APPLICATION OF MULTIVARIATE APPROACH IN DESIGNING SUPPLIER SELECTION FRAMEWORK: A JIT AUTOMOTIVE INDUSTRY CASE STUDY

Abstract

Supplier selection process is one of the important keys in supply chain management system of a company, especially JIT industry. Supplier is a long-term investment, which is crucial in sourcing process and can determine the performance of a company. Supplier selection method in PT. XYZ, a JIT automotive industry, has several problems within the process, which are only-cost criteria considered, high reject ratio of defect parts, and no supplier mapping for sourcing other potential candidates. The problems emerge due to improper process. Giving respond to the problems, a new designed and proposed framework considering all demands in sourcing process is needed to select the best potential supplier, which integrates multivariate approach. The multivariate approach utilizes factor analysis to reduce number of variables, conjoint analysis to understand respondents’ preferences, and multidimensional scaling to visually map the suppliers in a 2-dimensional map. This framework is applied to a case study in PT. XYZ. Form of questionnaires, interview, company data collection, and referencing are used to source and collect the data integrated in the Multivariate Approach. The result concludes that MET is selected as the best potential supplier in sourcing process of steel part case in PT. XYZ, as the integration result decision.