Designing a Vendor Performance Assessment Model to Develop a Vendor Management System
Keywords:
AHP, assessment, evaluation, TOPSIS, vendor management, vendorAbstract
The procurement of goods/services has an important role in providing profits for the company and avoiding losses. PLN UP3 Bontang is currently facing challenges in assessing vendor performance that has not been effective, including its follow-up, as well as the absence of rules related to vendor selection which causes the procurement process to take longer. This research aims to design a vendor performance appraisal model to develop an effective and efficient vendor management system. The research method used Focus Group Discussion (FGD) with experts to identify assessment criteria, then applied the Analytic Hierarchy Process (AHP) method to determine the weight of the criteria and the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) for vendor ranking. The results showed six main criteria: sanctions (25.5%), quality & quantity (22.8%), time (14.9%), service (14.1%), K3 management (12.2%), and financial vendor (10.4%). Evaluation of five jaskonhar vendors showed that PT SE obtained the highest rating with a preference value of 0.903, while PT PM was in the lowest position with a value of 0.051. This model provides an objective basis for strategic decision-making in vendor management and strengthens long-term cooperative relationships between companies and vendors.
References
Agndal, H., Arvidsson, A., Nilsson, U., 2023. Managing appropriation concerns and coordination costs in complex vendor relationships: Integration and isolation as governance strategies. Industrial Marketing Management, 113.
Alkahtani, M., Al-Ahmari, A., Kaid, H., Sonboa, M., 2019. Comparison and evaluation of multi-criteria vendor selection approaches: A case study. Advances in Mechanical Engineering, 11(2), pp.1–19.
Becerra, P., Mula, J., & Sanchis, R., 2022. Sustainable inventory management in supply chains: Trends and further research. Sustainability (Switzerland), 14 (5), pp.1-19
Boonsthonsatit, S.K.J., 2015. Lean supply chain management-based value stream mapping in a case of Thailand automotive industry. International Conference on Advanced Logistics and Transport.
Chatterjee, S., Chaudhuri, R., Kumar, A., Aránega, A.Y., Biswas, B., 2023. Development of an integrative model for electronic vendor relationship management for improving technological innovation, social change and sustainability performance. Technological Forecasting and Social Change, 186.
Choi, T.-M., 2020. Customer service management in fashion retail supply chains. In Fashion Retail Supply Chain Management. 1st ed. CRC Press.
Christopher, M., 2016. Logistics & supply chain management. 5th ed. Pearson Education Limited.
Cousins, P. D., Lawson, B., Squire, B., 2008. Performance measurement in strategic buyer‐supplier relationships: The mediating role of socialization mechanisms. International Journal of Operations & Production Management, 28(3), pp.238–258.
Gordon, S., 2005. Seven steps to measure supplier performance. Quality Progress, 38 (1), pp.20–26.
Gurtu, A., Johny, J., 2021. Supply chain risk management: Literature review. Risks, 9 (1), pp.1-16.
Itang, Sufyati, H. S., Suganda, A. D., Shafenti, & Fahlevi, M. (2022). Supply chain management, supply chain flexibility and firm performance: An empirical investigation of agriculture companies in Indonesia. Uncertain Supply Chain Management, 10 (1). pp.155–160.
Kumari, R., Mishra, A.R., 2020. Multi-criteria COPRAS method based on parametric measures for intuitionistic fuzzy sets: Application of green vendor selection. Iranian Journal of Science and Technology, Transactions of Electrical Engineering, 44 (2).
Lam, H.Y., Tsang, Y.P., Wu, C.H., Chan, C.Y., 2021. Intelligent e-vendor relationship management for enhancing global B2C e-commerce ecosystems. Journal of Global Information Management, 29 (3), pp.1-25.
Liu, A., Xiao, Y., Lu, H., Tsai, S.B., Song, W., 2019. A fuzzy three-stage multi-attribute decision-making approach based on customer needs for sustainable supplier selection. Journal of Cleaner Production, 239, 118043.
Mutegi, D.M., Karani, A.M., 2024. Vendor management practices and the performance of energy state corporations in Kenya. International Journal of Social Science and Humanities Research (IJSSHR), 2 (1).
Önüt, S., Kara, S.S., Işık, E., 2009. Long term supplier selection using a combined fuzzy MCDM approach: A case study for a telecommunication company. Expert Systems with Applications, 36 (2), pp.3887–3895.
Orji, I.J., Wei, S., 2015. An innovative integration of fuzzy-logic and systems dynamics in sustainable vendor selection: A case on manufacturing industry. Computers & Industrial Engineering, 88, pp.1–12.
Pujawan, I.N., Mahendrawathi., 2017. Supply chain management. Yogyakarta: Andi Rajawali Press.
Rouyendegh, B. D., 2015. Developing an integrated ANP and intuitionistic fuzzy TOPSIS model for vendor selection. Journal of Testing and Evaluation, 43(3), pp.664–672.
Rouyendegh, B.D., Erkan, T.E., 2012. Selecting the best supplier using analytic hierarchy process (AHP) method. African Journal of Business Management, 6(4), pp.1455–1462.
Zolfani, S.H., Chen, I., Rezaeiniya, N., Tamošaitiene, J., 2012. A hybrid MCDM model encompassing AHP and COPRAS-G methods for selecting company vendor in Iran. Technological and Economic Development of Economy, 18(3), pp.529–543.
