A combined approach of analytic hierarchy process and decision-making trial and evaluation laboratory methods for evaluating key success factors of third-party logistics service providers

Abstract

This study aims to evaluate key success factors associated with the third-party logistics (3PL) service providers in Sri Lanka. This study used the systematic literature review and expert’s opinion to identify the key success factors of third-party logistics industry in Sri Lanka. In total, 20 key success factors were obtained, and those key success factors were grouped into four categories as organization strategy, management and process, human resources and customer orientation. The study used the Q-sort technique to group key success factors into four categories and Analytic Hierarchy Process (AHP) to identify the priorities of the key success factors. Decision Making Trial and Evaluation Laboratory (DEMATEL) method used to identify the interrelationships among the key success factors in each category. The result shows that business expansion, technology and automation, internationalization of operations, management and leadership style are the most important key success factors in the Sri Lankan third-party logistics industry. The outcomes of this study can help managers/practitioners to formulate flexible decision strategies for better performance in their third-party logistics firms and experience a competitive advantage against the competitors.