Selection of subcontractor vendor using analytic hierarchy process (AHP) method in construction company

Abstract

Sub-contractor vendor is the one of the most important aspects for the construction company to finish the project. Failures in vendor selection could lead to severe impact of project on time, on quality and on budget. The selection of sub-contractor criteria is the initial stage in the decision-makingprocess by procurement. This research use multi criteria decision making, with Analytic Hierarchy Process method. Super Decision Software is used to help in obtaining weight and ranking values. The purpose of this research is to determine the criteria in selecting vendor and choosing the best sub-contractor vendor. Criteria in selecting subcontractors shall comply Indonesia’s Government law & policies which classify into six aspects, namely legal aspects, technical aspects, financial aspects, managerial aspects, safety aspects, and aspects of the vendor’s reputation. Based on company data, there are 3 candidates of sub-contractor vendors who will be selected in doing project work. The results showed that the priority on the criteria for safety aspects gained a weighting of 33.9%, the priority in the sub-criteria was coordination in the project with a weight of 63%, and the priority of the vendor which was vendor B with a weight of 36.7%.