Benchmarking the outsourcing factors of third-party logistics services selection: analysing influential strength and building a sustainable decision model

Abstract

Purpose

Outsourcings always affect crucial supply chain functions concerning flexibility and cost. During the decision to outsource and consider third-party logistics service provider selection, decision-makers need to pay more attention to certain critical outsourcing factors such as coordination, integration and cooperation as these key factors are essential to improve overall supply chain performance. The main purpose of this work is to identify the inter-relations among outsourcing decision factors to highlight the most important and influential factors that should be considered and carefully thought through when making outsourcing sustainable decisions.

Design/methodology/approach

A two-phased methodology has been used in this study. In the first phase, outsourcing decision factors are identified from existing literature and validated by decision-makers from industry and academia. To understand the influential strength and build a sustainable model, the decision-making trial and evaluation laboratory method is used. A courier company in the UAE is considered for implementation.

Findings

All identified and validated factors are segregated into two categories (cause and effect). The result shows that the most influential factors are developing strategic alliances, uncertainty and risk mitigation and deficiency of internal resources for a service.

Practical implications

There are several insights for industry managers and practitioners. The results of the study may help practitioners and logistics managers to make the logistics service sustainable and more efficient for businesses.

Originality/value

This study focusses on a courier company to understand the interdependencies among outsourcing decision factors; this is unique in this field of literature.

Citation

Khan, S.A., Alkhatib, S., Ammar, Z., Moktadir, M.A. and Kumar, A. (2022), "Benchmarking the outsourcing factors of third-party logistics services selection: analysing influential strength and building a sustainable decision model", Benchmarking: An International Journal, Vol. 29 No. 6, pp. 1797-1825. https://doi.org/10.1108/BIJ-03-2020-0121