SELECTION OF WAREHOUSE LOCATION FOR A GLOBAL SUPPLY CHAIN: A CASE STUDY

Warehouse is an important link of the supply chain that stores goods between the time they are produced and the time they are transported to the customer location. For proper functioning of the supply chain, it is essential that the warehouse must be able to cope with the dynamic requirements and in a cost effective manner. Logistics cost depends on the warehouse location and its effective utilisation. For a firm functioning on a global scale, it becomes a prime concern to find an appropriate location for warehouse in other countries in such a manner that it minimises their transportation and storage costs, with optimal network. Recently, the Government of Iran announced various tax incentives to promote industrial activities in Special Economic Zones (SEZs) and Free Trade Zones (FTZs). Therefore, many Indian organisations are trying to exploit available opportunities in Iran. In this context a case of an Indian auto components manufacturing organisation, which wants to expand its supply chain in Iran, has been considered. The objective of this study is to find the most optimal location for a warehouse in the SEZs and FTZs of Iran on the basis of different criteria derived from literature.  Nine criteria influencing warehouse location in the present scenario have been considered and grouped under three categories, i.e. infrastructure, market and government. Conventional methods of warehouse location selection are unable to deal with the ambiguous nature of human decision making. Thus to overcome this difficulty, in this study, fuzzy AHP methodology has been used to compare four location alternatives and to choose the best one for optimisation of global supply chain. Sensitivity analysis has also been done to check the robustness of the model.