Designing Supplier Performance Criteria with a Risk-Oriented Approach

Suppliers are part of a company's supply chain. Supplier performance evaluation needs to be carried out by the company continuously because it affects the company's performance. Decisions involving suppliers are increasingly strategic and risky. Supplier selection is one of the basic strategies for developing output quality in each business organization. The incompetence of suppliers to meet the needs of the company will cause losses, or even bankruptcy. Recent research explains that the main criteria for selecting suppliers, including cost, quality, delivery, flexibility, and risk. Many suppliers are experiencing problems and causing disruption to a company's business processes. Sustainability becomes important to see factors that encourage greater attention to the risks associated with the supply chain, which then becomes an effort to build a robust supply system that is able to withstand disruption. This study explains the design of supplier performance criteria in which there are risk criteria developed with a model related to supplier selection that is able to accommodate supplier-related risk management.