Track: Decision Sciences

Abstract

The decision to select suppliers is a strategic issue in the pharmaceutical industry because of the tight regulations on the quality, safety and reliability of raw materials for the drug manufacturing process. Selection of suppliers of raw materials for the pharmaceutical industry needs to ensure conformity to the characteristics and profiles of suppliers with standard supplier criteria in the pharmaceutical industry. The purpose of this study is to evaluate the decision to select suppliers of raw materials to the pharmaceutical industry in Indonesia in the case of large volume parenterals or intravenous fluids. The Kraljic matrix is used to model the purchase portfolio of raw materials for intravenous fluids in the pharmaceutical industry, based on the dimensions of supply risk and company profitability. The decision framework for supplier selection using the MAUT method is designed for raw materials belonging to the strategic item quadrant by optimizing the criteria that are the main needs of the company according to the company's procurement strategy and business. The results of the study succeeded in mapping four strategic items from seven types of raw materials for intravenous fluids. The attribute in the supplier selection decision for raw materials for infusion fluids are grouped into five attributes, namely assurance of supply, quality & regulatory compliance, procurement cost, innovation/technical, and responsiveness & communication. Each attribute is elaborated into sub-attributes. By using the MAUT method, the ranking among suppliers was successfully carried out. The purchasing price and assurance of supply attribute differentiate between these three alternative suppliers, however, the first and second rankings meet the criteria to be continued in long-term cooperation because the quality of performance is above the company's minimum standards and still has the potential to improve its performance.