Evaluation of Lead Logistics Provider Using the SMART Process: A Case Study in a Taiwan Automotive Industry

Abstract

Taiwan's automotive industry has undergone tremendous changes during the past decades as a result of joining the World Trade Organization (WTO) in 2002. This membership has affected the operating costs and the competitive advantage of automotive companies. The selection of an effective logistics service provider is a key strategy to reinforce competitiveness. This type of selection is a multi-attributes decision-making problem that includes both qualitative and quantitative attributes. This study presents a comprehensive methodology for evaluating a lead logistics provider (LLP). The evaluation of an LLP is the precondition and foundation of logistics operation; it is the important task of choosing the best logistics service provider for logistics management. The proposed methodology consists of 2 parts: (a) using a decision-making analysis framework to structure the objective hierarchy and to identify the evaluation attributes; and (b) applying the simple multi-attribute rating technique-rank order centric (SMART-ROC) method to drive the weights by ranking and rating. After they are identified, the evaluation attributes are used to construct a SMART model. This SMART model is subsequently applied for the final evaluation of a provider, as demonstrated in the case study presented here. The results of this case study indicate that quality is the most important criterion for the user and the provider companies because this factor influences the final evaluation process. The proposed method also enables decision makers to understand the complex relationships between relevant attributes, thereby improving the reliability of their decisions.