Apply the Analytic Hierarchy Process Method for Selecting Supplier in Automotive Business

Supakit Laksanasiri, Naprud Paisansin and Pornthep Anussornnitisarn
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Supakit Laksanasiri: Kasetsart University, Thailand
Naprud Paisansin: Kasetsart University, Thailand
Pornthep Anussornnitisarn: Kasetsart University, Thailand

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Abstract: In Thailand automotive industrial have many suppliers who have a capability to produce the components for car manufacturer. Supplier selection is an important process while trying to maintain long term relationships between automobile industry and part manufacture, suitable vendor chosen be select based on individual product characteristic. However, currently most of automobile factory emphasize on three criteria for supplier evaluations: cost, quality and delivery by given each criteria the same priority. This leads to a problem in shop floor where each product is used in different manner. The requirement on part performances is different among product. Therefore, it is better to find a way to identify priority among criteria or sub-criteria based on the operation requirement of each part. In this research, Japanese car manufacturer has been selected as a test case. Therefore, to be able to objectively evaluate supplier performance, the method need address and eliminate subjectively assessment. In this research, the analytic hierarchy process (AHP) method is applied to determine priority in selection suppliers with multiple criteria that’s related with the key factors like quality, cost and delivery which have been used for decision making of the main commodity category such as steel bracket, frame, suspension and chassis that are covering more than 90% of metal parts.

Keywords: analytic hierarchy process; supplier evaluation; supplier selection; multi-criteria evaluation (search for similar items in EconPapers)
Date: 2015
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