Supplier Selection Criteria in Oil and Gas Industry in

Indonesia
UTAMI RIANTI

Bevin Philip Pratama Makoenimau

(1606842120)
 Outline

Introduction Supplier Selection Method

▸ Literature Review ▸ MCDM
▸ Supply Chain Management ▸ MP
▸ Supplier Selection ▸ AI

Research Purpose Research Methodology Result and Discussion

1.
INTRODUCTION
SCM – Supplier Selection – Literature Review
 Supply Chain

Supply chain  the whole process involved directly or indirectly in

fulfilling customer demand

Supplier Manufacturer Retailer Customer

Supply Chain Management

A set of approaches to manage the integration of

various parties in the supply chain
 Supplier Selection

Supplier selection  One of the main focuses of supply chain

management. Most companies have to
spend considerable funds

Supplier of Goods
Supplier
Supplier of Services
 Literature Review

Supplier Selection is described as one of the most significant processes in the Purchasing and
Supply Management function
(Ghodsypour and O´Brien, 1998; Kaufmann et al., 2010)

Good suppliers can help manufacturers during the development of new products and
processes, with long-term quality improvements and cost reductions and can provide enhanced
delivery performance.
(Keith Goffin, Marek Szwejczewski and Colin New, 1997)

The supplier is the foundation of supply chain operation, and is key to the competitiveness of
the supply chain for a focal firm so it should be selected correctly
(Adida & DeMiguel, 2011; Azadi, Jafarian, Saen, & Mirhedayatian, 2015; Li, 2013; Rao, Zhao,
Zheng, Wang, & Chen, 2016)
Literature Review

Supplier Selection Literature

Methods for Supplier Selection Criteria in Supplier Selection

2.
RESEARCH PURPOSE
 Purpose

The objective of this study is

 To provide an illustration that out of many criterias in the supplier

selection process, there are 4 factors most noticed in the
selection of suppliers in the oil and gas industry in Indonesia.

 Facilitate further research related to supplier selection, especially

research using decision-making method based on multi criteria.
3.
SUPPLIER SELECTION METHODS
MCDM – MP – AI
MCDM (Multi Criteria Decision Method) Technique

Categories Techniques
Analytic Hierarchy Process (AHP)
Analytic Network Process (ANP)
Elimination and Choice Expressing Reality
(ELECTRE)
Preference Ranking Organization Method For
Enrichment Evaluation (PROMETHEE)
Technique For Order Performance By Similarity To
MCDM (Multi Criteria Decision Method) Techniques Ideal Solution (TOPSIS)
Simple Multi attribute Rating Technique (SMART)

Multi criteria Optimization And Compromise Solution

(VIKOR)
Decision Making Trial And Evaluation Laboratory
(DEMATEL)
MP (Mathematical Programming) Technique

Linear Programming (LP)

Non Linear Programming
MP (Mathematical Multi Objective Programming
Programming)
Techniques Goal Programming
Stochastic Programming
Data Envelopment Analysis (DEA)
AI (Artificial Inteligence ) Technique

Genetic Alghorithm (GA)

Neural Networks (NN)
Case Based Reasoning (CBR)
Grey System Theory (GST)
Artificial Intelligence (AI) Techniques
Particle Swarm Optimization (PSO)
Rough Set Theory (RST)
Decision Tree
Bayesian Network (BN)
4.
RESEARCH METHODOLOGY
Methodology

Literature Make a List of Interview

Review Criterias Experts
 Methodology - Literature Review

An important role in this study, because this step will be used to look for
factors or criteria that are considered influential in previous research.

A study conducted by Dickson in 1966 has made a list consist of 23

influential criterias in the supplier selection process

There are several studies with a supplier selection theme that uses
Dickson's research to determine research’s criteria
 Methodology – List of Criterias

▸Quality ▸Compliance ▸Attitude

▸Delivery Process ▸Communication System ▸Impression
▸Performance history ▸ Reputation and position in ▸Packaging Ability
▸Warranty industry ▸Labor relations record
▸ Facility and Capacity ▸Desire for Business ▸Geographic Location
Production ▸Management and Organisation ▸Amount of business
▸Price system ▸Training Aid
▸Technical Capabilities ▸Operating control ▸Future purchase
▸Financial Condition. ▸Repair service
Methodology – Interview the Experts

 Semi-structured Interview
 9 Experts from 3 Companies and 1 Government Institution
Experts Company/Organisation Experience
Mr. A Government Institution 15 Years
Mr. B Government Institution 10 Years
Mr. C State-Owned Oil & Gas Company 25 Years
Mr. D State-Owned Oil & Gas Company 29 Years
Ms. E Foreign Oil and Gas Company 5 Years
Mr. F Foreign Oil and Gas Company 5 Years
Ms. G Private Oil and Gas Company 6 Years
Mr. H Private Oil and Gas Company 5 Years
Mr. I State-Owned Oil & Gas Company 11 Years
5.
RESULT AND DISCUSSION
 Questions That Asked To Experts

The questions listed as follows:

▸ Does your company have a specific method applied in supplier selection?

▸ What criteria or factors are considered influential in the selection of suppliers in

your company?

▸ Do you think there are different factors that influence the process of choosing a
supplier of goods with the process of selecting a supplier service?
 Results

The answers of interview can be concluded

 The procurement method undertaken by each company is not significantly

different because it still refers to government regulations.
 The method of procurement usually begins with technical qualifications and
ends with a tender process of offering price.
 The criterias that should be considered is Quality, Price, Delivery, and
Performance

.
“
Some experts refer to the purchasing regulation from
government in oil & gas industry, PTK-
007/SKKMA0000/2017/S0, which often prioritizes
QPD (Quality, Price, Deivery) in the procurement
process
THANKS!
Any questions?