Logistics services outsourcing decision making: a literature review and research agenda

Abstract

Logistics plays important role in any firm’s supply chain. Outsourcing allows firms to focus on core business. Logistics outsourcing to third party logistics or logistics service providers (LSP) helps the companies to reduce costs, improve performance, sustainability, customer satisfaction and profitability. Logistics assessment and selection of LSP is a complex and important aspect of outsourcing decision. The purpose of this paper is to provide a review of logistics outsourcing literature to provide an insight to the trend, opportunities, criteria and techniques adopted in logistics outsourcing decision-making. This paper is based on literature review of 62 research articles published related to LSP evaluation and selection during 2010-2020. The analysis includes publications in journals, year, selection criteria and evaluation methods. It has been found that 44 major selection criteria have been used by different authors but most commonly used are: price, on-time delivery, service quality, reliability, flexibility, equipment and technology, customer relationship, while environmental and social criteria are rarely adopted. It is also observed that multi criteria decision making (MCDM) methods have been adopted by majority of researchers wherein Analytic Hierarchy Process (AHP), Technique for order of preference by similarity to ideal solution (TOPSIS) and their fuzzy variant are highly applied. Conclusion, implications for researchers and practitioners, limitations, and direction for future research are provided.