Logistics Supplier Selection Research Articles

CAPARO: A Structured Approach for Selection of a Common Logistics Provider

CAPARO India Pvt. Ltd. is one of the leading players of automotive components industry in India. It has multiple logistics providers for export-import logistics at its five manufacturing locations in north India. Dealing with multiple logistics provider restricts negotiation power, service commitments, customer satisfaction and leads to higher transportation cost and time delay due to multiple points of contact. CAPARO aims to select one common logistics provider for all their units in north India for export-import logistics, warehousing, packaging and value added services in order to minimise all the above stated problems. This case study provides a structured decision-making model for selection of the most suitable logistics provider using the Analytic Hierarchy Process (AHP). With this technique, several criteria like freight charges, inland charges, schedule flexibility, warehousing capacity, track and trace system, port presence and custom clearance are considered that make it possible to select suitable logistics provider. The case example establishes that AHP can be effectively used to analyse the logistics provider selection. It is expected to provide practitioners with a systematic analysis needed to make this important decision.

Evaluation of third‐party logistics (3PL) providers by using a two‐phase AHP and TOPSIS methodology

PurposeThird‐party logistics (3PL) provider selection has gained great attention in logistics management literature. The purpose of this paper is to provide a good insight into the use of a‐two‐phase analytical hierarchy process (AHP) and technique for order preference by similarity to ideal solution (TOPSIS) approach that is a multi‐criteria decision‐making methodology in the evaluation of 3PL providers.Design/methodology/approachIn this paper, after the selection criteria of 3PL providers are determined by modified Delphi method, the weights of criteria have been calculated by applying the AHP method. The TOPSIS method is then employed to achieve the final ranking results. And an actual case example is presented to clarify the methodology. Sensitivity analysis is also given to demonstrate how sensitive the proposed model is to changes in the weights of different main criteria.FindingsThis model provides decision makers with a simple, flexible, and easy‐to‐use approach to evaluate potential 3PL providers efficiently. Findings demonstrate that the proposed benchmarking framework, with minor modifications, can be useful to all firms in their 3PL provider selection decisions.Research limitations/implicationsA two‐phase AHP and TOPSIS methodology is very flexible and suitable for various decision situations. However, selection of the appropriate 3PL provider requires consideration of multiple alternative solutions and evaluation criteria because of complex methodology, and hence it increases the effort.Originality/valueThis is probably the first time that an attempt has been made to apply the modified Delphi method, AHP and TOPSIS methodology in the decision of 3PL provider selection in a Turkish automotive supplier company. This is the most powerful motivation to consider this problem. In addition, the paper is especially of interest to managers as they make decisions on which criteria should be considered in the evaluation process and how a decision model should be structured by using a two‐phase AHP and TOPSIS methodology.

A mathematical model for selecting third-party reverse logistics providers

Generally, many optimisation models of Third-Party Reverse Logistics (3PL) provider selection assume that cardinal data, with less emphasis on ordinal data, exist. However, to select the best 3PL providers, this assumption is not realistic because ordinal data are vital. To deal with this difficulty and select the most efficient 3PL provider with the condition that both ordinal and cardinal data are present, a methodology which is based on Imprecise Data Envelopment Analysis (IDEA) is introduced. A numerical example demonstrates the application of the proposed method.

Relationship Between Logistics Service's Perceived Value and Outsourcing of Logistics Activities

Outsourcing has become increasingly popular in recentyears, and is often quoted as a means of coping with rapidchanges in technology and in the business environment. Thescope of third -party logistics may range from a relatively limitedcombination of activities (e. g. transportation and warehousing)to a comprehensive set of logistics services. The authorsfirst define the reasons for outsourcing with the emphasis onbusiness logistics. They particularly point out the motivationsfor logistics outsourcing, the possibilities of logistics outsourcing,and they present the process of outsourcing partner selectionas well. Finally, they analyze the specific issues of logisticsservice's perceived value in outsourcing logistics activities onthe basis of the survey carried out in Slovenian companies. Thepurpose of the survey was to measure the customers' perceptionof different characteristics of logistics provider which can be decisivewhen manufacturing firms are trying to make a decisionwhether to outsource and which logistics provider to select. Thepaper creates a framework for the selection of the importantand perceived characteristics of logistics provider relevant tocustomer in the process of the logistics supplier selection.

The transportation and warehousing challenge for multinational corporations in China

Logistics is a major challenge for multinational corporations seeking to do business in China. Transportation and warehousing are two core activities of logistics which will have to be outsourced or produced internally by foreign firms entering the China market. This paper focuses on road and rail transportation, the primary forms of transport utilized to move finished goods, as well as the warehousing and distribution center service sector. Trucking services and costs are observed to be poor by Western standards. There is no established less-than-truckload (LTL) industry and there are limited trucking networks offering one stop shipping across the country. None the less, trucking will have to be the backbone of any distribution network in China for finished products. Rail service is even poorer. There are capacity constraints and finished goods movement is not a priority of the Chinese railways. Warehousing capacity inherited from state owned enterprises is inadequate, but new distribution centers are being built rapidly. Foreign firms need to recognize these limitations in service, capabilities and capacity in planning their distribution networks. The fragmented nature of both the trucking and warehousing sectors places a premium on the value added by third party logistics providers (3PL’s) who have the knowledge and the relationships with local trucking and warehouse firms to minimize the risk of a supply chain breakdown. The selection of logistics suppliers is the most critical logistics decision in the Chinese environment.