Assessment of risks associated with third-party logistics in restaurant supply chain

Abstract

Purpose

The restaurant network is reforming rapidly due to the advancements encountered so far in the restaurant–third party logistics (3PL) collaborations. These collaborations resulting from a strategical partnership between the restaurant and the 3PLs play a significant role in getting a good handle on the web, logistics activities, online business and many more services. Despite the collaborations, 3PL in the restaurant supply chain is associated with many risks that may hamper the supply chain's profitability. In this study, several risks related to 3PL are investigated and analysed.

Design/methodology/approach

Deciding the relative importance of different risks is an intricate errand. The predominance of one risk over the others changes from individual to individual and ?rm to ?rm. Therefore, to catch the changeability in choice, the fuzzy analytical hierarchy process (AHP) is an extremely valuable tool used in this research. In addition to this, fuzzy AHP is incorporated with fuzzy TOPSIS for preference ranking of 3PL risks in the restaurant supply chain and obtain risk index value, which provides an excellent approach to rank the risks. Furthermore, we performed a sensitivity analysis to analyse the stability of the results obtained in this study.

Findings

Results indicate that “macro-level risks” (i.e. the risks associated with 3PL in the restaurant supply chain due to political agitation in the district, cataclysmic events, ailments like COVID-19, bird influenza, etc.) is the most relevant first-level risk with high-risk index as well as high relative weight. As per the analysis of second-level risks, the occurrence of cataclysmic events holds the most elevated risk index value.

Practical implications

This research provides the restaurant industry and the 3PL with a generalized framework with set parameters that can be used to attain a successful 3PL in the restaurant supply chain of any developing nation.

Originality/value

This research proposes an evaluation framework for the risk assessment of third-party logistics in the restaurant supply chain. This paper explores risks for efficient implementation of 3PL in the restaurant supply chain. From a managerial perspective, the rank table is also provided with the goal that mitigation of the risks can be done quickly.

Citation

Shanker, S., Sharma, H. and Barve, A. (2021), "Assessment of risks associated with third-party logistics in restaurant supply chain", Benchmarking: An International Journal, Vol. 28 No. 8, pp. 2432-2464. https://doi.org/10.1108/BIJ-06-2020-0343