Impact analysis of logistics facility relocation using the analytic hierarchy process (AHP)

Facility relocation has a long-term impact on business competitiveness in terms of cost efficiency, service level, and accessibility to marketplace. This paper investigates the impacts of relocating a company’s logistics facility. Specifically, a case study of a logistics service provider for a bank, whose services include cash pick-up and deliveries, and ATM refill, is conducted. Some of the major logistics issues caused by the relocation of the company’s distribution center are identified through process observation and in-depth interview. The analytic hierarchy process (AHP) is implemented to evaluate and rank the importance of the logistics issues according to the needs and requirements of the company’s policy makers. Four criteria considered in the AHP include cost, responsiveness, reliability, and utilization. Results show that, from the company’s perspective, the development of logistics key performance indices is given the highest priority, followed by improvement of internal process, vehicle routing, network design, and inventory management, respectively.