Abstract
This study aims to design a supplier performance assessment model for information technology services provider in small medium enterprises (SME) in Indonesia. Supplier performance assessment is important to improve supplier performance and maintain long-term relationships between SME (buyer) and their suppliers. This supplier Assessment models are developed based on the review literature and interviews with procurement staff in SMEs. Performance assessment criteria are identified and tested for validity by providing a questionnaire to procurement section in SMEs. In order to obtain importance weight of each criteria toward performance score, a questionnaire to weighed the criteria are distributed to procurement staff and analyzed the answers using the Analytical Hierarchy Process (AHP) method. The final performance score is calculated based on the standardized value of each criteria multiplied by its weight. Based on the implementation of this model in SMEs, it is known that the proposed model is suitable to assess the supplier’s performance and greatly help the SMEs in managing the performance of their suppliers.
Highlights
Today, companies tend to outsource their goods and services and focus on their core business. this resulted in the company increasingly dependent on suppliers
Based on [2], it was found that the contribution of procurement and supply chain cost is 30% to 70% of cost of good sold in some industries such as chemical and automotive
The company's dependence is not followed by a system of supplier performance assessment
Summary
Companies tend to outsource their goods and services and focus on their core business. this resulted in the company increasingly dependent on suppliers. Companies tend to outsource their goods and services and focus on their core business. This resulted in the company increasingly dependent on suppliers. The company's performance is highly rely on supplier performance [1]. Based on [2], it was found that the contribution of procurement and supply chain cost is 30% to 70% of cost of good sold in some industries such as chemical and automotive. Many organizations reduce the number of suppliers and prefer to manage relationships with strategic suppliers in the long term [3]. The company's dependence is not followed by a system of supplier performance assessment. Many companies don’t conduct the evaluation and monitoring of supplier performance regularly [4]
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