A STUDY OF SELECTION ISSUES OF INTEGRATED SERVICE PROVIDERS

Abstract

In today's industrial scenario, the expectations and demands of customers are reaching great heights. In order to. satisfy the customer requirements the shippers/users are increasingly turning towards Fourth party logistics (4PL) service providers to manage their total supply chain operations. Being the sole point of contact between company and its array of logistics and information service providers, 4PL supervises all aspects of the supply chain of manufacturers or distributors. A 4PL service provider acts as a "logistics integrator" of customer, company and supplier, to run a company's logistics, knowledge base and Information Technology (IT) systems. So, it can also be called as Integrated Service Provider (ISP). Therefore, there is a need of immediate attention to study the selection issues of the integrated service provider's to select the best. Selection of integrated service providers is a multi criteria decision making (MCDM) problem, thus offering a lot of challenges to the shippers. Evaluation of integrated service providers and subsequent identification and selection of integrated service providers depends on the selection criteria and the quality and accuracy of the data. Thus, the decision made by the decision maker or an evaluation team needs a systematic and logical approach to arrive at a precise and meaningful decision. In this present research, initially, the criteria for the selection of integrated service providers have been identified and an integrated model based on their inter-relationships has been developed with the help of Interpretive Structural Modelling (ISM) and MICMAC analysis. With this the shippers will have a basic idea of what factors to be considered and their inter-relationships while selecting integrated service provider. Later, various methods deriving the priority weights viz. Analytic hierarchy process (AHP), Fuzzy analytic hierarchy process (FAHP) and Logarithmic least squares method (LLSM) have been employed for 4PL service provider selection. The derived priorities of 4PL alternatives using various methods have been critically analyzed and compared for the effective selection. The use of the model indicates that the computed quantitative evaluations can be applied to improve the precision of the selection.