Toward a PCA-DEA based Decision Support System: A case study of a third-party logistics provider from Tunisia

Abstract

Evaluating the efficiency of Distribution Centers (DCs) is the cornerstone of the assessment of any logistics operator performance. Because of the huge number of potential indicators for the DCs, the main issue herein is how to select appropriately the adequate efficiency indicators. In order to address this concern, this paper presents a real life case study of a third-party logistics service provider (3PL) operating in Tunisia. In this work, we have used the Principal Component Analysis (PCA) approach to select the adequate indicators, followed by a Data Envelopment Analysis (DEA) method to measure the efficiency of each DC warehousing and transport activities. We have gone beyond simply assessing the DCs efficiency by integrating the proposed evaluation framework within a Decision Support System (DSS) that provides decision-makers with dashboards enabling better governance and visibility.