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

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 logistics

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 relative

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%.