Analytic hierarchy process applied in the prioritization of third-party logistics providers in banking services

Testoni, Paulo Siqueira; Tramarico, Claudemir Leif; Rodríguez, Elias Carlos Aguirre; Marins, Fernando Augusto Silva

doi:10.1590/0103-6513.20230108

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Research Article • Prod. 34 • 2024 • https://doi.org/10.1590/0103-6513.20230108 copy

Analytic hierarchy process applied in the prioritization of third-party logistics providers in banking services

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract

Paper aims

This paper describes research that aimed to develop a procedure for prioritizing the performance management of Third-party logistics (3PL) who work in a banking services company.

Originality

This article’s main contribution is the development of a procedure for evaluation and prioritization of the main 3PL performance indicators based on the SCOR model’s metrics.

Research method

This paper applied Analytic Hierarchy Process (AHP), a method for multi-criteria analysis, using the metrics of Supply Chain Operations Reference Model (SCOR).

Main findings

The approach proposed evaluates performance indicators of 3PL and prioritizes the development of new performance indicators using the metrics agility, responsiveness, and reliability of SCOR.

Implications for theory and practice

This research contributes to the literature by demonstrating the applicability of multicriteria approach to find the prioritization of 3PL in a banking services company.

Keywords
Analytic hierarchy process; Banking services; Performance management; Third-party logistics providers

Keywords	Scopus	Web of Science
“Analytic Hierarchy Process”	31,394	22,709
“Performance management”	10,489	6,847
“Analytic Hierarchy Process” AND “Third-party logistics”	85	65
“Performance management” AND “Third-party logistics”	12	6
(“Analytic Hierarchy Process” OR “Performance management”) AND “Third-party logistics”	97	71

References	Topics
Aharonovitz et al. (2018)Aharonovitz, M. C. S., Vieira, J. G. V., & Suyama, S. S. (2018). How logistics performance is affected by supply chain relationships. International Journal of Logistics Management, 29(1), 284-307. http://doi.org/10.1108/IJLM-09-2016-0204. http://doi.org/10.1108/IJLM-09-2016-0204...	Effects of organizational culture and company size on performance management.
Pellathy et al. (2018)Pellathy, D. A., In, J., Mollenkopf, D. A., & Stank, T. P. (2018). Middle-range theorizing on logistics customer service. International Journal of Physical Distribution & Logistics Management, 48(1), 2-18. http://doi.org/10.1108/IJPDLM-10-2017-0329. http://doi.org/10.1108/IJPDLM-10-2017-03...	Influence at performance management on the final client perception of the company.
Sanchís-Pedregosa et al. (2018)Sanchís-Pedregosa, C., Machuca, J. A. D., & González-Zamora, M. D. M. (2018). Determinants of success in transport services outsourcing: empirical study in Europe. International Journal of Logistics Management, 29(1), 26-283. http://doi.org/10.1108/IJLM-09-2016-0207. http://doi.org/10.1108/IJLM-09-2016-0207...	Challenges of performance and relationship management through 3PL optics.
Sengupta et al. (2018)Sengupta, S., Niranjan, T. T., & Krishnamoorthy, M. (2018). Trends and directions in service triads research. International Journal of Physical Distribution & Logistics Management, 48(3), 333-360. http://doi.org/10.1108/IJPDLM-02-2017-0095. http://doi.org/10.1108/IJPDLM-02-2017-00...	Legislation and Regulation Organization effects on performance management.
Song et al. (2019)Song, G., Song, S., & Sun, L. (2019). Supply chain integration in omni-channel retailing: a logistics perspective. International Journal of Logistics Management, 30(2), 527-548. http://doi.org/10.1108/IJLM-12-2017-0349. http://doi.org/10.1108/IJLM-12-2017-0349...	Influence of logistics systems integration on performance management.

Performance Attributes	Definition
Agility	The ability to answer to external influences; the ability to answer to market changes or maintain competitive advantage. Agility SCOR metrics include flexibility and adaptability.
Responsiveness	The speed at which tasks are performed. The speed at which the supply chain delivers products to customers. Examples include metrics of time cycle.
Reliability	Ability to perform tasks according to what is expected. Reliability focuses on forecasting results of a process. Typical metrics include on time, good quality and the right amount in deliveries.
Costs	Operation costs of supply chain processes. This includes material, labor, transportation, and management costs.
Assets Management Efficiency	Ability to use assets effectively and performance management strategies of assets include warehousing in sourcing versus outsourcing and reduction. Metrics include number of storage days in suppliers and capacity usage.

	Level	Priority
	L1 (excellent)	1
	L2 (very good)	0.83
	L3 (between good and very good)	0.67
	L4 (good)	0.50
	L5 (between weak and good)	0.25
	L6 (weak)	0

3PL	Performance Indicator	Measurement	Description
DC	Terminals Dispatch (TD)	Daily	Number of terminals dispatched from DC to last mile 3PL
	Terminals Production (TP)	Daily	Number of terminals produced by DC
	Terminals Receiving (TR)	Daily	Number of new terminals and reverse logistics received in DC
Transportation	Reverse Logistics (RL)	Daily	Number of invoices collected and awaiting collection

	On Time In Full (OTIF)	Daily	Number of invoices expired

	Retention (R)	Weekly	Number of invoices retained by SEFAZ
Last Mile	Cancellation (CAN)	Daily	Percent of unsuccessful answered services per month

	Backlog of Orders (BO)	Daily	Number of available services to answer

	Service Level Agreement (SLA)	Daily	Percent of on time answered services per month

Position	Number of respondents	Time in company	College education area
Analyst	10	Up to 4 years	Engineering/Business Administration
Coordinator	4	Up to 9 years	Business Administration
Jr analyst	5	Up to 2 years	Economy/Advertising
Manager	1	More than 10 years	Logistics
Senior analyst	11	Up to 7 years	Engineering/Business Administration

Level/Performance Indicators	BO	CAN	TD	RL	OTIF	TP	R	TR	SLA
Excellent (1)	6	7	3	0	6	2	3	2	10
Very good (0.83)	13	9	14	9	9	13	5	15	13
From good to very good (0.67)	7	11	8	10	10	9	10	5	6
Good (0.5)	5	2	6	6	5	6	11	6	2
From weak to good (0.25)	0	2	0	6	1	1	2	2	0
Weak (0)	0	0	0	0	0	0	0	1	0

Level/Performance indicators	BO	CAN	TD	RL	OTIF	TP	R	TR	SLA
Excellent (1)	0.19	0.23	0.1	0	0.19	0.06	0.1	0.06	0.32
Very good (0.83)	0.35	0.24	0.37	0.24	0.24	0.35	0.13	0.4	0.35
From good to very good (0.67)	0.15	0.24	0.17	0.22	0.22	0.19	0.22	0.11	0.13
Good (0.5)	0.08	0.03	0.10	0.10	0.08	0.10	0.18	0.10	0.03
From weak to good (0.25)	0	0.02	0	0.05	0.01	0.01	0.02	0.02	0
Weak (0)	0	0	0	0	0	0	0	0	0
Aggregate priority	0.77	0.75	0.74	0.6	0.74	0.71	0.64	0.69	0.83

Performance Indicator	Description
Supply	Amount of available material to service orders answering.
Critical Channels	Number of customers orders from critical channels, like complaints and legal pleas.
First Time Through	Number of service orders successfully answered at the first try.
Productivity	Number of service orders answered per day
Recurrence	Numbers of service orders not answered successfully at the first time, and the reasons
Customer Satisfaction	Customers evaluation about their relationship with the company
3PL Satisfaction	3PL evaluation about their relationship with the company
Average Service Time	Average service time of answered orders.
Average Waiting Time	Measurement of customers waiting time to answer his order.

Criteria	Agility	Responsiveness	Reliability	Priority
Agility	1	5	3	63.70%
Responsiveness	1/5	1	1/5	10.47%
Reliability	1/5	3	1	25.83%

Sub-criteria	A1	A2	A3	Priority
FTT (A1)	1	7	3	64.91%
Productivity (A2)	1/7	1	1/5	7.19%
Recurrence (A3)	1/3	5	1	27.90%

Sub-criteria	R1	R2	R3	Priority
Critical channels (R1)	1	7	5	73.83%
Average Service Time (R2)	1/7	1	3	17.02%
Average Waiting Time (R3)	1/5	1/3	1	9.15%

Sub-criteria	C1	C2	C3	Priority
Supply (C1)	1	3	5	60.18%
Customer Satisfaction (C2)	1/3	1	7	32.36%
3PL Satisfaction (C3)	1/5	1/7	1	7.46%

Criteria and Sub-criteria		Local	Global
Criteria and Sub-criteria		Priority	Priority
Agility		63.70%	63.70%
	FTT (A1)	64.91%	41.35%
	Productivity (A2)	7.19%	4.58%
	Recurrence (A3)	27.90%	17.77%
Responsiveness		10.47%	10.47%
	Critical Channels (R1)	73.83%	7.73%
	Average Service Time (R2)	17.02%	1.78%
	Average Waiting Time (R3)	9.15%	0.96%
Reliability		25.83%	25.83%
	Supply (C1)	60.18%	15.54%
	Customer Satisfaction (C2)	32.36%	8.36%
	3PL Satisfaction (C3)	7.46%	1.93%

	A1	A2	A3	R1	R2	R3	C1	C2	C3
DC	L4	L5	L3	L4	L4	L6	L4	L5	L5
Transportation	L2	L2	L2	L6	L3	L6	L3	L6	L4
Last mile	L3	L2	L4	L6	L2	L5	L2	L4	L3

	A1	A2	A3	R1	R2	R3	C1	C2	C3	Priority
	41.3%	4.6%	17.8%	7.7%	1.8%	1.0%	15.5%	8.4%	1.9%
DC	0.50	0.25	0.67	0.50	0.50	0	0.50	0.25	0.25	0.49
Transportation	0.83	0.83	0.83	0	0.67	0	0.67	0	0.50	0.65
Last mile	0.67	0.83	0.50	0	0.83	0.25	0.83	0.50	0.67	0.60

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