An evaluation procedure for materials service centers

A third party logistics practice in using a materials service center to provide a manufacturer the component‐parts management function has become more widely accepted in industry. Due to the long‐term, high investment, and high part variety nature of a material service center operation, a sound evaluation procedure is needed for a potential user of this service to guide its decision making. An evaluation procedure is proposed here for materials service center decisions. The procedure includes five stages, which are to define the objectives, define the specification, identify the alternatives, evaluate the alternatives, and select an alternative. Specific considerations in these stages are discussed. A case study based on a materials service decision of a manufacturing firm is presented in the paper to demonstrate the use of the evaluation procedure.