Logistics service provider selection decision making for healthcare industry based on a novel weighted density-based hierarchical clustering

Abstract

In recent years, Industry 4.0 makes a significant impact on the manufacturing industry, which enables the business more intelligent and efficient, all while minimizing costs. As known, the logistics concerns in the supply chain always play an important role to a manufacturing company, and decision on the selection of logistics service provider is a key point, especially for healthcare manufacture whose products are the medical devices or equipment of fragility and high cost. Practically there are so many logistics service providers with varieties in service quality, effectiveness, punctuality and reliability, that the manufacturers often encounter the challenge on the provider selection, and healthcare industry is no exception. However, the research on provider selection for healthcare manufacturers is quite limited. In order to help them to make the decision, this paper designs a logistics service provider selection scheme based on a novel weighted density-based hierarchical cluster analysis with integration of the analytic hierarchy process (AHP) for healthcare industry. Initially an evaluation index system reflecting the capability of the candidate providers in all aspects is established. To improve the clustering within the scheme, the density concept and the obtained weights are introduced into the traditional hierarchical cluster analysis (HCA) to shape a novel Weighted Density-Based HCA (WDBHCA). To validate the feasibility of the scheme, a case study on a specified healthcare industry manufacturer is carried out, and results fulfill the case company’s requirement which shows the feasibility of the proposed provider selection scheme. In addition, this scheme can be applied to the provider selection in other fields, as well.