Vessel Spare Parts Distribution Center Location Decision Model for Ship Maintenance Supply Chain

Abstract

Facility Location Decision (FLD) modelling is a strategic level assessment technique which can be considered as one of the most critical aspects when designing a supply chain. In the maritime industry, an efficient supply chain of vessel spare-parts is vital to maintain uninterrupted operational activities of a shipping line. Thus, storing vessel spare parts in a strategic location and distribution of spares is considered as an important feature in a Ship Maintenance Supply Chain (SMSC). The intermittent nature of demand for vessel spare parts and restrictions to store them on board create the need of locating a Distribution Centre (DC) at a suitable on shore location. Finding a strategic location for a vessel spare parts DC has been given top priority by the decision makers involved in the logistics process. As a timely research, this study has attempted to develop a model to locate a vessel spare parts DC, while carrying out a feasibility analysis to find the most suitable location for a vessel spare-parts DC in Sri Lanka.Purpose: Identify the major factors affecting a FLD in SMSC through evaluation of site alternatives to find the most suitable vessel spare parts DC location in Sri Lanka and to develop a FLD model for SMSC in Sri Lankan context.Methodology: A mixed approach was used for this study where both quantitative and qualitative data was collected. The initial literature review, interviews carried out with industry professionals, survey questionnaires and collection of secondary data from official industry records were the main data sources. Analytical Hierarchy Process (AHP) and Factor Rating Method were used as data analytic tools to derive the best location. In conclusion, the proposed FLD model was developed using the identified factors and the developed indices for each location alternative.