Supplier Performance Assessment Research Articles

Supplier performance assessment: Empirical evidence in Indonesian freight forwarding companies

This research aimed to assess the results of two vendors used by the company in the shipping process of export goods. Two leading suppliers for one similar activity had caused more difficulties in the monitoring and controlling activities of DHL Global Forwarding Indonesia. This research used qualitative and quantitative methods, with the Analytic Hierarchy Process decision-making method using 36 internal staff members as the sample. Through a qualitative calculation method by distributing questionnaires to the existing suppliers, namely Monang Sianipar Kargo and Andima Transportindo, it was found that the weighted score for Monang Sianipar Kargo was 22.84 and for Andima Transportindo was 10.66. Subcriteria and indicators should be prioritized in the criteria of Price and service, significantly to improve the performance of problematic suppliers. This research recommended using the Analytic Hierarchy Process for assessment since it facilitated the research development by the opinion of the company’s experts. Such a finding implied that a policy from the management was needed in the assessment of suppliers. As an implication, it was necessary to assess all suppliers cooperating with DHL Global Forwarding Indonesia by using actual data from the current month.

Penilaian Kinerja Pemasok Menggunakan Metode Vendor Performance Indicator dan Fuzzy Analytical Hierarchy Process (FAHP)

<p><strong>PT. Agripratama Mitra Sejahtera, a company with the nickname Sobat Veggies (SV), buys and sells more than 100 types of vegetables, fruit, meat and other related products. SV buys from farmers and other companies with different prices and product quality, therefore SV needs to evaluate these suppliers for cost efficiency. The analytical methods used by SV to help in making the right buying decisions are the Vendor Performance Indicator (VPI), followed by the Fuzzy Analytical Hierarchy Process (FAHP). Performance appraisal is carried out on selected vegetable commodity suppliers because they have high sales levels. The VPI method is used with the concept of QCDFR (Quality, Cost, Delivery, Flexibility, Responsiveness) with a total of 13 sub-criteria. The method gives 5 best vegetable suppliers namely CV. Madani Creative Business, Depari Group, CV. Mizan, Central Market, and Quality Fresh Organic. Following through using the FAHP method, we get the ranking as follows: (1) CV. Madani Creative Business with a value of 0.50, (2) the Central Market with a value of 0.48, (3) Quality Fresh Organic with a value of 0.46, (4) Depari Group with a value of 0.44 and (5) CV. Mizan with a value of 0.41. </strong><strong></strong></p><p><strong><em>K</em></strong><strong><em>eywords</em></strong> - <em>Supplier Performance Assessment, VPI, FAHP, QCDFR</em></p>

Application of Statistical Process Control for the Assessment of Supplier Performance and Process Capability in an Automotive Manufacturing Company

One of the most important attributes to manufacturing is product quality. It relates to the historical rejection rate during a period of time of the products delivered to the customer. Rejection is due to deviations from specifications in the raw material supplied by suppliers, process design, and the quality control of the manufacturing process. The non-conforming parts can be detected during incoming inspection or during work in process. With regards to this, the standardization and maintenance of process equipment are of prime importance in ensuring the quality of a process and the products that are derived. Cost is another important attribute of the product as it affects the bottom-line. In this regard the competence of the supplier of raw material to design, develop and launch products within specifications becomes imperative in a manufacturing process. In the current competitive environment, it is crucial to assess suppliers as good quality raw material are important in the development stage, as this can have an adverse effect on the customers response. Supplier flexibility involves the response time when engineering changes are needed during the development stage. As a result, research and development activities are used to initiate and measure the ability of the supplier to provide support during the process. It is an important attribute as most products, after launching, demand continuous improvement to remain competitive. Procurement of materials and equipment is considered the first step in supply chain management of many companies. It is also broadly known that the performance of suppliers directly influences the company’s efficiency and competitiveness. Supplier performance evaluation is a crucial process to identify strengths and weaknesses of suppliers which can help the company to manage them. There are various supplier performance evaluation methods. In this study process quality of the existing system of producing steel shafts for an automotive industry was first evaluated and based on this study the machine was recommended for upgrading by engineering design. This was due to the process capability analysis of the machine, which did not meet the stipulated standard of 1.3 for the machine’s capability index. Although, the raw material supplied by the suppliers were within the measured confidence interval, the summary reports did not meet the required standards. In order to develop a performance evaluation system of the suppliers of raw material to the company, four main-criteria, may be developed, namely: quality, delivery, service, and flexibility. Statistical analytical studies performed during the process on five selected suppliers of raw material showed that the most important criteria of the process metrics was machine performance, followed by quality of suppliers in terms of the supply of raw material. Based on this study, the relationship between the quality of the supplier, the performance of the machine and the specification to the consumer may be assessed.

Analisis Pemilihan Pemasok Kelapa Sawit yang Berkelanjutan dengan Menggunakan Metode PROMETHEE (Studi Kasus pada PT Perkebunan Nusantara III)

Suppliers are one of the business partners who play an important role in ensuring the availability of raw materials needed in production activities in a company. Companies in meeting the needs of raw materials in production activities of course conduct a selection of suppliers who can meet the supply of quality raw materials and on time in the delivery of goods. The purpose of this study is to develop a method of assessing the performance of palm oil suppliers that does not only look at economic criteria but also pays attention to sustainability factors, namely economic, social and environmental criteria in choosing the best supplier. The supplier performance assessment method aims to obtain the priority of the selected supplier by using the Multi Criteria Decision Making-PROMETHEE method. Assessment of supplier selection is carried out by filling out a questionnaire by two expert respondents, namely the Chief Engineer and Quality Assurance Assistant. This case study of sustainable supplier performance assessment was conducted in one of the state-owned companies engaged in plantation commodities, namely PT Perkebunan Nusantara III. Based on the type of decision-making using the PROMETHEE method, the suppliers selected and meeting the supplier performance assessment with sustainability criteria were UD. Satya Radja and UD. Meji Jaya suppliers with the highest Net Flow value of 0,1250.

An interval valued neutrosophic decision-making structure for sustainable supplier selection

Evolution of supply chain management (SCM) in recent years has transformed it beyond the simple logic of benefit and economic point of views. One of such key strategic elements in establishing a sustainable and socially responsive SCM is supplier selection and performance assessment. This study brings forward a sustainable supplier evaluation structure under multiple criteria and interval valued fuzzy neutrosophic (IVFN) model. The proposed structure uses CRiteria Importance Through Inter -criteriaCorrelation (CRITIC) and combined compromised solution (CoCoSo) under IVFN environment for evaluation and selection of suppliers for a dairy company in Iran. Alternative supplier 5 (S5) emerges as the best supplier with the highest overall score (1.168). Average Spearman rank correlation coefficient between the proposed model and other well established decision-making models methods is found as 0.9651 which establishes reliability of model outcomes. The estimated zero value of Gini Index indicates that supplier 5 has a constant ranking in all considered methods. This is a practical sustainable supplier selection platform which allows decision makers in procurement and SC industries to select the most suitable supplier in any pre-determined period.

Analisis Pemilihan Supplier Bahan Baku Roti dengan Metode ANP (Analytic Network Process) dan Rating Scale (Studi Kasus: Roti Gembong Kota Raja di Balikpapan)

Roti Gembong Kota Raja is a company engaged in the culinary field with a contemporary concept. Roti Gembong Kota Raja has the term "gembong" because of its puffed texture. The raw materials for producing this bread are wheat flour, sugar, salt, yeast, eggs, milk, butter, water, and others. This study aims to select the appropriate raw material suppliers for producing the bread. Assessment of supplier performance is for wheat flour and sugar. The wheat flour suppliers are suppliers "A", "B", and "C", while the suppliers for the sugar are suppliers "X", "Y", and. "Z". Data were collected through interviews and questionnaires distributed to the HRD of Roti Gembong Kota Raja. The obtained data were processed using the Analytic Network Process (ANP) method and Rating Scale methods. The ANP method can be used in decision making to calculate the weight of the criteria and sub-criteria of suppliers, while the Rating Scale method can be used to get the right order or priority of suppliers for wheat flour and sugar. There had 5 selected criteria and 18 sub-criteria in the selection of raw material suppliers for wheat flour and sugar. The results of data analysis using the ANP method showed the criteria weight that has the highest limit value on the raw materials of wheat flour and sugar, namely customer satisfaction. The results of the calculation of the final total performance of the wheat flour supplier with the Rating Scale showed that supplier B has the highest final performance score of 3.48162 with the high-performance category. Meanwhile, the final total performance of the sugar supplier showed that supplier X has the highest final performance score of 3.55081 with the high-performance category.

IMPLEMENTASI METODE ANALYTICAL HIERARCHY PROCESS (AHP) DALAM PROSES PENILAIAN KINERJA PEMASOK

Supplier performance appraisal is an important decision in a company, because it will increase the company's competitiveness in the face of highly competitive business competition. PT. JQK is currently selecting suppliers who will supply mahogany wood raw materials with five suppliers, namely Manggala Jati, UD. Jati Mukti, “Mukti” Teak Wood Shop, Gunung Hijau, and Indah Sentosa. In this study, the best supplier performance assessment used the Analytical Hierarchy Process (AHP) method. This method is based on the concept of pairwise comparison for each existing hierarchy in the existing hierarchical structure. The criteria used in this selection are 3 criteria and 6 sub-criteria that support each criterion. The criteria that can be used for supplier performance assessment are time, quality, and price. Sub-criteria that can be used in evaluating supplier performance are on time delivery, lead time, specifications of raw materials, quantity of raw materials, purchase price of raw materials, and transportation costs. Based on calculations using the AHP method, the supplier with the best value is the “Indah Sentosa” supplier, whose value is 0.344 or 34.420%.

Design of The Performance Evaluation of Suppliers at UKM Weedang Uwuh Based on Multi Attribute Decision Making (MADM)

The development of small business is increasing with the presence of global competition. The current industrial ecology demands a continuous evaluation process to be able to survive and strive to improve quality products. Weeka Wedang Uwuh continuously improves its business system by paying attention to suppliers of raw materials. Supplier evaluation is carried out to guarantee sustainable quality and performance. Sustainable performance evaluation can produce good judgment if it is supported by a performance appraisal instrument. Supplier performance assessment will be useful to build a good and sustainable relationship between entrepreneurs and suppliers. The design of supplier performance evaluation is carried out using the QCDFR model approach namely, Quality, Cost, Delivery, Flexibility and Responsibility. The sub-criteria study that forms the QCDFR model is carried out using the interview method. QCDFR and Sub Criteria hereinafter referred to as KPI (Key Performance Indicator). KPI is an indicator of ongoing evaluation of the relationship between suppliers and entrepreneurs. The assessment of suppliers from entrepreneurs is carried out using the AHP approach which is able to show the weight of the entrepreneur's assessment of the ability of suppliers. The results of the Weeka Wedang Uwuh supplier performance evaluation model design results in a formulation to measure KPIs with criteria: quality of raw materials (size and condition of raw materials), ease of service (payment tolerance and information on availability and price changes, experience (average transaction value and average) average number of transactions), speed of response (changes in the amount and change in time and price of raw materials). Evaluation of the supplier's weight assessment for raw materials of ginger, sugar and sapphire resulted in the values of Mr. Sarno 0.501, Sugeng 0.709 and Mbak Wang 0.690. KPI measurement reinforces the results of the evaluation of weight assessment using AHP.

Integrated ANP and TOPSIS Method for Supplier Performance Assessment

A supplier has become one of the main factors that influence a company's supply chain activities. Supplier assessment is vital as suppliers have different performance. This study aims at assessing supplier performance using the integration of ANP and TOPSIS methods. Supplier performance assessment was based on supplier criteria indicators. The weighting criteria used ANP was used to determine the most significant influence criteria of supplier performance. Furthermore, TOPSIS was also employed to obtain supplier preference. Eight criteria and twenty-five sub-criteria were used for the supplier performance assessment. The three highest sub-criteria were specification of quality, the flexibility of order changes, and production capacity. The priority results for suppliers were sorted from the highest to lowest ratio values.

Using AHP for Supplier Performance Assessment: A Case Study of SME in West Java

Using AHP for Supplier Performance Assessment: A Case Study of SME in West Java

Supplier performance assessment

PurposeThe discussion of supplier performance assessment and implementation challenges has been evidenced well in the academic literature. However, the analysis of supplier performance assessment has been limited in terms of inclusion of suppliers’ perspective, especially in terms of what key performance indicators they deem to be relevant and aligned with their goals. Therefore, the purpose of this paper is to shed light on supplier performance assessment, taking into account both manufacturing company’s and suppliers’ perspective, to evaluate to what extent the utilised performance measures are beneficial to all parties.Design/methodology/approachBased on literature review on supplier performance assessment, ten categories of performance measures were established and explored in a case study involving a UK manufacturing company and its suppliers. A questionnaire was distributed to the manufacturing company and their 30 suppliers, resulting with a total of 41 responses.FindingsFrom the established ten categories only five categories were highly rated which were: net profits, flexibility and responsiveness, delivery performance and time and cycle time, product quality and availability, which were aligned to financial and internal business process categories.Research limitations/implicationsThis study focused on a UK-based company and its relationship with its suppliers and how performance measures were assessed within this context. A further study needs to be conducted in terms of comparing the results of the study to other companies’ supplier performance assessment.Originality/valueThe research on the topic of supplier performance assessment often relates to measurement and highlights measures for assessing suppliers’ performance to a particular industry or area of performance measurement. Hence, this study embeds three distinctive angles including the academic literature on supplier performance assessment, suppliers’ and the manufacturing company’s perspectives.

Design for Supplier Performance Assessment Model of Information Technology Service Provider in Small Medium Enterprises in Indonesia

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.

Implementation of supply chain management in supplier performance assessment using Analytical Hierarchy Process (AHP) Objective Matrix (OMAX) and Traffic Light System

This study focuses on researching the implementation of supply chain management in supplier performance measurement using Analytical Hierarchy Process (AHP) Objective Matrix (OMAX) and Traffic Light System. The method used consisted of several stages: Identification stage of criteria variable and subcriteria variable, designing hierarchy AHP structure, calculating the weight of each criterion and subcriteria, supplier performance appraisal using OMAX method, calculating the total value of each supplier perfomance and identifying the performance of each supplier Using color indicator from Traffic Light System. Based on the results of the research, it can be seen that 9 out of 10 suppliers that are considered have a good performance while 1 supplier has a performance under the target.

Selection of Raw Material Suppliers Using Analytical Hierarchy Process in Food and Beverage Company, South Jakarta

The purpose of this research was to see the selection of raw material suppliers as an assessment of supplier performance. Data were obtained from the results of assessment of the experts in food and beverage company in South Jakarta. The rate selection of suppliers was based on several criteria. There was the suitability in some products with the demand for tolerance of 10% about mismatch delivery, 10% of the accuracy of the product delivery, 5% of products quality, 5% of product prices, 5% of the easiness of information or data, and 10% of the problem-solving action. The results show that 40% of suppliers get a warning letter regarding their performance from January to June 2016, 20% of suppliers have already gotten a reprimand directly from the company, 20% of suppliers have been deactivated from the list of suppliers, because they cannot meet the target value which equals to 4,05, only 20% of the supplier can maintain its performance.

A influência das avaliações de fornecedores na rescisão de contratos de serviços de exploração e produção de petróleo e gás no Brasil

A literatura de avaliação de desempenho de fornecedores aponta que a prévia identificação de contratos considerados insatisfatórios pode se revelar crucial para a manutenção de uma empresa, especialmente em setores com alto risco operacional, ambiental e com investimentos significativos, como é o caso do setor de exploração de petróleo e gás. Embora considerada importante, a rescisão contratual tem sido pouco estudada no segmento de petróleo brasileiro, em decorrência do baixo número de firmas que atuam no setor e da restrição de acessos às informações dessas empresas. O presente artigo tem como objetivo diminuir essa lacuna ao analisar quais critérios de avaliação de serviços mais influenciam as rescisões contratuais no setor brasileiro de exploração e produção de petróleo e gás. Para tanto, foram analisadas, via regressões logit, as avaliações dos contratos de serviços encerrados no período de 1/1/2006 a 31/12/2014 por uma unidade de negócio que atua na exploração e produção de petróleo e gás localizada no Brasil. No banco de dados resultante, constaram-se 273 contratos que contemplam todas as especialidades de serviços da atividade, com um total de 19.613 avaliações. Os resultados indicam que os critérios Prazo e Logística são os que apresentam maior influência nas rescisões contratuais das atividades do setor. Além disso, ao segregar-se as análises por especialidades, verificou-se que diferentes especialidades possuem demandas distintas e, por conseguinte, diferentes modelos contratuais. Tais resultados corroboram empiricamente as discussões teóricas presentes na literatura acerca da importância do cumprimento das obrigações contratuais, especialmente com relação aos prazos negociados.

The influence of information sharing, supplier trust and supplier synergy on supplier performance: The case of small and medium enterprises

Background: The assessment of supplier performance is an important activity for small to medium enterprises (SMEs) as they adopt and implement plans and policies aimed at enhancing their performance in order to achieve sustainable competitive advantages.Objectives: The purpose of this study was to examine the influence of information sharing, supplier trust and supplier synergy on supplier performance in SMEs.Method: A quantitative research design was adopted in which a survey questionnaire was administered to a sample of 309 owners and managers of SMEs based in southern Gauteng, South Africa. A confirmatory factor analysis was undertaken to assess the properties of the measurement scale. Hypotheses were tested using the path modelling technique.Results: Information sharing exerted a moderate positive and significant influence on supplier trust and a weak but sigificant influence on supplier synergy. Supplier synergy had a strong positive and significant influence on supplier performance. However, the influence of supplier trust on supplier performance was weak and insignificant.Conclusion: The study provides a useful framework for analysing the interplay between information sharing, supplier trust, supplier synergy and supplier performance in SMEs.

Green supplier appraisement in fuzzy environment

Purpose – In recent years, stimulated environmental awareness (green consciousness) has favored the emergence of the green supply chain paradigm. Therefore, apart from traditional supplier selection criterions, green criteria are necessarily to be incorporated in the supplier selection problem. In this context, the present study aims to highlight an efficient supplier appraisement platform by considering green performance criteria, in fuzzy environment. Design/methodology/approach – The present work exhibits an efficient fuzzy-based supplier performance assessment system using generalized trapezoidal fuzzy numbers set. A fuzzy overall evaluation index has been estimated towards assessing suppliers' green performance extent, thus facilitating supplier appraisement cum selection decision-making. Findings – The proposed method has been found efficient for solving the group decision-making problem under uncertain environment due to vagueness, ambiguity associated with decision-makers' subjective judgment. The proposed appraisement platform has been explored by an Indian automobile part manufacturing company at eastern part of India. Suppliers have been evaluated individually to check their performance level with respect to green attributes. Apart from estimating overall performance metric, the model presented here can identify ill-performing areas that necessitate future attention. Originality/value – The major contributions of this work have been summarized as follows: Development and implementation of an efficient decision-making procedural hierarchy to support suppliers' green performance extent evaluation. An overall performance metric has been introduced. Concept of generalized trapezoidal fuzzy numbers has been efficiently explored to facilitate such an appraisement cum selection decision-making. The appraisement index system has been extended with the capability to search ill-performing areas that require future progress.

Using the SCOR model’s performance measurements to improve construction logistics

In this paper, construction material supplier and construction site performance are assessed according to the supply chain operations reference (SCOR) model. Current applicable literature focuses mainly on assessing the main contractor’s ability to construct a building according to customer requirements, i.e. construction performance. Omitting supplier performance when evaluating construction performance reduces the ability to improve the construction supply chain, as reasons for cost and time overruns and quality deficiencies will often be overlooked. In this paper, the SCOR metrics perfect order fulfilment (POF), source cycle time (SCT) and cost to source (CS) are measured to assess construction supplier reliability and construction site responsiveness. The values for POF, SCT and CS are measured to be 38%, 134 min and EUR 249, respectively. The practical implications are summarised in five improvement suggestions concerning communication, predefined material allocation, supplier performance assessment, delivery verification and notification and use of the SCOR model.

Applying the Linguistic Strategy-Oriented Aggregation Approach to Determine the Supplier Performance with Ordinal and Cardinal Data Forms

Supply chain management is a new and evolving paradigm for enterprises to cope with international competition and to improve global logistics efficiency. The suppliers’ performances affect not only supply chain execution results but also the profit capability and business survivability. However, suppliers’ performance assessment always involves a large dimension of supplier behaviors. Information on supplier behaviors is often difficult to be accurately demonstrated as quantitative data. For this reason, the study employs a 2-tuple linguistic variable to perform the initial evaluation and final assessment while keeping track of both linguistic information and data, which can avoid a tied result. Additionally, the modified linguistic ordered weighted averaging (M-LOWA) operator with maximum entropy is used to derive the maximum aggregation value under the current business strategy to reflect on the criteria. The focal company can then rapidly rely on the assessment results to represent the performance of suppliers and provide integrated information to decision makers. This study draws the complete framework for the issue of supplier performance assessment without limitations on categories of variables and scales.

Applying 2-Tuple Multigranularity Linguistic Variables to Determine the Supply Performance in Dynamic Environment Based on Product-Oriented Strategy

Supply performance assessment is not only the core mechanism for supplier management, but also the major task for enterprises in implementing supply chain management. Consequently, supply chain system implementation should rely on the results of supply performance assessments to supervise suppliers. However, supply performance assessment is always concerned with numerous supply behaviors, and the information obtained from these supply behaviors often varies during the measurement timeframe. Because of uncertainty and inaccuracy, the numerical data are not appropriate for demonstrating dynamic information. This study employs 2-tuple multigranularity linguistic variables to deal with dynamic information appropriately and assess supply performance, and even permits decision makers to introduce different linguistic terms (linguistic scale) based on consideration of supply behavior characteristics. The 2-tuple multigranularity linguistic variables present the information via linguistic and numeric results, both where the linguistic result could express the variation of dynamic information appropriately, and where the numerical result could further reflect the difference based on the same linguistic result to improve the sensitivity. Additionally, this study also employs a fuzzy linguistic quantifier to simulate the decision criteria based on the product strategy to further obtain the modified linguistic ordered weighted averaging operator with maximum entropy that will be exercised to aggregate the 2-tuple linguistic information. This investigation provides decision makers with rapid access to complete, and integrated information on the practical supply performance of suppliers as appropriate.