Fuzzy based appraisement module for 3PL evaluation and selection

Abstract

Purpose

In today’s’ highly competitive market, outsourcing logistic activities have become a global trend as it offers wide range of services including transportation, distribution, packaging, labeling, warehousing, freight forwarding and order fulfillment. The demand of third-party logistics (3PL) provider becomes an increasingly important issue for corporate seeking improved customer service, operational efficiency, logistics costs as well as capital expenditure reduction. However, choosing a proper 3PL provider is a kind of multi-criteria decision making problem under consideration of complicated criteria hierarchy. Therefore, it seems necessary to develop an efficient appraisement module towards performance evaluation as well as selecting the best 3PL provider. The paper aims to discuss these issues.

Design/methodology/approach

The present paper proposes a fuzzy based appraisement platform for evaluation and selection of 3PL providers. The theory behind interval-valued fuzzy numbers (IVFNs) has been utilized to aid the said decision-modeling. Based on two appraisement modules for 3PL evaluation; empirical data have been analyzed to validate case application.

Findings

The proposed method has been found efficient for solving the group decision-making problem under uncertain environment due to vagueness, ambiguity associated with decision-makers’ subjective judgment. The proposed appraisement platform has been explored by an Indian automobile part manufacturing company at eastern part of India. 3PL providers have been evaluated individually to check their performance level with respect to various evaluation attributes. Apart from estimating overall performance metric, the model presented here can identify ill-performing areas which necessitate future attention.

Originality/value

The major contributions of this work have been summarized as follows: First, development and implementation of an efficient decision-making procedural hierarchy to support 3PL evaluation and selection. Second, an overall performance metric has been introduced. Third, concept of IVFNs has been efficiently explored to facilitate such a appraisement cum selection decision making. Final, the appraisement index system has been extended with the capability to search ill-performing areas which require future progress.

Citation

Sahu, N.K., Datta, S. and Mahapatra, S.S. (2015), "Fuzzy based appraisement module for 3PL evaluation and selection", Benchmarking: An International Journal, Vol. 22 No. 3, pp. 354-392. https://doi.org/10.1108/BIJ-01-2013-0002