Performance Evaluation of Operational Activities in Logistics Functionality Using F-DEMATEL and F-TOPSIS Approach

Abstract

Logistics plays a significant role in the economy with its main contribution to the gross domestic product (GDP) of many countries. In highly developed countries, logistics costs compared to their GDP range between 8 and 10%. As globalization of trade develops, the importance of improving logistics’ active efficiency is essential for any business enterprise to gain a competitive advantage. Many scholars have so far made great efforts to study logistics functionality, and a large number of relative literature on basic logistics activities of transportation, warehousing, and inventory have been published. Unfortunately, past studies on logistics operational activities are mostly categorized as single research themes of basic logistics activities. Few studies comprehensively considered basic and value-adding activities with entire logistics operational activities. Therefore, for typical multi-criterion decision-making (MCDM), the F-DEMATEL technique is adopted for evaluating the crucial performance indicators of time, cost, quality, service, and innovation to improve the reliability of expert evaluations under uncertain environments in this study. Also, the F-TOPSIS technology is used to calculate all alternatives to help decision-makers develop appropriate operational activities of logistics management. The study result identifies 13 important operational activities of logistics functionality. Besides, the data from a case study of the elite interview is used for validation. The F-DEMATEL is used to obtain the weights of the core criteria. The importance of critical weighted indicators from the F-DEMATEL calculation show “Service” > “Cost” > “Quality” > “Time” > “Innovation”. In addition, the F-TOPSIS is used to prioritize critical activities in logistics functionality. The ranking of the critical basic activities demonstrates that “Transportation/ Distribution” is the most critical logistic activity, followed by “Information” and “Pick and Pack”. Also, the ranking result of the critical value-adding activities shows that “Consignment Stock” is the most critical value-adding activity, followed by “Returns and Quality Control” and “Repair and Maintenance”. Therefore, the logistics managers give priority to the formulation of improvement management based on these ranks. The proposed suggestions of evaluating methods of F-DEMATEL and F-TOPSIS, important 13 crucial activities of logistics, evaluating indicators of logistics activity, and ranks of crucial activities in logistics functionality, thus, make up for a deficiency in previous research that lacks an empirical analysis of the crucial operational activities in logistics functionality.