AN APPLICATION OF THE ANALYTIC HIERARCHY PROCESS (AHP) TO DEVELOP A TRANSPORTATION MANAGEMENT SYSTEM (TMS) SELECTION MODEL FOR LOGISTICS ENTERPRISES IN HO CHI MINH CITY

Abstract

Digital transformation in the logistics industry has increased the demand for Transportation Management Systems (TMS) to optimize operations, reduce costs, and improve service quality. However, selecting an appropriate TMS is a multi-criteria decision-making problem, as firms must simultaneously consider factors related to functionality, cost, service support, and vendor characteristics. This study aims to develop a set of criteria for TMS selection and applies the Analytic Hierarchy Process (AHP) to determine the relative importance of these criteria and rank alternative software solutions for logistics enterprises in Ho Chi Minh City. The criteria were developed based on a literature review and interviews with eight experts, resulting in four main groups and sixteen sub-criteria. Pairwise comparison matrices were constructed and analyzed, with all consistency ratios (CR) below 0.1, ensuring the reliability of the results. The findings indicate that the functionality group has the highest weight (0.4547), followed by the cost group (0.2630). Among the sub-criteria, “Cost suitability” has the highest global weight (0.1290). When evaluating three TMS alternatives, coded as TMS1, TMS2, and TMS3, the results show that TMS1 is the most preferred option, followed by TMS2 and TMS3. The study provides a quantitative decision-making framework that supports logistics firms in Ho Chi Minh City in selecting suitable TMS solutions in the context of digital transformation.