Selection of a Third-Party Logistics Provider: Capturing the Interaction and Influence of Performance Metrics with the Analytical Network Process

Abstract

When a business decides to outsource its logistics operations to improve its performance, the organization will need to select a third-party logistics provider (3PL) that shares common goals and satisfies service level requirements. In this paper, we identify a set of 3PL performance measures from the perspective of the supply chain and organize them into a time-phased format, beginning with the post production stage and continuing through the delivery of the goods to the customer distribution center. The supply chain flow is presented as a Metrics Arrow. To integrate the performance metrics (PM) into one model, we propose an analytical network process (ANP) to capture all PM and to understand the interrelated influences among them. Additionally, to derive the weights for PM, the proposed ANP model offers managerial insight into the relative impact of each metric as well as warning signals or trigger points within the network of PM. The model provides a realistic framework to choose the 3PL that can help achieve the greatest improvements within the supply chain. © 2012 John Wiley & Sons, Ltd.

Publication Title

Journal of Multi-Criteria Decision Analysis

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