Sourcing third party logistics service providers based on environmental, social and corporate governance: a case study

Abstract

The acronym ESG, environmental, social and governance, emerges as a strong trend in the era of the circular economy and stands out as a need for companies to respond to the segment in which they operate. Although most studies have been done in the past, they did not address ESG criteria to ensure operator exemption for logistics providers. Further research on the application of realistic circular economy techniques is recommended. Therefore, strategic sourcing, based on multicriteria decision analysis (MDA), considering parameters such as economic, technical, and environmental factors, has created a perfect methodology that considers all these essential requirements, revealing an excellent way to outsource logistics service providers (LSPs). The article aims to prove MDA’s effectiveness awarding the best LSP through predefined dimensions involving human resources, risk management, environmental and other social aspects, indicating dedication and commitment to social environmental issues and corporate governance during a procurement’s strategic sourcing in a Brazilian pharmaceutical company process. A Literature review supported by a real case study where a multifunctional team from Pharmaceutical and Consultants proved the objective was valid. A secondary objective was demonstrated on how current sustainability challenges can be overcome by the organization and generate value for its stakeholders and society, showing responsibility and commitment to environmental, social, and corporate governance issues. After reviewing all the concepts involved using the literature review, the results were achieved indicating that sourcing process’ case study through MDA validated the effectiveness choosing the 3PL with the best results in ESG. The article deals with a current, relevant, and not very explored topic and may contribute to enhancing the investments of logistics service providers (LSPs) in ESG, mainly those that weren’t awarded at end of the project.