Track: Supply Chain Management

Abstract

Based on prior research, it was found that only a limited number of studies have addressed approaches for enhancing procurement management involving the selection of factory and warehouse construction contractors, along with the control of contractor construction efficiency. Furthermore, the decision-making process in contractor selection was frequently delegated to the procurement department or an individual within the department, potentially introducing personal biases. Consequently, contractors who submitted the lowest bids often secured projects, particularly in fiercely competitive industries. Relying primarily on cost-based decisions may lead to the selection of less qualified and less suitable contractors. This research aims to provide relevant criteria for selecting main contractors for factory and warehouse construction projects with areas greater than 10,000 square meters (sq.m). This is to reduce the risk of low-quality work or construction job abandonment. To not based purely on cost, supplier selection process is a Multi-Criteria Decision Making (MCDM) process. The proposed evaluation criteria are analyzed using Analytic Hierarchy Process (AHP) technique, data were collected from seventeen experienced experts in the field of factory and warehouse construction contractor selection to ensure result reliability. It was found that the decision-makers gave the past and present performance of the construction contractor performance factor as the first priority with a relative weight of 0.32. This is followed by operational technique at 0.19, staff at 0.18, financial at 0.17, and lastly, partner relationship at relative weight of 0.16. The relative importance weights were later used in a large-scale factory and warehouse contractor selection process as a case example. Using Conjunctive method with three inclusion criteria, five alternatives were shortlisted from a total of 40 companies. As a result, Company E received the highest score was chosen as the construction contractor of choice. The study also revealed that certain critical decision-making criteria, such as management expertise and technical proficiency, frequently lack sufficient available data, requiring the acquisition of this information directly from contractors. Therefore, it likely is inadequate for risk assessment and perhaps efficient scoring when selecting alternatives. Consequently, an end-to-end procurement risk management process is also proposed utilizing the top three relatively significant criteria to develop a tool for monitoring contractor performance during operations. Additionally, implementing a vendor checklist for their inclusion in the annual Supplier List is also recommended.