Performance analysis of logistics hubs: a combined approach using DEA, modified DEA and cross-efficiency

PurposeLogistics hubs, also known as distribution centres, play a pivotal role in the efficient functioning of the supply chain. This study aims to assess the performance of fourteen distribution hubs of a logistics company. The primary objective is to provide actionable insights that enhance overall supply chain efficiency by employing a robust evaluation framework.Design/methodology/approachThe study utilizes data envelopment analysis (DEA), modified DEA (MDEA) and cross efficiency to evaluate the performance of the hubs. DEA is used to identify efficient and inefficient decision-making units. MDEA is then employed to rank the efficient hubs, and these rankings are compared with those obtained through peer-to-peer performance evaluation using cross-efficiency. Slack analysis provides measures for improving the performance of inefficient hubs.FindingsThe results reveal a subset of hubs operating at maximum efficiency, which serve as benchmarks for the logistics industry. MDEA establishes a hierarchy among the efficient hubs, offering insights into their relative performance. Slack analysis highlights specific areas where inefficient hubs can improve, providing actionable recommendations to enhance their operations and overall supply chain efficiency.Research limitations/implicationsThe findings of this study offer actionable recommendations for logistics companies to enhance the efficiency of their hubs, particularly the inefficient ones. By identifying benchmarks and proposing improvement measures through slack analysis, the study provides valuable strategies for optimizing supply chain operations.Originality/valueThe novel use of DEA and MDEA for ranking hubs and comparing these rankings with cross-efficiency results provides unique insights into the relative performance of efficient hubs.