The Ideal Criteria of Supplier Selection for SMEs Food Processing Industry

Abstract

Selection of good supplier is important to determine the performance and profitability of SMEs food processing industry. The lack of managerial capability on supplier selection in SMEs food processing industry affects the competitiveness of SMEs food processing industry. This research aims to determine the ideal criteria of supplier for food processing industry using Analytical Hierarchy Process (AHP). The research was carried out in a quantitative method by distributing questionnaires to 50 SMEs food processing industries. The collected data analysed using Expert Choice software to rank the supplier selection criteria. The result shows that criteria for supplier selection are ranked by cost, quality, service, delivery and management and organisation while purchase cost, audit result, defect analysis, transportation cost and fast responsiveness are the first five sub-criteria. The result of this research intends to improve managerial capabilities of SMEs food processing industry in supplier selection.