Original Equipment Manufacturer (OEM) Site Selection of Traditional Medicine Companies in Indonesia using Analytic Hierarchy Process (AHP) Method

Abstract

Abstract OEM Selection is a unique selection methods, it’s a combination of site selection and supplier selection. This study aims to determine the best location of the Original Equipment Manufacturer (OEM) in traditional medicine companies in Indonesia using Analytic Hierarchy Process (AHP) method. The results showed that the factors that have the highest weight in determining OEM locations are availability of raw material, transportation access and labor cost. The combination of these factors indicates that the best location for OEM development is Central Java province. This study is useful to provide insight to traditional medicine companies in Indonesia regarding the importance of determining the location of OEMs to build competitive strategies in the face of competition from competitors.