Title: A multi-criteria decision making model for outsourcing inbound logistics of an automotive industry using the AHP and TOPSIS

Authors: N. Ramkumar, P. Subramanian, M. Rajmohan

Addresses: Department of Management Studies, Indian Institute of Technology, Madras, Chennai – 600036, Tamilnadu, India. ' Department of Management Studies, Indian Institute of Technology, Madras, Chennai – 600036, Tamilnadu, India. ' Department of Industrial Engineering, College of Engineering, Guindy, Chennai – 600025, Tamilnadu, India

Abstract: This paper focuses on the inbound logistics segment in the supply chain of automobile companies, which are known to be highly complex. This has always affected key business functions in the supply chain with respect to cost, coordination, and material delay issues. During third party logistics service provider (TPLs) selection, practitioners have started to concentrate on coordination, integration, and cooperation as some of the key areas to improve SC performance. In this context, we propose a model for selection of TPLs network with an objective to create a favourable environment for improving coordination and integration using analytic hierarchy process (AHP) and technique for order preference by similarity to ideal situation (TOPSIS) approach. A case of an automobile company is used to explain the model and potential expected benefits are discussed. A comparative analysis on decision-making certainty between the classical AHP and TOPSIS approach is also discussed.

Keywords: third party logistics; 3PL service providers; inbound logistics; outsourcing; integration; TOPSIS; order preference; similarity; ideal situations; AHP; analytical hierarchy process; multicriteria decision making; MCDM; automobile industry; costs; coordination; India; materials; delays; heuristics; enterprise network management; data analysis; SCM; supply chain management; automotive logistics.

DOI: 10.1504/IJENM.2009.032396

International Journal of Enterprise Network Management, 2009 Vol.3 No.3, pp.223 - 245

Published online: 02 Apr 2010 *

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