Title: A multicriteria logistics-outsourcing decision making using the analytic hierarchy process
Author: Chandandeep Singh Grewal, Kuldeep Kumar Sareen, Sumit Gill
Department of Mechanical and Production Engineering, Guru Nanak Dev Engineering College, Gill Park, Ludhiana, Punjab, 141006, India.
Department of Mechanical and Materials Engineering, University of Western Ontario, 1151 Richmond Street, London, Ontario, N6A 5B8, Canada.
Department of Mechanical Engineering, Rayat and Bahra Institute of Engineering & Bio Technology, Kharar, Distt Mohali, Punjab, 140104, India
Journal: Int. J. of Services Technology and Management, 2008 Vol.9, No.1, pp.1 - 13
Abstract: Different management pioneers and academicians have stated that an organisation's competitive advantage stems from its ability to identify, concentrate on and develop its core competencies and activities, and outsource anything which is noncore. Outsourcing of logistics systems can contribute to profits by enabling users to maximise financial benefits, focus on core competencies, reduce risk and liability, provide wider coverage and flexible capacity, provide dedicated resources, etc. In this paper, a decision-making model for outsourcing the logistics system was developed using the Analytic Hierarchy Process (AHP). With this technique, several options are considered in the decision analysis that make it possible to adequately evaluate and determine whether outsourcing the logistics distribution may be beneficial or not for the company. The case example given in this paper proves that AHP can be used effectively to analyse the outsourcing decision for logistics distribution. It is expected to provide practitioners with the systematic analysis needed to make this important decision.
Keywords: analytical hierarchy process; AHP; outsourcing; logistics; distribution; multicriteria decision making; MCDM.