A framework of supplier selection of Integrative Logistics Providers

Abstract

In order to tackle intensifying competition, more companies feel, it is necessary to outsource their logistics activities to logistics service providers. However, many logistics service providers can only offer a limited scope of services. To simplify managerial complexity, a growing number of companies seek to reduce their logistics service supplier base and thus prefer integrative logistics service providers ((ILSP), also called fourth-party logistics) which provide a broader range of services. However, ILSP may not internalise all logistics businesses and thus they have to outsource their contracts again to other third-party logistics providers. This study aims to build a framework through which the ILSP can decide which logistics service providers should be used. The framework was tested and refined using survey data from China. Furthermore, an innovative method, combining analytical hierarchy process and linear programming, was proposed to assess logistics service providers. A case study was conducted using this method. This study represents a pioneer study of ILSP in China and provides valuable insights for ILSP. © 2009 Inderscience Enterprises Ltd.

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