Supplier selection framework for dairy industry in Indonesia

Dairy market in Indonesia has good demand trends. However, the domestic supply is still below the consumption level. Thus, this country used to import dairy product rather than use the domestic one. On the other hand, dairy supply chain has its own uncertainty both in upstream and downstream process due to the durability of raw materials, such as tropical climate, unpredictable seasons, and lack of cold storage. It raises challenges for overland transportation. Selecting right supplier is one of the upstream area which affected the quality of dairy product and mitigate the supply chain risks. This study aims to develop a framework for supplier selection process. It determined main criteria through interview, pair wise comparison using AHP method, then deployed into some sub-criterias based, then been ranked. The result is a supplier selection assessment based on local company requirements. It can be concluded that the main criteria for supplier selection are quality, quantity, delivery, warranty, and pricing with sub main criteria which already deployed. The output could help most of the Indonesia dairy industries, which mostly small to medium scale, to achieve competitive advantages by solving one of the critical stages.