Multidimensional Framework for Procurement Selection Criteria for Warehouse Management in Sri Lanka

Abstract

A chain is only as strong as its weakest link. In order to retain the effectiveness and efficiency of a Supply Chain (SC), each segment or the link of the SC require to perform their portion, effectively and efficiently. Modern organizations are in a process of creating innovative concepts and practices in order to obtain the competitive edge among the competitors. Warehouse Management (WM) is one such concept that has been introduced to improve the performance of SC. It plays a major role as the most commonly procured business function over the years, whereas world class companies has identified it as an enabler for improving logistics. However irrespective of the worldwide revolutionary achievements gained by SC and WM, procurement of WM within the Sri Lankan context is still lagging behind. Therefore this research is mainly intended to develop framework which enable evaluating procurement options of WM for the Sri Lankan context. To achieve the aforementioned aim literature survey and questionnaires survey were used as main data collection tools while Relative Importance Index (RII) method and Analytic Hierarchy Process (AHP) multi-criterion decision making tool were used to analyze data. The scope of the framework extends to both micro and macro environments of the related industry. Thus it comprises the criteria of economic, geographical, technological, quality related, service level, legal and social environment. The findings revealed that there are mainly three procurement methods presence in Sri Lankan WM industry namely in house option, outsource option and semi outsource option out of which outsourcing been the widely accepted method. Economic and geographical criteria became the mainly considered criteria when selecting a WM. the developed framework can be used as a guideline for decision making when procuring WM services for an organization within the Sri Lankan context