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Analysis of Warehouse Value-Added Services Using Pareto as a Quality Tool: A Case Study of Third-Party Logistics Service Provider

Author

Listed:
  • Luay Jum’a

    (Logistic Sciences Department, Business School, German Jordanian University, Amman 11180, Jordan)

  • Muath Esam Basheer

    (Logistic Sciences Department, Business School, German Jordanian University, Amman 11180, Jordan)

Abstract

The study aims to analyse warehouse value-added services (VAS) data for a third-party logistics (3PL) service provider, which leads to identifying service improvements and cost-cutting opportunities in performing VAS for clients using Pareto analysis as a quality tool. Using a case study approach, qualitative and quantitative data were collected from a leading 3PL firm in Belgium. The approach is conducted by applying major steps of Pareto analysis. Two pharmaceutical products were analysed according to medical general classification, namely narcotic analgesics (NA) and ophthalmic antihistamines and decongestants (OAD). The results showed that the Pareto principle is proven in the NA—ticketing case, and five activities consumed 83.3 percent of the total time of VAS operations. Furthermore, in the OAD—display case, the Pareto principle is proven and six activities were validated as they accounted for 81.26 percent of the total time of primary VAS operations. The study recommended a solution to each of the four causes of delay, including lack of training/best practices, inefficient space utilization, lack of automation, and lack of cohesiveness and planning. Despite the recognized importance of avoiding warehouse operation inefficiencies, the literature lacks studies applied to practice, and few contributions exist regarding analysing 3PL service providers’ warehousing VAS operations data. This study identified all VAS activities for temperature-controlled pharmaceutical products. Moreover, the study proposes a warehouse operations improvement framework for non-automated 3PL warehouses and guides managers through Pareto analysis to cut costs and improve service level.

Suggested Citation

  • Luay Jum’a & Muath Esam Basheer, 2023. "Analysis of Warehouse Value-Added Services Using Pareto as a Quality Tool: A Case Study of Third-Party Logistics Service Provider," Administrative Sciences, MDPI, vol. 13(2), pages 1-23, February.
    • Handle: RePEc:gam:jadmsc:v:13:y:2023:i:2:p:51-:d:1061330
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    References listed on IDEAS

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    1. Xumei Zhang & Xiaopeng Han & Xiangyu Liu & Ru Liu & Jinzhong Leng, 2015. "The pricing of product and value-added service under information asymmetry: a product life cycle perspective," International Journal of Production Research, Taylor & Francis Journals, vol. 53(1), pages 25-40, January.
    2. Tritos Laosirihongthong & Dotun Adebanjo & Premaratne Samaranayake & Nachiappan Subramanian & Sakun Boon-itt, 2018. "Prioritizing warehouse performance measures in contemporary supply chains," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 67(9), pages 1703-1726, November.
    3. Rivera, Liliana & Sheffi, Yossi & Knoppen, Desirée, 2016. "Logistics clusters: The impact of further agglomeration, training and firm size on collaboration and value added services," International Journal of Production Economics, Elsevier, vol. 179(C), pages 285-294.
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    Cited by:

    1. Eduard Klundt & Neil Towers & Kamal Bechkoum, 2024. "Lean and Agile Supply Strategies in Distribution Centres to Deliver Value-Added Services (VAS)," Logistics, MDPI, vol. 8(3), pages 1-20, July.
    2. Leogrande, Angelo, 2024. "Strategie innovative per la logistica: il valore del kitting e assembly nel settore idrotermosanitario," MPRA Paper 122746, University Library of Munich, Germany.
    3. Luay Jum’a & Marwan Mansour, 2023. "Cruising to Success: Unveiling the Financial Harmony of Container Shipping Firms through Total Quality Management and Service Excellence," Logistics, MDPI, vol. 7(4), pages 1-23, October.

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