Third-party logistics provider selection:: insights from a Turkish automotive company

Purpose - The purpose of this paper is to highlight the efforts of a leading Turkish automotive company to restructure its supply chain for export parts. Design/methodology/approach - The paper presents hand-on experiences of a pilot project conducted at Tofas-Fiat automotive company to redesign its logistics operations and to select a global logistics service provider, using an analytic hierarchy process for multi-criteria decision-making. Findings - 3PL providers in Turkey must improve their capabilities and act proactively in providing value-adding services as the companies are becoming more demanding in their expectations in building strategic relationships. Research limitations/implications - The focus of the paper is on automotive supply chain for export parts, but the analysis as well as 3PL selection methodology may be successfully applied to other products in different settings and in other sectors. Practical implications - Companies must determine logistics goals and requirements prior to taking on a 3PL. The defined objectives will help to establish the criteria for 3PL selection. Some of these include IT capability, service quality, customer relationship, and cultural fit. This analysis helps the company to define the problem with its differing aspects rather than only financial considerations, to reflect the common mind of the team, to resolve conflicts between the differentiated departmental goals, and to bring objectivity to decisions via an analytical approach. Originality/value - This paper provides some practical insights from an automotive company that attempts to streamline and efficiently run its supply chain through logistics outsourcing.