The Implementation Of Analytic Hierarchy Process In Pharmaceutical Industry For Selection Process Of 3rd Party Logistics Service Provider

Deciding to outsource a company’s warehousing and distribution is never easy. Although cost iscertainly one of the major considerations, there are many other criteria such as quality, reputation andservice level that are part of the decision making process. Many companies from different industriesprefer to outsource logistics activities by evaluating different information when choosing the right logisticspartner. Through this, companies also gain experience about working with a strategic partnerfor outsourcing. Also, the experience/former performance of the potential partner is one of the mostimportant performance indicator and decision criteria for the logistics provider selection. Therefore,experience is one of the key driver in decision making process. Since pharmaceutical industry has itsown priorities due to stricter quality standards, the experience related to the former performance is amore relevant factor in the decision criteria. In this study, the analytic hierarchy process (AHP) wasapplied to evaluate selection process of 3PL service providers in pharmaceutical industry. Also, the relativeweights of the four criteria and twelve sub-criteria were determined to select the most importantcriteria in pharmaceutical industry which was experience with its factor weight of 32.40%.

___

  • Liu, C.-L. and Lyons, A. C. (2011), “An analysis of third-party logistics performance and service provision”; Transportation Research Part E: Logistics and Transportation Review 47 (4): 547–570