Supplier selection for EPCC Company of oil and gas industry

Abstract

In a highly competitive scenario, suppliers play a vital role in making a business organization successful. Organization’s ability to produce a quality product at a reasonable cost and in a timely manner is heavily influenced by its suppliers' capabilities. Business in Engineering, Procurement, Construction and Commissioning (EPCC) company of oil and gas company is continuous process and therefore the supplier selection is also dynamic in nature. This research investigates the supplier selection criteria based on the four categories; meet specification, cost, timeliness and company background for EPCC company of oil and gas supply chain. This research focused on the supply chain of Malaysia Marine and Heavy Engineering Sdn. Bhd. (MMHE), which is one of the largest EPCC company in Malaysia. The research involved 540 respondents from various departments in MMHE. SPSS version 21 is used to analyse the data through descriptive and correlation analysis between the supplier selection criteria. Based on the result, supplier selection criteria are ranked using the Analytical Hierarchy Process (AHP) method. Suppliers are then evaluated and compared with each other based on the supplier selection criteria using AHP again to make the optimal selection. A case study for supplier selection of repeat order products; rental services of welding equipment is conducted using the proposed AHP technique. The result of supplier selection is compared between the proposed method and MMHE's current practice.