Purpose: The aim of this study is to select the best contract manufacturing strategy to ensure sustainable growth and fulfillment of MA baby food at PT. S.A.
Methods: This study used qualitative and quantitative research methods. The qualitative approach involves conducting interviews and forum group discussions (FGD) with Subject Matter Experts (SMEs) to determine the root cause of problems using Kapner Tragoe and Why Tree Diagram analysis and to determine the criteria and alternative solutions for this problem. The quantitative approach uses the Analytical Hierarchy Process (AHP) to select the best alternative solution.
Results: Using the AHP method, the most important criteria that could influence the decision-making process were schedule (32.95%), cost (30.31%), delivery (16.44%), capacity (8.66%), ability (6.79%), and quality (4.86%). The best alternative solution for the short term to resolve the business issue is “Produce in existing contract manufacturing and distribute using 3rd party trader (58,09%)”. This alternative solution will ensure fulfillment and prevent sales losses of 96 billion but with a trade-off of a 10% increase in costs. Meanwhile, the best alternative solutions for long term is “Terminate existing Manufacture & Produce in Alternative Local Contract Manufacture in Indonesia (31,55%)”. This alternative solution provides cost savings equivalent to 8.8% of the existing COGS and ensures sustainable growth and fulfillment of MA baby food at PT. S.A.