Sustainable evaluation and selection of potential third-party logistics (3PL) providers: An integrated MCDM approach

Abstract

Purpose

The purpose of this paper is to efficiently assist the decision makers in evaluating and selecting the most appropriate third-party logistics (3PL) provider from environmental sustainability perspective using a two-phase model based on data envelopment analysis (DEA) and analytic network process (ANP).

Design/methodology/approach

The study uses an integrated approach of DEA and ANP as an evaluation and selection methodology to select an efficient and requisite 3PL. The integrated model is a sound technique for 3PL evaluation and selection. DEA effectively screens the maximally efficient 3PLs, whereas ANP easily performs the cumbersome process of weighting diverse criteria and ranks various alternatives according to their performance on the basis of these criteria. This study lists the prominent evaluation and selection criteria taking into consideration the environmental sustainability. Finally, a real-life industrial application is presented to demonstrate the proposed method.

Findings

The current research work is devoted to the emerging research topic of environmental sustainability in logistics industry and supply chain management. The results of study indicate that eco-efficient transportation and 3PLs lead better transportation planning, better inventory and warehouse management, lower inventory cost and sustainable supply chain operations. Also, the applied approach enables the decision makers to better understand the complex relationships of the relevant criteria in the decision-making process.

Research limitations/implications

This study does not investigate the relationships between environmental performances and differentiation advantage from the perspective of 3PLs. Also, sensitivity analysis is not performed.

Practical implications

The developed integrated model enables decision analysts to better understand the complete evaluation process of 3PL evaluation and selection considering environmental sustainability perspective. Furthermore, the developed approach provides a more flexible, simple, accurate, effective, and systematic decision support tool for 3PL evaluation and selection.

Originality/value

The current study is first of its kind to use the integrated approach in evaluation and selection of 3PLs from environmental sustainability perspective considering the inter-dependencies among the evaluation and selection criteria.

Citation

Raut, R., Kharat, M., Kamble, S. and Kumar, C.S. (2018), "Sustainable evaluation and selection of potential third-party logistics (3PL) providers: An integrated MCDM approach", Benchmarking: An International Journal, Vol. 25 No. 1, pp. 76-97. https://doi.org/10.1108/BIJ-05-2016-0065