Finding the Best Third-Party Logistics in the Automobile Industry: A Hybrid Approach

Amir Karbassi Yazdi,Jorge Luis García Alcaraz,Thomas Hanne,Juan Carlos Osorio Gómez

doi:10.1155/2018/5251261

Abstract

Given the current economic climate, many companies are considering outsourcing some activities to reduce costs and to focus on their core competency; thus, by adopting a competency-focused approach they enhance their chances to survive in a growing and competitive market. Third-Party Logistics (3PL) is a system that facilitates logistic activities. First, however, the organizations need to assess which companies are suitable for outsourcing. The aim of this paper is to depict a structural system for 3PL selection and validate it in real-world automobile companies. We use the Delphi method to determine criteria for 3PL selection and apply Evaluation by an Area-based Method for Ranking (EAMR) to prioritize the candidate alternatives. This method is used in combination with a Shannon Entropy based approach for determining the required weights. Computational analysis shows which criteria and companies have high priority, and based on that candidate alternatives for outsourcing are evaluated. The results suggest how automobile companies select 3PL companies and allocate their work to them.

Highlights

Logistics and supply chain management issues have key roles in all organizations because these processes have a strong impact on both costs and customers’ satisfaction, which results in increased financial security, greater chances to avoid bankruptcy, and a stronger position in their markets
Using Third-Party Logistics (3PL) was an effective way to achieve this because businesses found other companies using logistics and supply chain management with better quality and at a lower cost, leaving them more resources and capital to focus on developing competencies and innovation
While the original Evaluation by an Area-based Method for Ranking (EAMR) method uses interval type2 fuzzy numbers for representing the alternatives according to considered criteria, we suggest using a novel simplified approach based on crisp numbers

Summary

Introduction

Logistics and supply chain management issues have key roles in all organizations because these processes have a strong impact on both costs and customers’ satisfaction, which results in increased financial security, greater chances to avoid bankruptcy, and a stronger position in their markets. Companies understand the increasing impact of these concepts on their competiveness. Logistics, and supply chain management date back to the ‘80s and ‘90s, when industries were trying to find innovative ways to reduce their costs. Using Third-Party Logistics (3PL) was an effective way to achieve this because businesses found other companies using logistics and supply chain management with better quality and at a lower cost, leaving them more resources and capital to focus on developing competencies and innovation. Outsourcing in the supply chain (SC) occurs in areas of inventory management, warehouse management, transportation, physical distribution, disposal production, etc. By freeing themselves from the burden of logistics, companies can turn their attention to core activities that allow them to be innovative and produce high quality goods at a competitive price [1]

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