A grey DEMATEL approach to develop third-party logistics provider selection criteria

Abstract

Purpose – Third-party logistics (3PL) plays a main role in supply chain management and, as a result, has experienced remarkable growth. The demand for 3PL providers has become a main approach for companies to offer better customer service, reduce costs, and gain competitive advantage. This paper identifies important criteria for 3PL provider selection and evaluation, and the purpose of this paper is to select 3PL providers from the viewpoint of firms which were already outsourcing their logistics services. Design/methodology/approach – This study utilized the grey decision-making trial and evaluation laboratory (DEMATEL) method to develop 3PL provider selection criteria. Because human judgments are vague and complicated to depict by accurate numerical values, the grey system theory is used to handle this problem. Findings – The findings revealed the structure and interrelationships between criteria and identified the main criteria for 3PL provider selection. The most important criteria for 3PL provider selection are on time delivery performance, technological capability, financial stability, human resource policies, service quality, and customer service, respectively. Practical implications – The paper’s results help managers of automotive industries, particularly in developing countries, to outsource logistics activities to 3PL providers effectively and to create a significant competitive advantage. Originality/value – The main contributions of this paper are twofold. First, this paper proposes an integrated grey DEMATEL method to consider interdependent relationships among the 3PL provider selection criteria. Second, this study is one of the first studies to consider 3PL provider selection in a developing country like Iran.

DEMATEL Technique: A Systematic Review of the State-of-the-Art Literature on Methodologies and Applications

“…The proposed method involves assessing interdependency relationships among factors by a grey linguistics scale, transforming grey numbers into single real numbers using a modified CFCS process, and eventually executing the classical DEMATEL steps to obtain an IRM with associated analysis. Later, the grey theory and DEMATEL method was applied by Dou and Sarkis [188] to evaluate the barriers of implementing China RoHS (the restriction of the use of hazardous substances in electrical and electronic equipment) regulations from a multiple stakeholder perspective, by Zhu et al [189] to identify the supply chain-based barriers for truck-engine remanufacturing in China, by Rajesh and Ravi [190] to ascertain the major enablers of supply chain risk mitigation in electronic supply chains, by Shao et al [191] to analyze the barriers between environmentally friendly products and consumers on the European automobile industry, by Govindan et al [192] to develop important criteria for thirdparty logistics provider selection and evaluation, and by Xia et al [193] to analyze the internal barriers for remanufacturers in the Chinese automotive sector.…”

An Examination of Trust as a Strategical Factor of Success in Logistical Firms

“…Third-party logistics (3PL) plays a main role in supply chain management and, as a result, has experienced remarkable growth. The demand for 3PL providers has become a main approach (Govindan et al 2016). Companies generally outsource their logistics By enhancing operational performance, integration improves outsourcing performance in terms of both financial performance and overall satisfaction.…”

A Hybrid MCDM Approach for Strategic Project Portfolio Selection of Agro By-Products

“…The other benefit of grey systems over fuzzy models is that it does not require any robust fuzzy membership function [80][81][82][83].…”

“…The grey systems theory reflects the situation of fuzziness which is a foremost benefit of grey systems theory over fuzzy set theory. The other benefit of grey systems over fuzzy models is that, it does not require any robust fuzzy membership function [80][81][82]. Grey theory is established to reflect the uncertainty problem of small samples and poor information.…”