PROCESS-ORIENTED RISK ASSESSMENT IN INTEGRATED LOGISTICS NETWORKS: AN AHP APPROACH

Abstract

As the importance of integrated logistics networks increases together with the advancements in information technology, the proper evaluation and selection of third-party logistics services becomes a core issue for the participants of these networks. The paper describes a proposed risk assessment approach that can help the customers in the proper evaluation of the mentioned services. The concept employs the analytic hierarchy process (AHP), a well known and widely applied multi-criteria decision making method, for the structured evaluation of the primary operational risk factors which are relevant to the customers. In the proposed approach, the quantification of these risk factors at the side of the service providers is realized through the utilization of process capability indices, the latter are well known and widely applied in the fields of quality management and statistical process control. The aim is to provide a relatively straight-forward and easily applicable way for the risk-based evaluation of third-party logistics services in integrated logistics networks. Another advantage of the concept is that it could be utilized in different fields of the logistics industry, regardless of the concrete field of application.