Success Factors in Logistics Outsourcing
Abstract
Business relationships between customer firms and their logistics service providers represent an increasingly important element of today's supply chains and thus, the success of such logistics outsourcing relationships has crucial relevance for the competitiveness of a supply chain. With his three papers on success factors in logistics outsourcing, Alexander de Grahl provides relevant insights regarding this important research question. In detail, adopting different perspectives in the three papers, the work shows how logistics service providers, customer firms and the two parties together can contribute to successful logistics outsourcing relationships. © 2011 Gabler Verlag | Springer Fachmedien Wiesbaden GmbH. All rights reserved.
Chapters (2)
Firms today no longer compete as solely autonomous entities, but rather as supply chains. Within a supply chain, customer firms increasingly look at relationships with their logistics service providers (LSPs) as a way to achieve competitive advantage. In this context, the notion has emerged that firms need to develop close, longer-term relationships – so called relational exchanges – in order to improve performance and to create highly competitive supply chains. However, in the specific logistics outsourcing context, empirical research on the relationships between relational activities and performance is limited. Therefore, using the norms concept, this study develops a conceptual model of selected dimensions of relational behavior and performance in logistics outsourcing relationships. In detail, the direct and indirect effects of flexibility, information exchange, and solidarity on performance in terms of goal achievement and goal exceedance are examined.
This study analyzes 171 logistics outsourcing relationships using a survey and partial least squares (PLS) structural equation modeling to empirically assess the proposed relationships. The results reveal that flexibility and information exchange are strong direct performance drivers. Solidarity also has direct positive effects on performance. However, the majority of its performance influence is channeled through its strong impacts on flexibility and information exchange.
Based on the significant growth in use of logistics outsourcing and the strategic importance of the logistics function in general, it is critical to understand the drivers of successful logistics outsourcing relationships. By empirically analyzing success factors in logistics outsourcing relationships in a series of three papers, this work provides valuable insights regarding this central research question for managers and also makes a significant contribution to the existing empirical research stream in the area of logistics outsourcing.
... In contrary to the field of humanitarian logistics, a number of dedicated studies have investigated success factors for outsourcing in the context of commercial logistics. They highlight the importance of planning the outsourcing engagement up-front and jointly with the provider (Goles and Chin, 2002;de Grahl, 2011;Hauptmann, 2007;Lambert et al., 1999;Selviaridis et al., 2008) and the benefits of establishing close working relationships with open communication and information exchange (Frankel et al., 1996;Goles and Chin, 2002;de Grahl, 2011;Lambert et al., 1999;Leahy et al., 1995;Qureshi et al., 2007;Selviaridis et al., 2008;Tate, 1996;van Laarhoven et al., 2000). They also emphasize the need for aligning expectations, clearly defining requirements and being thorough in the contract negotiations (Frankel et al., 1996;Hofenk et al., 2011;Lambert et al., 1999;van Laarhoven et al., 2000). ...
... In contrary to the field of humanitarian logistics, a number of dedicated studies have investigated success factors for outsourcing in the context of commercial logistics. They highlight the importance of planning the outsourcing engagement up-front and jointly with the provider (Goles and Chin, 2002;de Grahl, 2011;Hauptmann, 2007;Lambert et al., 1999;Selviaridis et al., 2008) and the benefits of establishing close working relationships with open communication and information exchange (Frankel et al., 1996;Goles and Chin, 2002;de Grahl, 2011;Lambert et al., 1999;Leahy et al., 1995;Qureshi et al., 2007;Selviaridis et al., 2008;Tate, 1996;van Laarhoven et al., 2000). They also emphasize the need for aligning expectations, clearly defining requirements and being thorough in the contract negotiations (Frankel et al., 1996;Hofenk et al., 2011;Lambert et al., 1999;van Laarhoven et al., 2000). ...
... This requires to select a service provider which is highly compatible with respect to capabilities, culture and reputation (Frankel et al., 1996;Goles and Chin, 2002;Hauptmann, 2007;Lambert et al., 1999;Leahy et al., 1995). Moreover, it requires the engagement to provide benefits to both parties and to include the mutual sharing of risks (Goles and Chin, 2002;de Grahl, 2011;Lambert et al., 1999;Leahy et al., 1995;Selviaridis et al., 2008). ...
Purpose
The purpose of this paper is to determine best practices of aid agencies for outsourcing logistics to commercial logistics service providers (LSPs) in disaster relief. Moreover, it evaluates the application of the Delphi method for research in humanitarian logistics.
Design/methodology/approach
The paper is based on a two-round Delphi study with 31 experts from aid agencies and a complementary full-day focus group with 12 experts from aid agencies and LSPs.
Findings
The study revealed 12 best practices for outsourcing logistics in disaster relief and a compilation of more than 100 activities for putting these practices into action. Experts consider a proper balance between efficiency and compliance, a detailed contract and a detailed service request most important. Additionally, the Delphi method was found to be a promising technique for research on humanitarian logistics.
Research limitations/implications
By critically examining the Delphi method, this study establishes the basis for a wider application of the technique in the field of humanitarian logistics. Furthermore, it can help to prioritize future research as the ranking of practices reflects the priorities of practitioners.
Practical implications
The paper provides guidance to practitioners at aid agencies in charge of outsourcing logistics.
Originality/value
This research is one of the first in the field of humanitarian logistics to apply the Delphi method. Moreover, it addresses the lack of literature dealing with approaches for building successful cross-sectoral partnerships.
... Indeed, the importance of the logistics outsourcing relationship was asserted in the literature by many authors, for example, Deepen (2007), who highlighted the complexity of outsourcing performance and argued that its true drivers lie in the relationship between service providers and their customers. It was also acknowledged that while many companies outsource their logistics functions, creating a collaborative relationship with third-party logistics service providers remains a challenge (De Grahl, 2012;Chen et al., 2010). Further research on this domain is thus desired. ...
Purpose
This paper aims to examine critical factors of successful logistics outsourcing relationship from the perspectives of both LSPs and shippers employing case studies in Singapore and Vietnam as examples of well-established and growing logistics outsourcing markets.
Design/methodology/approach
The case study design is adopted to empirically examine logistics outsourcing practices. Data were collected through in-depth interviews with senior managers from four cases in Singapore and seven cases in Vietnam. These case organisations are engaged comprehensively in logistics outsourcing activities and encompass both international firms that have their local operations and those local firms whose operations expand internationally.
Findings
Results suggest that the success of logistics outsourcing may depend on five strategic factors and five operational factors, with some of them being the same between LSPs and shippers in both countries and in line with the literature. There also seemed to be a difference between logistics outsourcing practitioners in a developed country (Singapore), and those in a developing country (Vietnam), in which factors, i.e. having the right people and management support, business processes integration and cultural intelligence, tend to be emphasised and practised more in the former. A strategy matrix of logistics outsourcing was mapped accordingly.
Research limitations/implications
The generalisation of this study would require further empirical examination from more quantitative research, for example, the use of surveys with shippers who engage with LSPs.
Practical implications
Findings from this research can assist managers in charge of outsourcing to reflect on their practices and devise and implement appropriate strategies for successful logistics outsourcing. Especially for growing logistics outsourcing markets and not-yet-standardised practices like Vietnam, the findings of this research are significant as they provide policy and managerial insights into how logistics outsourcing can be performed successfully. Specifically, adequate guidelines and resources including training relating to strategic factors of logistics outsourcing must be provided.
Originality/value
This research is one of the first studies that categorise success factors of logistics outsourcing into strategic and operational factors and postulates their conceptualisation in a strategy matrix that can be applied in future research.
... 2. ITO relationships (Kern 1997;Qi 2012;Qi and Chau 2012). 3. ITO success factors (Simmonds and Gilmour 2005;De Grahl 2012;Santos and Silva 2015). ...
This book addresses the buying organizations' perspective on risks, relationships and success factors for accomplishing a successful IT Outsourcing (ITO). Today’s landscape in ITO is complex and these perspectives are important in ITO and therefore there is still a need for it to be further explored. Furthermore the studies concerned the risks, relationships and success factors in ITO need to be extended in more large companies from different countries to better understand how we could improve the ITO in these companies. In order to address this issue the authors of this book have performed different studies that span about 10 years concerning the risks, relationships and success factors in ITO in large companies in Sweden. The authors have focused on both theoretical and practical aspects concerning risks, relationships and success factors in ITO and they have used transaction cost theory, agency theory and core competency theory as main theories to support their research. The data concerning this study has been collected at two different times during the last 10 years with about five years' difference between them. In this way the performed research has enabled a comparison of the data collected on two different periods in time including of the related changes. The book will help researchers in ITO as well as practitioners like ITO decision makers in large companies to understand how to mitigate the ITO risks, improve their ITO relationships and identify the ITO success factors.
... 2. ITO relationships (Kern 1997;Qi 2012;Qi and Chau 2012). 3. ITO success factors (Simmonds and Gilmour 2005;De Grahl 2012;Santos and Silva 2015). ...
This chapter presents the definition of Information Technology Outsourcing (ITO), the importance and trends in ITO, the research problem, goals, and motivations including the delimitations of performing research in ITO in large companies.
... 2. ITO relationships (Kern 1997;Qi 2012;Qi and Chau 2012). 3. ITO success factors (Simmonds and Gilmour 2005;De Grahl 2012;Santos and Silva 2015). ...
In this chapter are described IT outsourcing services, IT outsourcing types, total versus selective IT outsourcing, single versus multiple providers, and how to select IT outsourcing provider. Additionally, this chapter includes the theories in IT outsourcing used in this research and also the risks, relationships and success factors in IT outsourcing that are our research goals.
... 2. ITO relationships (Kern 1997;Qi 2012;Qi and Chau 2012). 3. ITO success factors (Simmonds and Gilmour 2005;De Grahl 2012;Santos and Silva 2015). ...
This chapter presents the contributions, limitations of this research and recommendations for future research.
... Ministries without portfolio were excluded from the study. The survey form used in the study was prepared by making objective-related changes in a questionnaire form used in a previous field study (Gokdere, 2000). The questionnaire includes 23 questions covering IT outsourcing issues, such as why IT departments preferred IT outsourcing, the expectations, benefits and risks from IT outsourcing activities, etc. ...
Outsourcing an IS/ICT function has become fashionable in public administration reform. Through this modality, many organisations are cutting staff costs and increasing efficiency. Financial benefits can be great, public organisations can in fact expand IT usage and hence avoid obsolescence. Despite the benefits of outsourcing IT, there are risks involved. Public organisations need to weigh the benefits, risks and costs involved before making decisions to outsource.
Recently, Turkish public organisations have been increasingly outsourcing functions such as facilities maintenance, catering, security and IS/ICT activities. This article, based on a field study, undertakes an evaluation of the experience of Chief Information Officers (CIO's) in outsourcing of IS/ICT activities in ministerial computer departments. The findings provide important lessons for outsourcing in Turkey and elsewhere. Copyright
In this chapter, an exploration unfolds into the fascinating world of logistics outsourcing, which has undergone a transformational change over the years. Outsourcing logistics services has become increasingly popular among businesses as it offers cost reductions, efficiency improvements, and enhanced core competencies. The logistics outsourcing industry has evolved from 1 to 5PL, with the emergence of 6PL incorporating ML and AI for optimized supply chain processes. Models range from in-house (1PL) to comprehensive services (3PL), with 4PL managing multiple 3PLs and 5PL using technology for end-to-end control. The advent of 6PL marks a milestone, enhancing supply chain optimization. The chapter explores 6PL’s benefits like improved inventory and transportation, cost reduction, and challenges such as data security and provider/system integration. The insights provided in the chapter are valuable for logistics professionals and business leaders seeking to leverage technology to improve their supply chain processes in a rapidly evolving business landscape.
With growing global business competition and complexity in supply chains, firms have recognized that it is not possible to maintain competitiveness in a global market on their own. Therefore, involvement of third-party providers is an important strategic tool to allow companies to focus on their core competencies and access global resources. Outsourcing, therefore, plays an important role in global supply chains.
Outsourcing is sure to grow. Today, supply chain firms are facing a wide variety of alternatives, needing to consider several important considerations before making the right decision. It has therefore become important to understand the phenomenon of outsourcing to better facilitate effective and successful decision-making. These points are relevant, as recent evidence hints at an increasing number of failures in cost management and issues arising out of related partner engagements.
This chapter focuses on outsourcing in the global supply chain, examining its different classifications and characteristics and providing insights into past, current, and emerging concerns in the management of outsourcing processes. Furthermore, this chapter combines theoretical and practical insights, focusing on the main challenges of implementing outsourcing in the supply chain discipline that practitioners and professionals are confronting.
With continued globalization and unpredictable situations like pandemics, outsourcing is forecasted for continued growth. As such, it is not only timely to explore new sourcing dimensions, such as outsourcing 2.0, crowdsourcing, and Industry 4.0 technologies but also to examine sustainable practices for the future of logistics in supply chains.
The paper deals with the analysis of the supply of workplaces and the description of the related activities. Workplaces are supplied using specific supply means. The individual supplies used in the supply system, a description of the main activities and the principle of work are characterized. There are five alternative proposals for improving the supply of production workplaces. A proportional index method was used to select the optimal variant of the supply solution for the production workplaces. The optimal solution proposal is to add the transport lanes in the production hall.
Not all close business relationships are partnerships, nor should they be.
Purpose
– The purpose of the paper is to analyse what roles different relational norms play in long‐term business relationships.
Design/methodology/approach
– The paper uses exploratory factor analysis on a data set of n=297 relationships and identifies two norm dimensions: value‐creating norms and value‐claiming norms.
Findings
– This paper demonstrates that extant empirical research on relational norms and related behaviours is fragmentary and that there is considerable overlap between certain norms. Hence, the dimensionality of the norm concept remains unclear.
Originality/value
– This study contributes to a clearer picture of the norm construct that has been used in a fragmented and selective way in empirical studies in the past.
This article analyzes outsourcing from a knowledge-based perspective. We investigate how knowledge as an organizational resource and the capabilities to manage this knowledge affect the benefits of outsourcing. Our results indicate that the nature of the knowledge of the outsourced activity affects the success of outsourcing. We also analyze the way in which collaborative know-how (as a knowledge resource) and learning capability (as an organizational capability) affect outsourcing benefits. We then test the validity of this hypothesis by surveying organizations from the service sector. The results of the empirical study provide strong support for our assertion that knowledge management affects the results of outsourcing decisions.
In order to be successful in today's competitive environment, third-party logistics providers (3PLs) increasingly strive to develop close, mutually beneficial long-term relationships with customers. The current study identifies inter-organizational conditions and firm-specific factors that influence a firm's partnering behavior with its 3PL. A model of the antecedents and dimensions of partnering behavior is developed and tested with a diverse set of relationships between a focal 3PL and members of its customer base.
Purpose
The objective of this paper is to propose a model for assessing the quality of service at various interfaces of supply chain using third party logistics.
Design/methodology/approach
Based on a rich combination of extensive literature review and insights gained through exploratory interviews, gap analysis methodology is used in developing the model. This was followed by an in‐depth analysis of gaps at various interfaces in supply chain. Further, both qualitative and quantitative techniques are suggested for data collection and analysis.
Findings
The key gaps in both the directions (forward and reverse) that are likely to affect the service quality at different levels are extensively defined. These gaps may exist between a 3PL service provider and the manufacturer, the marketing function and the 3PL service provider, etc. The paper also proposes frameworks such as data envelopment analysis for measurement of these gaps. A set of possible performance indicators is also proposed at various interfaces in supply chain.
Practical implications
This proposed model is an attempt to explore the relatively less explored area. It is expected that this research will further motivate researchers to work in this area. This supply chain service quality tool will be beneficial to practising managers in identification of opportunities for improvements in service quality.
Originality/value
This paper explores some critical issues in the less explored area and offers practical help to researchers and practitioners in providing a direction for supply chain service quality improvement.
This study attempts to infuse relationship marketing theory into the study of logistics outsourcing relationships. In particular, the study demonstrates that not all of the partnerships between customers and providers of third-party logistics services are the same in terms of their level of development. The existence of distinct levels of partnership established previously in the logistics literature is partially supported and a relationship between level of partnership development and the customer perceptions of key relationship marketing elements and outcomes is established. While exploratory in nature, these findings suggest there are benefits for the increased costs of developing closer partnerships.
This article identifies strategic logistics resources acquired and bundled by logistics service providers (LSPs) to achieve competitive advantage. Based on a theoretical framework derived from the resource-based view (RBV) theory, contents of a database of company profiles of 15 selected LSPs are analysed. Results show that all LSPs have been acquiring physical, human, information, knowledge and relational resources and then bundling them together in various specific manners to create inimitable and firm-specific capabilities. However, only some of them performed well financially. The findings contribute to the conceptualisation and measurement of strategic logistics resources and the identification of resource bundling processes.
This article reports on research into the ways European providers of logistics and transport services develop and grow. The strategic behaviour adopted by the leading 20 third-party European logistics service providers (3PLs) between 1998 and 2004 is examined, particularly their approach to mergers and acquisitions (M&A) and logistics alliances. It shows that while growth among 3PLs is aimed at providing more cohesive European logistics coverage, national culture constrains their efforts. More consolidation within the 3PL industry is expected. A few market leaders offer a wide range and scope of services, while most other firms have a diversified portfolio of interests.
Refers to the recent trend to utilize strategic alliances and partnerships for securing both goods and services. Additionally, the supply chain management concept is gaining more acceptance as a method of sustaining a competitive advantage in global markets. Although the literature explores strategic partnerships within both the buyer and supplier context and the shipper and logistics context, there has been little attempt to link these relationships in order to explore multi‐firm interactions. Examines existing buyer‐supplier strategic partnerships and the role of carriers used to transport the particular items sourced within these partnerships through an in‐depth case study methodology of firms engaged in identifiable three‐party relationships. There are two primary objectives of this research: to assess the carriers’ perceived importance and degree of participation within the buyer‐supplier partnerships; and to explore further the relationship between strategic partnerships and supply chain management by presenting more detailed information from firms involved in three‐way relationships. Of interest to carriers, manufacturers, purchasers and academics.
This article evaluates the various longitudinal studies of third-party logistics (3PL) usage and proposes methods and approaches to improve the rigor of future research in this area. Three well-established methodologies for combining the results of multiple studies are reviewed (literature reviews, meta-analysis, and repeated survey analysis), and then considered in application to the findings of the various 3PL usage studies since 1991. Beginning with an overview of the results that emerge from simply combining and comparing the key longitudinal data, the article moves on to a more detailed analysis of the measurement scales, data collection methods, and samples utilized in the different 3PL surveys. The article ends with concrete recommendations for reorienting the ongoing surveys to increase their rigor and validity, and thus increase their predictive value to both academics and logistics managers.
This article examines the findings of a survey conducted during 2004 of large American manufacturers that addressed their use of third-party logistics (3PL) services. The survey data show that the percentage of those companies using such services is at a record high level, and that users are giving a steadily increasing percentage of their logistics operating budgets to 3PL service providers. Many 3PL relationships are long-term in nature, and the service providers continue to deliver value to their clients. The movement of large American manufacturers into other geographies for sourcing, manufacturing, and sales has led many of their 3PL service providers to expand into those areas to support those activities. During the next several years, the possible adoption of radio frequency identification (RFID) technology by many of these manufacturers will pose significant challenges to their 3PL providers in attempting to meet the related needs of their clients.
Research in third-party logistics (3 PL) has expanded rapidly in the past fifteen years, providing a significant amount of empirical, survey-based 3PL research. The authors identify forty-five such papers and then examine topics, methodologies, and analytical approaches to assess opportunities for future research in the field. As is common during the emerging stages of a research stream, the authors find that much of the current 3PL literature has been exploratory in nature. The authors subsequently present several possible directions for enriching the field for both researchers and practitioners, including the integration of extant theory and the use of more advanced methodologies and statistical analyses.
The authors examine the concept of customer benefits in business-to-business markets in an international context. They distinguish between core and add-on benefits, and they discuss product quality, service quality, flexibility, trust, joint action, and commitment of the supplier as determinants of these customer benefits. They base their analysis on 981 respondents in two countries. The results suggest the importance of understanding the determinants in providing customer benefits. Furthermore, the authors observe significant cultural differences with respect to the impact of different determinants on perceived customer benefits. Following a discussion of the results, the authors present managerial implications, research limitations, and directions for further research.
Logistics outsourcing has been at the top of the management agenda during recent decades. Through this approach companies have been able to improve logistics performance. However, several studies point out severe problems with outcome and it is even claimed that in some cases “logistics outsourcing has become a source of corporate failure and disappointment” [Boyson, S., Corsi, T., Dresner, M. and Rabinovich, E. (1999). Managing effective third-party logistics relationships: What does it take? Journal of Business Logistics, 20 (1), 73–100.]. Previous research shows that many companies have taken outsourced functions back in-house. The aim of this paper is to explore the reasons behind the problems in logistics outsourcing. Our analysis is based on an extensive literature survey. This examination indicates that outsourcing decisions require a holistic perspective. We apply the industrial network model [Håkansson, H. and Snehota, I. (1995). Developing relationships in business networks. Routledge, London.] for the analysis of potential consequences of logistics outsourcing. The main conclusion of the paper is that increasing interaction between buyer and provider would be beneficial to the outcome of outsourcing.
Information technology has been among the foremost topics within the logistics literature of recent years. However, there has been little empirical evidence relating logistics information system (LIS) capabilities to logistics competence. Seeks to close this gap in the research, identify particular LIS capabilities that contribute most to logistics competence, and develop an understanding of the relationship between LIS development strategy and logistics competence. A review of the LIS literature identifies relevant issues. The research findings suggest four conclusions: world class firms perceive both their logistics operating and planning systems as highly capable; internally controlled characteristics generally receive higher evaluations than criteria requiring external co-ordination; overall logistics competence is primarily influenced by logistics operating timeliness, usage driven formatting, and flexibility; and LIS development strategy does not significantly influence performance evaluations.
Drawing upon the framework set forth in the Interaction Model developed by the European IMP Group, examines factors leading to close relationships between buyers and sellers. An empirical test, using multiple regression analysis, demonstrates that the exchange of information and interpersonal contacts produce a co-operative atmosphere between buyer and seller which, in turn, sets the stage for mutual adaptation. A model presented and tested affirms the relationships implied by the IMP Interaction Model and suggests managerial actions which should strengthen the links between buyer and seller.
This study presents a two-phase model of interfirm exchange in the logistical supply industry. The first phase uses transaction
cost analysis to identify conditions leading to market-based transactions, unilateral agreements, and bilateral alliances.
The second phase illustrates how formal controls and relational norms yield performance in market, unilateral, and bilateral
governance systems. A test of the model with data from 189 logistical supply relationships suggests that bilateral alliances
emerge through the interaction of user investments in the logistics supplier, supplier logistical services, and marketplace
uncertainty. Bilateral alliances attain desired outcomes through participative management and flexibility. By contrast, market-based
transactions yield desired outcomes through formalization and solidarity. Unilateral agreements gain performance through formalization,
participation, information sharing, and solidarity. Implications for logistics management and theory are discussed.
This study examines relational behavior in business markets, focusing specifically on the extent to which relational behavior by suppliers influences the quality of their relationships with buyers as well as their sales performance with those buyers. Findings from a study involving 454 organizations suggest that several relational behaviors have a significant influence on relationship quality, and that relationship quality, in turn, has a significant influence on the share of business enjoyed by suppliers. Interestingly, the effects of both relational behavior and relationship quality depend on the age of the buyer-supplier relationship as well as the importance of the supplier's offering.
This study contributes to an understanding of plural forms of governance by integrating research on norms-based and control-based mechanisms in managing interorganizational relationships. The authors develop a model of structural antecedents and performance consequences of these two dis- tinct governance forms. Based on data from 129 relationships between U.S. manufacturers and foreign-based independent distributors, the empirical results show a differential effect of relationship structures on the use of control-based and norms- based governance. Furthermore, the results show that these governance forms have distinct performance implications, and the nature of their influence on the effectiveness of the relation- ship varies by the environmental uncertainty in the foreign markets.
Describes the elements of a successful logistics partnership. Looks at what can cause failure and questions whether the benefits of a logistics partnership are worth the effort required. Concludes that strategic alliances are increasingly becoming a matter of survival, not merely a matter of competitive advantage. Refers to the example of the long-term relationship between Kimberly-Clark Corporation and Interamerican group’s Tricor Warehousing, Inc.
Purpose
The purpose of this paper is to examine how goal achievement and goal exceedance influence the aspects of loyalty in logistics outsourcing relationships. Specifically, it aims to develop and test a model of customer loyalty across two cultures to determine if dedicated strategies for building loyalty are required.
Design/methodology/approach
This effort develops a conceptual model that provides a better understanding of the relationship between two dimensions of logistics outsourcing performance (goal achievement and goal exceedance) to loyalty across cultures. The model is then tested using structural equation modeling along with multi‐group analysis.
Findings
The findings indicate that goal achievement strongly influences the loyalty aspects of retention and referrals, but not extension. Meanwhile, all three dimensions of loyalty were influenced by goal exceedance of the logistics provider. Further, goal achievement was found to have a stronger effect on retention only, with goal exceedance demonstrating a stronger influence on extension and referrals. In addition, cultural differences in the model were identified.
Research limitations/implications
Future research should examine more transactional settings as well as other potential moderators that may be consequential to the examination of loyalty formation.
Practical implications
The findings suggest that logistics service providers (LSPs) need to have an appreciation for the differences between goal achievement and goal exceedance as it relates to loyalty formation. In addition, LSPs need to adapt their performance goals based on cultural differences that may exist across their markets.
Originality/value
The close examination of the two dimensions of outsourcing performance on three aspects of loyalty behavior builds on the extant literature. The examination across the two national settings provides yet another contribution of the study.
Although literature emphasizes the importance of creating value for the customer in business-to-business marketing, our understanding of this concept is limited. Against this background, this paper examines the antecedents of customer value within the context of business-to-business relationships. In a departure from previous conceptualizations of value, the paper introduces the concept of core benefits and add-on benefits as well as purchasing price, acquisition costs, and operations costs to the business-to-business marketing literature. The impact of product, relational, and supplier characteristics on the perceived benefits and sacrifices are examined. Results from a survey of 981 purchasing managers across multiple manufacturing product categories in the United States and in Germany provide support for the hypotheses proposed in this paper. Managerial implications and directions for future research are identified following a discussion of the results.
A series of hypotheses, derived from resource-based view (RBV) and extended RBV theory, are developed to assess how boundary-spanning information technologies (BSIT) are perceived to impact performance improvement, measured by order cost reduction, inventory reduction and customer satisfaction. Data are gathered from managers in the food industry to test our hypotheses. The results of our empirical analysis lend support to RBV theory in that we find that the use of BSIT is perceived to be positively associated with performance benefits. We also find that supply chain intermediaries — distributors and retailers — perceive greater performance improvements from BSIT than do manufacturers. The findings are significant in that investments in BSIT can produce important benefits for firm operations, and may forestall potential disintermediation from supply chains. Finally, we find that despite the greater perception of benefits from BSIT by intermediaries, they do not actually invest in BSIT to any greater extent than do manufacturers. This result may suggest that intermediaries are under-investing in BSIT.
Outsourcing plays an important role for firms adopting new technologies. Although outsourcing provides access to a new technology, it does not guarantee that a firm can subsequently integrate the technology with existing business processes and leverage it in the marketplace. This distinction, however, has rarely been made in the literature. In the context of business process enhancing technologies, this study builds on the resource-based and knowledge-based views to study the impact of outsourcing on firms' subsequent performance in the market and their integrative capabilities, that is, a firm's capacity to use and assimilate a new technology with its business processes and build upon it. The study argues that greater reliance on outsourcing may reduce a firm's learning by doing, internal investment, and tacit knowledge applications, thereby impeding a firm's integrative capabilities and performance in the market. The study uses survey and archival data on banks' outsourcing strategies for Internet adoption to test for the performance consequences of outsourcing, which are found to be negative. However, the findings also show that outsourcing is less detrimental for firms with experience in prior related technology. Copyright © 2009 John Wiley & Sons, Ltd.
This study examines how two dimensions of strategic orientation (customer and competitor orientation) influence logistics and market performance. Two capabilities, operational flexibility and collaboration, are studied. Data were collected from manufacturers working with third party logistics providers. The findings suggest that customer and competitor orientations have different influences upon performance when leveraged through the capabilities. Competitor orientation, while having a detrimental direct effect on logistics performance, appears to be the better strategic approach, when supported with operational flexibility since it results in enhanced logistics (efficiency) and market (effectiveness) performance. Customer orientation, on the other hand, greatly improves logistics performance, i.e., internal efficiency.
Managing supply chain interfaces, where information or physical goods are exchanged between one trading partner and another, is a key component of collaborative logistics management (CLM). Identifying the interfaces on which to focus, and describing the attributes and attribute values of these interfaces, fosters effective CLM arrangements.
IN BRIEF
This research provides new insights into logistics alliances by examining the roles of trust and commitment in such relationships. A model of logistics alliances from a buying firm's perspective is proposed and empirically tested using a sample of 339 firms with various types of logistics alliances. The results indicate that both trust and relationship commitment are important elements in logistics alliances. A third party's equity behavior appears to be an important factor affecting the development of trust in a relationship while conflict significantly hinders the development of relationship commitment. The results also indicate that relationship commitment and effectiveness are influenced more by negative outcomes associated with conflict than by positive outcomes associated with trust.
A method for measuring the structure of commercial exchange relationships is developed using contracting norms borrowed from Relational Exchange Theory. The norms are operationalized for a range of industry nonspecific governance structures and empirically evaluated. Results provide support for a multidimensional construction of the governance of commercial exchange relationships.
In this study, we examine the role of seven distinct aspects of a supplier's relational behavior with buyers in business markets. These behaviors are hypothesized to influence buyer satisfaction, and in turn, the share of a buyer's business enjoyed by a supplier. The strength of the linkages between these behaviors and buyer satisfaction are hypothesized to vary depending on the age of the buyer-supplier relationship, importance of the product purchased, and environmental dynamism. Findings from a study involving 454 organizations suggest that several relational behaviors have a significant influence on buyer's satisfaction with suppliers, and that buyer satisfaction is positively related to the share of business enjoyed by suppliers. Further, the age of the buyer-supplier relationship, and product importance appear to moderate the strength of the linkages between these behaviors and buyer satisfaction.