Performance Evaluation of Subcontractors Using Weighted Sum Method through KPI Measurement Manuscript Received: 2 February 2023, Accepted: 26 February 2023, Published: 15 March 2023, ORCiD: 0000-0001-7995-8251,

Main Article Content

Richard Nico Lumanauw
Poh Kiat Ng
Adi Saptari
Isa Halim
Mohamad Toha
Yu Jin Ng


Key Performance Indicators (KPIs) help measure objectives critical to business sustainability. This research takes place in a toy factory’s injection moulding department that has yet to develop indicators for subcontractor performance. Poor subcontractor performance significantly impacts the injection moulding production. In the last three months, the delivered quantity exceeded the target by 27%, delivery time consistency is only 78%, there were 1.31% rejects, and inventory accuracy and material efficiency were 81% and 93% respectively. The objective of the study is to determine the KPI and develop an evaluation procedure for the injection moulding supplier and select the best supplier. Multi-criteria decision-making, i.e., weighted sum method, was used. Five employees were involved in determining the criteria weights. The evaluation was based on each supplier’s performance. A written KPI for the company's subcontractor and performance evaluation procedures were developed. There were six subcontractors of which subcontractor H received the highest score (78.42) and subcontractor G received the lowest score (69.42). The subcontractor performance needs to be improved in the future. In the interest of the company’s sustainability, it is recommended that this subcontractor performance evaluation be institutionalised to support subcontractor performance. Successful subcontractors support the business performance.

Article Details



J. Sarkis, "A Boundaries and Flows Perspective of Green Supply Chain Management," Supply Chain Management: An Int. J., vol. 17, no. 2, pp. 202-216, 2012.

S. Luthra, K. Govindan, D. Kannan, S. K. Mangla and C. P. Garg, "An Integrated Framework for Sustainable Supplier Selection and Evaluation in Supply Chains," J. of Cleaner Product., vol. 140, pp. 1686-1698, 2017.

M. A. Moktadir, S. M. Ali, S. Kusi-Sarpong and M. A. A. Shaikh, "Assessing Challenges for Implementing Industry 4.0: Implications for Process Safety and Environmental Protection," Process Safety and Environ. Protect., vol. 117, pp. 730-741, 2018.

S. A. Khan, S. Kusi-Sarpong, F. K. Arhin and H. Kusi-Sarpong, "Supplier Sustainability Performance Evaluation and Selection: A Framework and Methodology," J. of Cleaner Product., vol. 205, pp. 964-979, 2018.

B. S. Silvestre, M. S. Monteiro, F. L. E. Viana and J. M. de Sousa-Filho, "Challenges for Sustainable Supply Chain Management: When Stakeholder Collaboration Becomes Conducive to Corruption," J. of Cleaner Product., vol. 194, pp. 766-776, 2018.

K. C. Burning. (4 October 2022). What is a Delivery Schedule? Available:

D. A. Kshaf, M. A. Mohamed and K. M. El-Dash, "The Major Problems Between Main Contractors and Subcontractors in Construction Projects in Egypt," Ain Shams Eng. J., vol. 13, no. 6, pp. 101813, 2022.

J. Mbachu, "Conceptual Framework for The Assessment of Subcontractors' Eligibility and Performance in the Construction Industry," Construct. Manage. and Econ., vol. 26, no. 5, pp. 471-484, 2008.

E. D. Debelo and Z. B. Weldegebriel, "Effect of Contractor – Subcontractor Relationship on the Performance of Construction Project: A Case Study of Dire Dawa Construction Projects," American J. of Civil Eng., vol. 10, no. 2, pp. 31-42, 2022.

M. Mahsun, Pengukuran Kinerja Sektor Publik, 1st ed. Yogyakarta: BPFE, 2006.

I. Setiawan and H. H. Purba, "A Systematic Literature Review of Key Performance Indicators (KPIs) Implementation," J. of Indust. Eng. and Manage. Res., vol. 1, no. 3, pp. 200-208, 2020.

E. Worldaimi, "Perancangan Key Performance Indicator sebagai Dasar Alat Pengukuran Kinerja Menggunakan Metode Performance Prism," Master Thesis, Universitas Sebelas Maret, Indonesia, 2012.

M. Zheng, Y. Li, Z. Su, Y. V. Fan, P. Jiang, P. S. Varbanov and J. J. Klemeš, "Supplier Evaluation and Management Considering Greener Production in Manufacturing Industry," J. of Cleaner Product., vol. 342, pp. 130964, 2022.

P. N. T. Tran, M. Gorton and F. Lemke, "Buyers' Perspectives on Improving Performance and Curtailing Supplier Opportunism in Supplier Development: A Social Exchange Theory Approach," Indust. Market. Manage., vol. 106, pp. 183-196, 2022.

T. G. Hawkins, M. J. Gravier and W. A. Muir, "The Role of Supplier Performance Evaluations in Mitigating Risk: Assessing Evaluation Processes and Behaviors," Indust. Market. Manage., vol. 87, pp. 2-17, 2020.

E. Kanellou, K. Alexakis, P. Kapsalis, P. Kokkinakos and D. Askounis, "The DigiPrime KPIs’ Framework for A Circular Economy Transition in the Automotive Industry," Procedia Manufact., vol. 54, pp. 302-307, 2021.

H. Rivera-Gómez, A. Gharbi, J.-P. Kenné, O. Montaño-Arango and E. S. Hernández-Gress, "Subcontracting Strategies with Production and Maintenance Policies for A Manufacturing System Subject to Progressive Deterioration," Int. J. of Product. Econ., vol. 200, pp. 103-118, 2018.

J. Y. Shimizu and F. F. Cardoso, "Subcontracting and Cooperation Network in Building Construction: A Literature Review," in Proceed. IGLC-10, Brazil, 2002.

P. Pishdad-Bozorgi and J. H. Yoon, "Transformational Approach to Subcontractor Selection Using Blockchain-Enabled Smart Contract As Trust-Enhancing Technology," Automat. in Construct., vol. 142, pp. 104538, 2022.

M. Xue, C. Fu, N. P. Feng, G. Y. Lu, W. J. Chang and S. L. Yang, "Evaluation of Supplier Performance of High-Speed Train Based on Multi-Stage Multi-Criteria Decision-Making Method," Knowledge-Based Sys., vol. 162, pp. 238-251, 2018.

R. Basu, V. P. S. N. Nanyam and A. Sawhney, "A Multi-Dimensional Subcontractor Evaluation Framework for Nonconventional Housing Systems," Procedia Eng., vol. 196, pp. 253-261, 2017.

A. Olanrewaju, M. Z. X. Bong and C. Preece, "Establishment of Pre-Qualification Criteria for The Selection of Subcontractors by The Prime Constructors for Building Projects," J. of Building Eng., vol. 45, pp. 103644, 2022.

J. Rahardjo, R. Yustina and R. E. Stok, "Penerapan Multi-Criteria Decision Making dalam Pengambilan Keputusan Sistem Perawatan," Jurnal Teknik Industri, vol. 2, no. 1, pp. 1-12, 2000.

N. H. Zardari, Weighting Methods and Their Effects on Multi-Criteria Decision Making Model Outcomes in Water Resources Management, 1st Ed., Cham, Springer, 2014.

D. Stanujkic and E. K. Zavadskas, "A Modified Weighted Sum Method Based on the Decision-maker's Preffered Level of Performance," Studies in Inform. and Control, vol. 24, no. 4, pp. 461-470, 2015.

Siemens. (2022, 4 October 2022). Manufacturing Quality. Available:

D. C. Daniel, "Effects of Material Management on the Delivery of an Organisation," World J. of Innov. Res., vol. 6, no. 1, pp. 16-22, 2019.

Indian Institute of Materials Management. (4 October 2022). Materials management - Profit Centre. Available:

J. Klaess. (28 October 2021). 3 Definitions of Quality in Manufacturing and Why They Matter. Available:

R. B. Ballot, Materials Management: A Results Approach, 2nd ed. New York: American Management Association, 2006.

F. O. Florence, "Materials Management and Its Effect on the Performance of Manufacturing Sector: Evidence from Nigerian Cement Industry," South Asian J. of Social Studies and Econ., vol. 1, no. 4, pp. 1-9, 2018.

M. Crouch and H. McKenzie, "The Logic of Small Samples in Interview-Based Qualitative Research," Social Sci. Inform., vol. 45, no. 4, pp. 483-499, 2006.

D. F. Hernandez and A. Haddud, "Value Creation Via Supply Chain Risk Management in Global Fashion Organizations Outsourcing Production to China," J. of Global Operat. and Stra. Sourc., vol. 11, no. 2, pp. 250-272, 2018.

A. Bryman and E. Bell, Business Research Methods, 4th ed. New York: Oxford University Press, 2015.

K. K. S. Lam, "The Hong Kong Toy Industry – A Qualitative Study," Doctor of Business Administration Dissertation, University of Newcastle, Australia, 2015.

Z. Shen, D. Hou, P. Zhang, Y. Wang, Y. Zhang, P. Shi and D. O’Connor, "Lead-based Paint in Children's Toys Sold on China's Major Online Shopping Platforms," Environ. Pollut., vol. 241, pp. 311-318, 2018.

S. A. Nemati and D. Mangaladurai, "Impact of Enterprise Resource Planning in Supply Chain Management," Master Thesis, University College of Borås, Sweden, 2013.

J. Liu and Y. Wen, "Study of Competitiveness - A Case Study of DHL," Master Thesis, University of Gävle, Gävle, Sweden, 2012.

O. A. Akintan and R. Morledge, "Improving the Collaboration between Main Contractors and Subcontractors within Traditional Construction Procurement," J. of Construct. Eng., vol. 2013, pp. 281236, 2013.