Supplier Selection Method: A Case-study on a Car Seat Manufacturer in Thailand

The objective of this research is to develop a model for a case-study car seat manufacturer for evaluating steel pipe and steel sheet suppliers, known as raw material suppliers, by applying Analytic Hierarchy Process (AHP), and a model for selecting the suitable raw material supplier for each part. These models aim to maximize overall part makers’ satisfaction. The evaluators are chosen from purchasing management team from 10 part makers. These assessors will evaluate 8 raw material suppliers. This research is divided into 2 parts. The first part is the evaluation of raw material suppliers using Analytic Hierarchy Process. This part weights the importance of decision criteria complying with part makers’ satisfaction. The second part proposes a decision model for supplier selection using integer programming. The weight of each criterion from the first part will be considered along with raw material consumption to select the suitable raw material suppliers that maximize overall part makers’ satisfaction. The results from the first part of this study show that the most important criterion is cost which is about 41%. Quality, Delivery, Service, and Risk factors are 24%, 14%, 12% and 9%, respectively. The second part shows that the model can match material suppliers to part makers according to their preference. Comparing with current situation, the satisfaction is increased by 26% with this proposed model. It means that the proposed model can help increase satisfactions between car seat makers and their suppliers, which benefit the parts supplied to the case-study company.