Evaluation of Third Party Logistics Providers Considering Social Sustainability

Hosang Jung

doi:10.3390/su9050777

Abstract

In this paper, we investigated a third-party logistics (3PL) provider evaluation problem considering social sustainability as one of the important evaluation criteria. Since the 3PL service is mainly dependent on both transport vehicles and employees, managing them from the viewpoint of social sustainability has become a critical issue. Thus, 3PL providers need to be concerned about not only the service price or quality but also issues related to social sustainability. In line with this trend, we defined the social sustainability of 3PL providers and related evaluation criteria. In addition, a fuzzy analytic hierarchy process (AHP) was used as a main evaluation framework to help decision-makers determine the relative importance of each criteria or alternative using linguistic terms. To show the feasibility of the proposed criteria and evaluation framework, we presented the illustrative example based on a real-world case. The results showed that the proposed approach could be a good alternative to conduct evaluations, and the related sensitivity analysis, considering social sustainability.

Highlights

A third-party logistics (3PL) provider is an external provider who manages, controls, and delivers logistics activities on behalf of a shipper [1]
According to Aguezzoul [7], the main multi-criteria decision-making (MCDM) methods used in the case of 3PL provider selection are: analytic hierarchy process (AHP) [14,38,39,40,41], analytic network process (ANP) [9,11,34,42,43], technique for order preference by similarity to ideal solution (TOPSIS) [10,39,44], interpretive structural model (ISM) [42,44,45], multi-criteria optimization and compromise solution (VIKOR) [43,46], decision-making trial and evaluation laboratory (DEMATEL) [34,43], quality function deployment (QFD) [35,37], elimination and choice expressing reality (ELECTRE) [47], and utility theory [47]
We addressed a 3PL provider evaluation problem considering traditional and social sustainability as one of the important evaluation criteria

Summary

Introduction

A third-party logistics (3PL) provider is an external provider who manages, controls, and delivers logistics activities on behalf of a shipper [1]. A 3PL provider collects outbound shipments from manufacturers and consolidates shipments in their distribution centers. The 3PL alliances between manufacturers and professional logistics providers can be found in many real-world cases [4,5,6]. The evaluation of the 3PL providers is a critical step for a manufacturer seeking to select an appropriate 3PL provider as a business partner. The firm (i.e., shipper) can determine the relative weights of the 3PL providers and allocate its transporting volumes to the selected 3PL provider who has a highest weight. A great deal of research on the 3PL provider evaluation has been conducted previously [8,9,10,11,12,13,14], and various evaluation criteria have been developed so far. According to the Pareto analysis of Aguezzoul [7], the most commonly used criteria are as follows: cost, relationship, services, quality, information/equipment system, flexibility (i.e., ability to adapt to changing customers’ requirements and circumstances), and delivery (i.e., on-time delivery performance)

Objectives

Results

Conclusion