Supply Chain Planning for a Global Consumer Electronics Company: Decision Making on 3PL and Optimization of Warehouse Locations

Lin Ying

Abstract

In today's globalized supply chain practice, it is very important to locate warehouses at the right place to increase efficiency and reduce supply chain costs for enterprises. Logistics supports would be needed to gain a competitive advantage and build sustainable customer relationships. It is essential in supply chain planning to reduce logistics cost and keep it at the optimal level. This study aims to identify the logistics operation of a Global Consumer Electronics Company and optimize the warehouse locations as it expands its business in Malaysia to provide timely delivery to customers and boost its reputation in foreign countries.  Analytic Hierarchy Process (AHP) and Linear Programming on Transportation Problem were adopted in this study for decision making on third-party logistics service providers (3PL) and optimization of warehouse locations. Literature review was conducted to learn more about the existing applications. In the model formulation, all alternatives and criteria for AHP; variables and constraints for Transportation Problems were defined based on the company's concerns and current situation. As a result, the best warehouse location was determined as the Selangor state of Malaysia in the AHP method; Selangor and Sarawak were determined in the Transportation Problems with various transportation costs being obtained.