of tire suppliers for
the company's operational vehicles using several criteria. The more criteria the company wants to evaluate its suppliers the more complicated the problems will get, therefore a decision-making technique is needed in selecting suppliers. One method used in decision making is the Analytical Hierarchy Process (AHP). AHP is used because the concept is simple, easy to understand, and has the ability to measure related performance from supplier alternatives in a simple mathematical form. Using 4 criteria, the
criteria are price, quality, delivery time, and service. Data processing result using AHP quality has the most important weight with a value of 1,318, followed by price and delivery time with weight 0.975 and last service with weight 0.934. After analyzing the priority criteria and supplier weights, it can be seen in table 3 that Supplier A has the best performance with a value of 4,594 compared. Supplier D's second order with a value of 4,385, followed by Supplier B has a performance value of 4,158, and Supplier who has the lowest Supplier C performance value has a performance value of 4,106.