Supplier selection in supply chain management using analytical network process for Indonesian cement industry

Abstract

Supply chain management has increased more significance with the impact of globalization. In the present worldwide market, well-managed supply chain is a standout amongst the most vital requirement to be more competitive in the market. For any organization incorporate cement industry, the most critical decision in initial process of supply chain management is to buy products, materials or services from suppliers. So the role of suppliers is irrefutable important in the global aggressive markets. Appropriate decision of supplier selection can lead to reducing cost in supply chain management. However, it is becoming more complex because of existing various criteria and involving the suitable experts in the company to make valid decision in accordance with its criteria. In this study, the supplier selection of an Indonesia’s leading cement company is analyzed by using one of the popular multi-criteria decision making method, Saaty’s analytical network process (ANP). It is employed for the selection of the best alternative among three suppliers of pasted bag. Supplier with the highest rank comes from several major steps from building the relationship between various criteria to rating the alternatives with the help of experts from the company. The results show that, Communication capability, Flexible payment terms, Ability to meet delivery quantities are the most important criteria in the pasted bag supplier selection in Indonesian cement industry with 0.155, 0.110 and 0.1 ANP coefficient respectively. And based on the ANP coefficient values in limit supermatrix, the A2 or supplier 2 had the highest score with 64.7% or 0.13 ANP coefficient.