The Implementation Of Analytic Nalytic Hierarchy Process In Pharmaceutical Industry For Selection Process Of 3rd Party Logistics Service Provider

Abstract

Deciding to outsource a company's warehousing and distribution is never easy. Although cost is certainly one of the major considerations, there are many other criteria such as quality, reputation and service level that are part of the decision making process. Many companies from different industries prefer to outsource logistics activities by evaluating different information when choosing the right lo-gistics partner. Through this, companies also gain experience about working with a strategic partner for outsourcing. Also, the experience/former performance of the potential partner is one of the most important performance indicator and decision criteria for the logistics provider selection. Therefore, experience is one of the key driver in decision making process. Since pharmaceutical industry has its own priorities due to stricter quality standards, the experience related to the former performance is a more relevant factor in the decision criteria. In this study, the analytic hierarchy process (AHP) was applied to evaluate selection process of 3PL service providers in pharmaceutical industry. Also, the rel-ative weights of the four criteria and twelve sub-criteria were determined to select the most important criteria in pharmaceutical industry which was experience with its factor weight of 32.40%.