EVALUATION OF USER PRIORITY IN SELECTION OF READY MIXED CONCRETE SUPPLIERS IN LOMBOK-INDONESIA USING AHP METHOD

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1 International Journal of Civil Engineering and Technology (IJCIET) Volume 9, Issue 6, June 2018, pp , Article ID: IJCIET_09_06_072 Available online at ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed EVALUATION OF USER PRIORITY IN SELECTION OF READY MIXED CONCRETE SUPPLIERS IN LOMBOK-INDONESIA USING AHP METHOD Suherman *, Hariyadi and B. Anshari Postgraduate Study Program of Civil Engineering, University of Mataram, Jl. Majapahit no. 62, Mataram, NTB, 83125, Indonesia * ABSTRACT The selection of appropriate ready mix concrete suppliers is one of the important things in purchasing activity for the construction contractor. However, the selection of ready mix concrete suppliers is a multi-criteria problem that includes both quantitative and qualitative factors. One method that can be used for supplier selection is the AHP (Analytical Hierarchy Process) method. The research was conducted on a contractor company, PT Utama Beton Perkasa (UBP), which will develop partnerships with several ready mixed concrete suppliers. The problems that will be discussed in this research are (1) the priority order of criteria and subcriteria in supplier selection at PT Utama Beton Perkasa (UBP); (2) supplier selection which should be chosen by PT Utama Beton Perkasa (UBP) based on AHP method. Respondents of this study are decision makers and parties within the purchasing and warehouse departments who know the performance of suppliers. The evaluation results showed that the importance of criteria in the selection of ready mixed concrete suppliers produce the following priority scale: first priority is quality (0.486), second priority is price (0.277), third priority is service (0,091), and accuracy of delivery and accuracy of volume the same priority scale is (0,073). Based on the assessment results of the alternative importance level in the selection of ready mixed concrete supplier, it produces the following priority scale: first priority is supplier X (0.467), second priority is supplier Z (0.336), third priority is supplier Y (0.198). Based on the analysis, ready mixed concrete user can be suggested developing partnership with supplier X since it has the highest overall score. Key words: ready mixed concrete, supplier selection, Analytical Hierarchy Process (AHP). Cite this Article: Suherman, Hariyadi and B. Anshari, Evaluation of User Priority in Selection of Ready Mixed Concrete Suppliers in Lombok-Indonesia Using AHP Method, International Journal of Civil Engineering and Technology, 9(6), 2018, pp editor@iaeme.com

2 Suherman, Hariyadi and B. Anshari 1. INTRODUCTION Fresh concrete industry or well be known as ready mixed concrete industry is an industry served the fresh ready-mixed concrete. The development of the construction business in the province of West Nusa Tenggara is now increasing rapidly. This can be seen from the increasing number of new buildings, such as housing, offices, shops, and other buildings. The development of the construction business in Lombok-Indonesia will open many opportunities for entrepreneurs in the field of construction services. Implementation of ready mixed concrete production can not be separated from a plan that aims to determine the amount of concrete to be produced in annual, monthly and daily. Increasing the demand for ready mixed concrete causes many investors interested to invest in this business. Ready Mixed Concrete is a concrete produced in a processed concrete factory or batching plant. Ready mix is mostly chosen by medium-scale projects to the big-scale projects, because of mixed accuracy and faster application time when compared with the mixing manually. The quality of ready mixed concrete in accordance with its function consists of several kinds of quality class of concrete, including: quality K80, K100, K125, K150, K175, K200, K325, K350, K375, K400, K425, K350, K375, K400, K425, K450, K475, K500. The quality of the concrete can be achieved by determining the appropriate mixture of ready mixed concrete. In industrial sector, the selection of appropriate ready mix concrete suppliers is one of the important things in purchasing activity for the construction contractor. However, the selection of ready mix concrete suppliers is a multi-criteria problem that includes both quantitative and qualitative factors. One method that can be used for supplier selection is the AHP (Analytical Hierarchy Process) method [1]. 2. RESEARCH METHOD 2.1. Location of Research This research takes place in Lombok Island, for primary data obtained through spreading of questionnaire. Secondary data about contractor data and other supporting data are obtained from governmental institutions and budget user. Research is designed and planned so that the process is directed and the results of research become valid, objective, efficient, and effective [2]. The research is case study design. Case studies include an in-depth and contextual analysis of similar situations in other organizations, where the nature and definition of problems that occur are similar to those experienced in the current situation [3]. This research was conducted on a contractor company, PT Utama Beton Perkasa (UBP). The object studied is the evaluation of user satisfaction in determining the supplier ready mixed concrete Method of Collecting Data Questionnaire. The questionnaire contains a list of formulated written questions that respondents will answer, usually in clearly defined alternatives [3]. The form of questionnaires used in this study refers to a sample questionnaire in [4]. While the items that are compared in the questionnaire are criteria, subcriteria, and alternatives used in the selection of PT Utama Beton Perkasa (UBP). The questionnaire was distributed to the respondents. Interview. Interviews are a technique of data collection by asking direct questions by the interviewer to the company, local government, associations, and community. Respondents' answers are written or recorded. Interviews used in this study are structured interviews. Structured interviews are interviews where the interviewer has a list of questions addressed to the respondent. Structured interviews are used in preliminary interviews to determine the variables to be used in the research that determine the criteria and subcriteria used in the selection of ready mixed concrete editor@iaeme.com

3 Evaluation of User Priority in Selection of Ready Mixed Concrete Suppliers in Lombok-Indonesia Using AHP Method Literature Studies. The data obtained from the questionnaire will be processed by Analytical Hierarchy Process (AHP). In this research the scoring is taken 5 scale assessment, that is very important, more important, equally important, less important, and not important (Table 1) Table 1 Scoring Scale of Important Level [5] No Important Level Score 1 equally important 1 2 slightly more important 3 3 more important 5 4 very important 7 5 absolutely very important Data Analysis Method The steps in selecting ready mixed concrete are shown in Figure 1. Selecting Ready Mixed Concrete Price Quality Services Delivery accuracy Volume accuracy P1 Q1 S1 D1 P2 Q2 S2 D2 Q3 S3 S4 Ready Mix X Ready Mix Y Ready Mix Z Figure 1 Hierarchy Structure of Problem [6],[7] 3. RESULT AND DISCUSSION Based on the results of AHP analysis, the most influential criteria in selecting ready mixed concrete at PT Utama Beton Perkasa (UBP) is the quality criterion with the score of The next criterion that influences is the price criteria with a score of 0.277, service criteria with a score of 0.091, as well as the criteria of accuracy of delivery and accuracy of volume with the same score of With the high value of quality score in the selection of ready editor@iaeme.com

4 Suherman, Hariyadi and B. Anshari mixed concrete shows that PT Utama Beton Perkasa (UBP) prioritizes high quality for raw materials to be used. This is because good quality raw materials will affect the quality of the final product. Conversely, the use of less quality raw materials will decrease the quality of the final product. The quality criteria used in this study include three subcriteria, namely the conformity of goods with the specified specification (Q1), the provision of goods without any deficiencies (Q2), as well as the ability to provide consistent quality (Q3). From the three subcriteria, the subcriteria for the provision of goods without any deficiencies (score 0.466) is considered most important by respondents. Next is the subcriteria of the ability to provide consistent quality (score 0.305), and the last subcriteria is the subcriteria of conformity of the goods with the specified specification (score 0.229). In the subcriteria of providing good quality goods, ready mix X is considered the best by the respondents with a score of Next ready mix Y has a score of and ready mix Z has a score of Ready mix X is considered never to send ready mix (eg less homogeneous concrete) to the customer, while ready mix product from ready mix Y and Z which is sent to customer sometimes still found the lack of homogeneous mixture of concrete. In the subcriteria the ability to provide consistent quality, ready mix X is also rated best by the respondents with a score of Next ready mix Z has a score of 0.389, and ready mix Y has a score of In the subcriteria of conformity of goods with the specified specifications, ready mix Z occupies the top sequence (score 0.455), then ready mix Y and ready mix X successively with a score of and On the overall quality criteria, ready mix X occupies the first priority with a score of 0.479, while the second priority is ready mix Z with a score of While the last priority is ready mix Y with a score of This indicates that if the user wants to choose a supplier based on quality criteria only, then the ready mix chosen is ready mix X because ready mix X is the best ready mix on this criteria. Based on this criterion, the company can take raw materials from ready mix X for the needs that require high quality, for example beams, plates and columns. If the company is concerned with quality criteria, then other criteria such as price, service, accuracy of volume and accuracy of delivery are not so noticed or considered. The price as the second criteria in the selection of ready mix (score 0.277) has an important role because raw material purchase represents a substantial portion of the value of sales of the final product. The competitive price is an important critria in the ready mixed concrete industries. With cheaper raw material prices, it is expected that the company can reduce the cost of raw materials so as to increase their profits. Price criteria in this study include two subcriteria that are price appropriateness with the quality of goods produced (P1) and ability to give discounts (P2). From the two subcriteria, the subcriterion of price appropriateness with the quality of goods produced has a higher score of 0.633, while the subcriteria ability to give discounts on orders in a certain amount has a score of In the subcriteria of appropriateness of price with quality (P1), ready mix X is the most ready of these subcriteria with a score of Next ready mix Y and ready mix Z have the same score value is While on the subcriteria the ability to give discount (P2), ready mix Z most meet this subcriteria with a score of The next priority on these subcriteria is ready mix X with a score of 0.321, then ready mix Y as the last priority with a score of editor@iaeme.com

5 Evaluation of User Priority in Selection of Ready Mixed Concrete Suppliers in Lombok-Indonesia Using AHP Method On the overall price criteria, the best ready mix on consecutive price criteria is ready mix X (score 0.490), ready mix Z (score 0.329), and last ready mix Y (score 0.181). This shows that if the company in choosing a ready mix based only on the price criteria then the ready mix chosen is ready mix X. The company usually take from ready mix X for raw materials need good quality eg for the concrete plate requires a strong beam, although with a fairly expensive price but the price is proportional to the quality obtained. If the company wants a cheaper price with a considerable discount, the company can pick up the material from ready mix Z because ready mix Z offers a considerable discount. From ready mix Z, the company can take ready mix for middle quality commonly used for column and beam. The service criterion ranks third in the selection of ready mix suppliers with a score of In this research, there are four subcriteria on service criteria, ease to be contacted (S1), ability to give information clearly and easily understood (S2), speed in response to customer request (S3), quick response to solve customer complaint (S4). The S4 subcriterion is considered most important with a score of Further subcriteria S3 (score 0.310), subcriteria S1 (score 0.204), and the last is subcriteria S2 (score 0.076). In the subcriteria of ease to be contacted (S1), ready mix X has the first priority to be selected with a score of The second priority is ready mix Y with a score of While ready mix Z occupy the third priority with a score of In the subcriteria the ability to provide information clearly and easily understood (S2), the first priority to choose is ready mix X with a score of The second priority is ready mix Z with a score of Whereas ready mix Y occupies the last priority to be selected based on this subcriteria with a score of In the quick response subcriteria in solving customer complaints (S4), ready mix X is the first ready mix priority to be selected based on this subcriteria with a score of Next the second satisfaction priority is ready mix Z with a score of 0.259, and the last priority is ready mix Y with a score of On the overall service criteria, ready mix X with score of is the best ready mix, next is ready mix Z with score 0,334, and the last ready mix Y with score 0,251. These results indicate if the company chooses a ready mix based on service criteria only, and ignores the other criteria then ready mix selected by the user is ready mix X. The criterion of delivery accuracy has the same score with the precision criteria amount of On the delivery accuracy criteria there are two subcriteria that is ability to deliver goods according to agreed date (D1) with score 0,739, and ability in handling transportation system (D2) with score 0,261. On subcriteria the ability to deliver the goods according to the agreedupon date (D1) ready mix Z with a score of is the first priority to be selected. While ready mix X with a score of is the second priority, and ready mix Y with a score of is the last priority. Meanwhile, in the subcriteria of ability in handling transportation system (D2), ready mix Y with score of is the first satisfaction priority to be selected. While the second priority of satisfaction is ready mix Z with a score of 0.323, and the final satisfaction priority is ready mix X with a score of On the criteria of delivery accuracy, the best ready mix is ready mix Z (score 0,502), then ready mix X (score 0,274), and if choosing ready mix which only based on the criteria of accurate delivery volume only, then company will choose ready mix Z as its supplier, because ready mix Z is best based on this criteria. However, if the company wants to take the materials from the ready mix X that the low accuracy of delivery, companies can get around by taking their own goods to the ready mix location. The best mixed ready on the volume precision criteria is a ready mix X with a score of Next is ready mix Z with a score of 0.282, and the last ready mix Y with a score of These results indicate that if the company in editor@iaeme.com

6 Suherman, Hariyadi and B. Anshari selecting suppliers based solely on criteria of amount accuracy the suppliers selected is ready mix company X. The company can take materials from ready mix X for purposes of materials requiring precise specifications, such as size. Overall, based on the criteria and subcriteria in supplier selection, ready mix X is rated as the best supplier with a score of Next is ready mix Z with a score of and ready mix Y with a score of These results indicate that overall the best ready mix that will be chosen by the user to serve as a long-term partner is ready mix X because this ready mix company has the highest score compared to the other two ready mix suppliers. 4. CONCLUSIONS Based on the results of analysis and evaluation, it can be concluded that: The most influential criteria in the selection of ready mix at PT Utama Beton Perkasa (UBP) is the quality criteria by providing the highest value of satisfaction. The second priority that influences is the price criteria. The third priority is the service criteria, while the fourth and fifth priorities are the delivery accuracy and volume precision. The global priority of subcriteria in the selection of ready mix suppliers successively from first priority to the last priority are as follows: the subcriteria of providing goods without any deficiencies (Q2) by providing the highest value of satisfaction; subcriteria of priceiness with the quality of the goods produced (P1) with the second satisfaction value; subcriteria ability to provide consistent quality (Q3) with third satisfaction value; subcriteria of conformity of goods to the specified specification (Q1) with the fourth satisfaction value; subcriteria ability to provide discount (P2) with the fifth satisfaction value; subcriteria the ability to deliver the goods according to the agreed date (D1) with the sixth satisfaction value; fast response subcriteria resolve customer complaint (S4) with the seventh satisfaction value; speed subcriteria responding to customer demand (S3) with the eighth satisfaction value; the subcriteria of ease of contact (S1) with the ninth satisfaction; the subcriteria of the ability to handle the transport system (D2) with the tenth value of satisfaction; subcriteria ability to provide clear information (S2) with the eleventh satisfaction value. Priority order based on criteria is: a). Quality, ready mix X occupy the first priority with a score of 0.479, the second priority is ready mix Z with a score of and the last priority is ready mix Y with a score of 0.198; b). The best supplier on successive price criteria is ready mix X with score 0,490, ready mix Z with score 0,329, and last ready mix Y with score 0,181; c). For service criteria, ready mix X with score 0,415 is the best supplier, next is ready mix Z with score 0,334, and the last ready mix Y with score 0,251; d). On delivery criteria, the best supplier is ready mix Z with score 0,502, then ready mix X with score 0,274, and the last is ready mix Y with score 0,224; e). While based on the criteria of amount accuracy, the first priority is ready mix X with a score of 0.563, then is ready mix Z with a score of 0.282, and the last is ready mix supplier Y with a score of Based on the criteria and subcriteria in ready mix selection, overall ready mix X is rated as the best supplier with a score of The next priority is a ready mix Z with a score of and the last priority is ready mix Y with a score of This shows that overall the best ready mix supplier for ready mix user to serve as long-term partner is ready mix X because overall this supplier has the highest value compared to two other ready mix suppliers. REFERENCES [1] Surjasa, D., Astuti, P. and Nugroho, H., Usulan Supplier Selection Dengan Analytical Hierarchy Process Dan Penerapan Sistem Informasi Dengan konsep Vendor Managed Inventory Pada PT ABC, Available: editor@iaeme.com

7 Evaluation of User Priority in Selection of Ready Mixed Concrete Suppliers in Lombok-Indonesia Using AHP Method [2] Jogiyanto, H., Metodologi Penelitian Bisnis, Edisi , BPFE, Yogyakarta, [3] Sekaran, U., Metodologi Penelitian untuk Bisnis, Edisi 4, Buku 1 dan 2, Jakarta: Salemba Empat, [4] Saaty, T. L., Multi Criteria Decision Method: The Analitycal Hierarchy Process, University of Pittsburgh, [5] Teknomo, K., Analytic Hierarchy Process (AHP) Tutorial, Available: [6] Saaty, T. L., Using the Analitic Hierarchy Process to Structure the Supplier Selection Procedure. International Journal of Purchasing and Materials Management 28 (2), 1988, pp [7] Stock, J. R. and Douglas, L., Fundamentals of Decision Making and Priority Theory with the Analytic Hierarchy Process. RWS Publications: Pittsburgh USA, editor@iaeme.com