A systematic methodology for warehouse selection and a case study

In today?s business world, outsourcing applications are becoming more widespread and one of the most outsourced processes is warehousing and distribution center activities. Due to the utilization of utmost technology at most of third party logistics and warehouse suppliers, growing, large or international companies encouraged to make outsourcing decisions of such activities. In spite of many advantages, outsourcing contains many risks as well and inconvenient outsourcing decisions may cause excess of costs and great losses. In firm selection phase of outsourcing decisions, such risks are evaluated in a multi-criteria problem approach. Hovewer there is lack of literature in warehouse and distribution center selection problem. Considering the similarity of supplier selection problem, this study suggests a new systematic optimum warehouse selection methodology based on defined integration level betweeen warehouse operator and buyer firm. In the beginning of the study, detailed and up-to-date information is given about supply chain management, outsourcing applications and warehousing concept. Next, the proposed methodology is defined step by step in a clear and detailed way and an actual case of the proposed methodology, carried out in Procter&Gamble, is explained. In the actual case, selection criteria and integration level betweeen buyer and warehouse is defined by using Sen?s (2007) proposed methodology. In defining qualities and last selection phase fuzzy Analytic Hierarchy Process method is used and optimum warehouse is determined between three alternatives. Key words: Outsourcing, warehouse selection, integration levels, selection criteria