Redesigning the vendor performance evaluation system in PT PLN (Persero)

Procurement of goods and services plays a strategic role in supporting operational efficiency and achieving corporate goals, particularly for PT PLN (Persero), Indonesia's largest state-owned enterprise in the electricity sector. However, the current vendor performance evaluation system remains suboptimal, lacking holistic, objective, and integrated assessments across business units. Issues such as inconsistent sub-criteria, subjective judgments, and fragmented evaluations hinder effective decision-making. This study aims to redesign PLN's vendor evaluation system using the Analytical Hierarchy Process (AHP) method. The framework was developed through literature review, internal documentation analysis, field observations, and expert-based Focus Group Discussions (FGDs). The proposed system introduces four main criteria, managerial, technical, administrative & financial, and safety, comprising a total of 14 weighted sub-criteria derived through AHP. A standardized evaluation form was created to operationalize the model. A real-world simulation was conducted across five PLN regional units using a consultancy vendor as a test case. Results show improved consistency, efficiency, and objectivity, with a holistic evaluation outcome. The redesigned system enables centralized vendor assessment, supports better decision-making, and lays the groundwork for integrated vendor data management. The findings are expected to serve as a reference for implementing a standardized vendor evaluation framework across PLN and to strengthen internal policy alignment supporting the new system.