A multi-criteria market entry model for logistics service providers :|a study in numerous industries

Abstract

Logistics service providers have always been part of a company in terms of distribution, warehousing, and inventory management. In today’s world, logistics service providers (LSPs) have become more than that. Increasing competition and importance of cost reduction in supply chain and logistics activities increase the prominence of LSPs, thus LSPs have become major elements instead of backup elements. From organizations’ point of view, speed, cost, and flexibility became more substantial since the second half of the 20th century. So, for the purpose of better excellence against competitors, using external resources has become increasingly critical. For this reason, LSP selection is one of the most important processes of companies in the light of increase in outsourcing. In cooperation with LSPs, firms can have important opportunities to reduce their costs and focus on their core businesses. These opportunities lead companies to use LSPs extensively, and different models exist for the LSP selection process based on expectations from LSPs. In literature, LSP selection issue is investigated as a multi-criteria decision-making consideration and many researchers have done studies on this area. The purpose of this study is creating an upgradeable model that contains criteria used by companies while selecting LSPs in order to provide knowledge about all global industries for LSPs managers. Findings gathered from literature review are supported with client contracts information from a LSP company and experiences of logistics service providers’ managers.