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  • Richfield Graduate Institute of Technology

Abstract and Figures

The role of third party logistics service providers (3PLs) in emerging markets are changing, impacting their value adding role as orchestrators within supply chains. 3PLs are changing in terms of their engagement with customers, the services that they render and the way that they add value to their customers. The purpose of this generic qualitative study was to explore the orchestrating role of 3PLs in the United Arab Emirates (UAE). Eleven participants from five organisations took part in semi-structured interviews. In the emerging market, 3PLs act as orchestrators by creating value in terms of process capability, supply chain visibility, operational neutrality and customer collaboration. The study shows that 3PLs' views of value creation in the UAE are embedded in logistics capability. most emphasis of value creation is placed on fostering supply chain visibility and promoting customer collaboration. The study contributes to the existing body of knowledge in terms of 3PL orchestration. It highlights strong similarities to developed markets regarding customer collaboration and supply chain visibility, but differs in terms of process standardisation when it comes to creating value as a 3PL orchestrator. Organisations can benefit from the research findings to leverage the capabilities of 3PLs to their advantage. 3PLs may benefit from knowing which attributes contribute to value creation in the local market toward advancing their role as orchestrators of supply chains in the UAE.
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e role of third party logistics service providers
(3PLs) in emerging markets are changing,
impacting their value adding role as orchestrators
within supply chains. 3PLs are changing in terms
of their engagement with customers, the services
that they render and the way that they add value
to their customers. e purpose of this generic
qualitative study was to explore the orchestrating
role of 3PLs in the United Arab Emirates (UAE).
Eleven participants from ve organisations
took part in semi-structured interviews. In the
emerging market, 3PLs act as orchestrators by
creating value in terms of process capability,
supply chain visibility, operational neutrality
and customer collaboration. e study shows
that 3PLs’ views of value creation in the UAE are
embedded in logistics capability. Most emphasis of
value creation is placed on fostering supply chain
visibility and promoting customer collaboration.
e study contributes to the existing body
of knowledge in terms of 3PL orchestration.
It highlights strong similarities to developed
markets regarding customer collaboration and
supply chain visibility, but diers in terms of
process standardisation when it comes to creating
value as a 3PL orchestrator. Organisations can
benet from the research ndings to leverage the
capabilities of 3PLs to their advantage. 3PLs may
benet from knowing which attributes contribute
to value creation in the local market toward
advancing their role as orchestrators of supply
chains in the UAE.
Keywords: Emerging markets, supply chain or-
chestration, third party logistics, United Arab
In the annual Agility Emerging Markets Logistics
Index of 2016, the UAE is ranked, aer China,
as the second fastest growing global emerging
market with a gross domestic product of over
$300 billion (Agility, 2016:5). Within this market,
3PLs continue to play a major role within global
supply chains and within the region (Agility,
2016:5). Early in the new millennium, the 3PLs
in the UAE have grown substantially, both in
terms of capacity and size, and their role in
local organisations therefore has to be better
understood (Sohail, Anwar, Chowdhury &
W. Niemann
University of Pretoria
Pretoria, South Africa
A. Meyer
University of Pretoria
Pretoria, South Africa
T. Kotzé
University of Pretoria
Pretoria, South Africa
J. Odendaal
University of Pretoria
Pretoria, South Africa
Farhat, 2005:23).
Azad, Dhayanidhi and Narashiman (2011:34)
state that the contemporary role of 3PLs in
organisations ranges from basic outsourced
contract logistics to advanced engagement with
organisations, acting as orchestrators, integrators
or Fourth Party Logistics service providers (4PLs)
within organisations’ supply chains. ere has not
been much research done over the past decade
on 3PLs engagement with organisations in the
UAE (Azad et al., 2011:35). 3PLs in the UAE have
mainly specialised in traditional logistics oerings
such as warehousing, traditional transport and
freight forwarding (Azad et al., 2011:35; Sohail
et al., 2005:23). As many as two-thirds of the
organisations in the UAE are reported to make
use of 3PL services, indicating the importance
of 3PLs within the region (Azad et al., 2011:33).
Globally, the roles that 3PLs play and the value that
they add in supply chains are many and varied.
For instance, they can play a transactional role in
order to reduce a rms supply chain costs or to
improve services (Heiyantuduwa, Wannisingha
& Rupasinghe, 2015:2).
Organisations can strategically outsource
multiple functions of their business to 3PLs where
the 3PL plays a relational role that focuses on a
partnership for strategic advantage (Jayaram &
Tan, 2010:264; Nemoto & Tezuka, 2007:5). 3PLs
can also play a more advanced role where they
act as a customer developer or logistics integrator
where the internal resources might be lacking
within a rm (Hertz & Alfredsson, 2003:141). A
3PL rm can take on the role of an orchestrator
that manages and coordinates the value creation
network, similar to that of a 4PL service provider
(Zacharia, Sanders & Nix, 2011:40).
3PLs play an important role within organisations
supply chains in the UAE (Langley, 2016:4).
Network orchestration is dened as a hub rm
acting as a coordinator of logistics network
activities (Dhanaraj & Parkhe, 2006:662; Zacharia
et al., 2011:40). Network orchestration adds value
to an organisation through integration rather than
specialisation, by eectively balancing control
with enablement of customers and suppliers
(Fung, Fung & Wind, 2009:299). 3PLs have been
acting more as supply chain orchestrators by
coordinating supply chain activities (Langley, van
Dort, Ang & Sykes, 2005:105). (Langley, 2016:18)
states that 3PLs increasingly play a vital role in
supply chains and that the strategic orchestration
of activities along the supply chain is becoming
more critical.
3PLs are required to play a more dynamic role
within these emerging markets as orchestrators
of supply chain activities (Liu, 2014:404).
Understanding this role will expand the existing
body of academic knowledge in exploring the
role of 3PLs in emerging markets. e logistics
industry can benet from this knowledge by
understanding the evolving role of 3PLs within
emerging markets.
Zacharia et al. (2011:40-54) introduced a model
that can be used to dene how value is created by
3PLs and how their role within an organisations
supply chain can be understood. e model
denes how value is added to an organisation in
the transportation industry within a developed
market. It illustrates value creation, built additively
on four elements, namely: standardisation,
visibility, neutral arbitrator and collaborator,
which dened a 3PL as an orchestrator. Min,
DeMond and Joo (2013:65) highlight the
limitation of the above mentioned study’s
regional focus and mentions that the model could
be applied to emerging markets. Liu (2014:404)
states that there is a gap in research as to what
the role of 3PLs as supply chain orchestrators is,
especially in growing markets like China. e
same could be said for other emerging markets
like the UAE.
e purpose of this generic qualitative study was
to explore the orchestrating role of 3PL service
providers in the UAE and determine how 3PLs add
value to the organisations they provide services
to. e study replicated the study of Zacharia
et al. (2011:40-54) in the logistics industry in
the UAE. e study’s purpose was achieved by
understanding existing 3PL organisations’ views
on the value adding role that they play within the
emerging UAE market. e research involved
semi-structured interviews with senior managers
from several 3PLs in the UAE.
e study aimed to answer the following research
• How can the orchestrating role of 3PL service
providers in the UAE be dened in terms of
their value creation?
• What are the factors that inuence the
orchestrating role of 3PLs in the UAE?
• How do 3PL organisations view value creation
in the UAE?
• What are the attributes that 3PLs contribute
to value creation in the UAE?
e study adds value by enhancing the academic
understanding of how 3PLs add value to
organisations in emerging markets by expanding
on the regional study done by (Zacharia et al.,
2011:40-54). It also contributes to the body of
knowledge in that the orchestrating role of 3PLs
is dierent in comparing emerging and developed
markets and can guide further research toward the
better understanding the contemporary role that
3PLs have within such markets. Organisations
that make use of 3PL services can benet from
the research ndings to leverage the capabilities
of 3PLs to their advantage. 3PLs will benet from
knowing which attributes contribute to value
creation in the local market toward advancing
their role as orchestrators of supply chains in the
3PLs provide outsourced logistics services and
play the role of movers of goods between the
buyer and the supplier in today’s supply chains
(Crum & Daugherty, 2011:23). e evolving
roles and nature of 3PLs within supply chains are
examined further in the subsequent sections of
this literature review.
Roles of 3PLs in supply chain management
3PLs can be dened as the outsourcing of
logistics activities as a service to independent
organisations who are neither consignors nor
consignees (Omotayo & Melan, 2015:3). Table 1
summarises studies which describe and/or dene
the roles that 3PLs have within organisations’
supply chains. Hertz and Alfredsson (2003:4)
state that a 3PL organisations role in a supply
chain and the subsequent value that it adds can be
standard, a service developer, a customer adaptor
or a customer developer. is classication
scheme was re-evaluated by Vasiliauskas and
Jakubauskas (2007:71), who state that the value
that 3PLs add to organisations are rather linked
with information and knowledge compared to
traditional service oerings. e researchers used
the above mentioned classication scheme as well
as their own interpretation of the literature which
have been reviewed, and divided each into the
following ve categories as summarised in Table
1 and described below:
• Core competency (i.e., organisations
outsourced logistics functions to focus on
their internal core competency);
• Functional outsourcing (e.g., transport,
warehousing, inventory management);
• Complementary roles (e.g., inventory control,
• Strategic or collaborative partnerships;
• 4PL, integrator, orchestrator (i.e., 3PLs role of
overseeing and overall management of supply
chain functions).
Section 2.1.1 through 2.1.4 discuss the roles of 3PL
service providers in terms of core competency,
functional outsourcing, complementary and
strategic or collaborative partnerships.
Core competency role of 3PLs
According to Min and Joo (2006:259),
organisations that have developed logistics
competency outsource functions such as
warehousing and distribution to focus more on
their central and core business competencies.
is was done in an eort to improve their service
oering, gain a competitive advantage through
market share and save costs within their respective
supply chains (Min & Joo, 2006:259; Stank, Davis
& Fugate, 2005:29). e core competency role
refers to the fact that organisations that have
insourced logistics competency would consider
to outsource these logistics functions to 3PLs.
Hilletoh and Hilmola (2010:47) state that the
integrated warehousing and transportation
services provided by 3PLs have to be scaled and
customised to t customers’ needs in order to
be more ecient in core service provision. Most
3PLs have core and specialised service oerings
to dierentiate themselves, adding value through
oering services such as packaging recycling and
Basic and intermediate roles Advanced
roles (e.g.,
Strategic or
(Gattorna, 2003) X
(Stank, Davis &
Fugate, 2005) X
(Bottani & Rizzi,
2006) X X
(Min & Joo,
2006) X
& Setaputra,
(Naim, Potter,
Mason &
Bateman, 2006)
(Selviaridis &
Spring, 2007) X X X
& Jakubauskas,
2007) X X
2009) X
(Hilletoh &
Hilmola, 2010) X X
(Crum &
Daugherty, 2011) X X
Sanders & Nix,
(Chu & Wang,
2012) X
(Pinna & Carrus,
2012) X
(Schmoltzi &
(Vivaldini &
Pires, 2013) X
(Su & Ke, 2013) X
(Jayant, 2013) X
X *Reverse
Logistics X
(Sweeney et al.,
X *Vertical
(Saglietto, 2013) X
2014) X
(Omotayo &
Melan, 2015) X
(Huo, Ye & Zhao,
2015) X X
(Abidi, de Leeuw
& Klumpp, 2015) X
(Yang & Zhao,
2016) X X
Source: Authors’ own compilation
call centre activities (Aguezzoul, 2014:70). 3PLs
can take on this role where organisations want
to outsource a part of their business that would
otherwise be a core role within their organisation.
Functional outsourcing role of 3PLs
Aguezzoul (2007:7) argues that over and above
organisations outsourcing logistics functions
such as warehousing and packaging recycling
as core competencies, they outsource these
logistics functions as a non-core business activity.
e functional outsourcing role implies that
organisations outsource a logistics service as a
bolt-on service within their supply chain 3PLs,
which doesn’t form part of an organisations
core competency. Bottani and Rizzi (2006:296)
found that outsourced logistics services mainly
play a value adding role in organisations by
providing basic services such as transportation,
warehousing and freight forwarding, and can also
include manufacturing. e main roles that 3PLs
have played in 2007 have been transportation and
warehousing, which contributed over 61% and
35% respectively of the services that have been
outsourced in the European market. Nearly all
studied organisations made use of functionally
outsourced transportation and warehousing
services in 2009 (Hilletoh & Hilmola, 2010:51).
Some of these and other basic roles are summarised
in Table 2. e stereotypical functional roles that
3PLs have played are transportation, warehousing,
freight forwarding, inventory management,
packaging and reverse logistics. ese roles were
functionally outsourced logistics services to 3PLs
(Vasiliauskas & Jakubauskas, 2007:71).
Complementary role of 3PLs
3PLs can take on the role of providing
complementary service oerings. ese
services supplement traditional services,
such as warehousing and transportation, and
organisations can outsource certain logistics
functions that are complementary to their
business, such as information and communication
technology, order postponement and co-packing
operations (Hilletoh & Hilmola, 2010:47;
Omotayo & Melan, 2015:3). In addition to some
of the functional outsourced logistics functions
mentioned in Section 2.1.2, 3PLs aim to increase
their service oerings and capability within the
supply chains in which they operate in terms
of information technology competency (Naim,
Potter, Mason & Bateman, 2006:296; Omotayo
& Melan, 2015:5). ese complementary service
oerings may add value to organisations in terms
of the role of outsourced 3PLs services.
Strategic or collaborative role of 3PLs
is role of a 3PL within some organisations
is strategic in nature, where organisations
collaborate with 3PLs rather than just
outsourcing functional logistics services. In an
eort to increase competency and capability
within their supply chains, many organisations
have partnered with 3PLs to gain advantage over
their competitors (Huo, Ye & Zhao, 2015:161-
163). Strategic partnering between organisations
and 3PLs have been well established in areas like
reverse logistics provision to improve product
quality and reduce cost (Govindan, Soleimani &
Kannan, 2015:609). Organisations would partner
strategically with certain 3PLs in order to expand
into unfamiliar markets or to consolidate their
logistics operations into centralised distribution
hubs (Hilletoh & Hilmola, 2010:47).
Logistics processes Activities
Road rail air sea, intermodality management
Package express carrier
Customs brokerage
Perishable/hazardous goods management
Freight bill payment/audit
Order fullment and processing
Post-production conguration
Installation of products at customer’s site
Warehousing storage
Perishable/hazardous goods
Inventory management
Slotting/lay out design
Location analysis
Storage/retrieval management
Assembly and packaging
Reverse logistics
Pallets ows management
Recycling, reuse, remanufacturing disposal
Repair, testing and products servicing
Return shipment management
Source: Adapted from Bottani and Rizzi (2006:297).
ese contemporary challenges in terms of
supply volatility and contractual uncertainty have
led to uncertainty in the relationship between
organisations and 3PLs (Yang & Zhao, 2016:215)
e of role strategic partnering between 3PLs and
organisation has expanded into a competitive
market, to support the organisational engine
for growth (Yang & Zhao, 2016:212). is has
changed the relationship between an organisation
and a 3PL from transactional to a strategic
partner (Crum & Daugherty, 2011:19). In order
to maximise eciencies in an organisation’s
supply chain activities, organisations tend to
have a closer relationship or alliance with 3PLs
(Rinehart, Eckert, Handeld, Page & Atkin,
e more advanced roles that 3PLs have in
terms of service oering and engagement with
organisations are discussed in the next section
and the notions of 4PLs, supply chain integrator
and orchestrator are reviewed.
Advanced Roles of 3Pls in Supply Chain
e terms fourth party logistics, supply chain
integrators and supply chain orchestrators have
been used interchangeably in both academic
literature and in the supply chain industry. e
next four sections highlight some key similarities
and dierences between these terms in order
to better understand their meaning and their
subsequent role in supply chain management.
Fourth party logistics (4PLs)
3PL outsourcing can be dened as the practice of
outsourcing logistic activity that was previously
insourced (Gao, 2013:23). is diers from
outsourcing to a 4PLs which revolves around
organisations outsourcing the integration of
resources, capabilities and technologies to other
organisations to manage supply chain solutions
on their behalf, or rather the management and
integration of activities performed by multiple
3PLs (Büyüközkan, Feyzioğlu & Şakir Ersoy,
2009:113). It can also include a joint venture
between a group of organisations that ultimately
controls the supply chain with multiple supply
chain partners (Gattorna, 2016:16). (Saglietto,
2013:112) denes a 4PL as an independent rm
that coordinates the whole logistics function
of a client and integrates contracted or own
resources to manage complex value chains on
behalf of its client(s). Table 3 highlights some key
dierentiating characteristics between traditional
3PL and 4PL service providers. In reference to
Table 3, a typical 3PL is one that is asset heavy
with internal systems capability, whereas a 4PL
integrates the functions provided by a 3PL and
manages a whole supply chain. Comparing the
characteristics of the evolution from 3PLs to 4PLs
in Table 3 is key to understanding the evolving
role that they have played in organisations.
Types Key Characteristics
Supply chain visionary
Supply chain planner and optimiser
Deal shaper and maker
Supply chain re-engineers
Project management
Service, system and information
Continuous innovation
Integrated warehousing and
IT infrastructure provision and support
Localised data tracking
Asset owner and asset buyer
Warehouse Management Systems
Source: Adapted from (Gattorna, 2003:470)
Some 3PLs have grown into 4PL organisations
where the shi from 3PLs to 4PLs is a progressive
consequence of diversication of services and an
evolutionary process of services that 3PLs provide
(Kasperek, 2013:25).
Supply chain integrator
According to Pinna and Carrus (2012:105),
4PLs are dened as supply chain integrators
of logistic capability and technology. A supply
chain integrator is one that synthesises and
manages its own resources and technology with
complementary services of others that delivers
complete supply chain solutions (Pinna &
Carrus, 2012:107). Mukhopadhyay and Setaputra
(2006:718), mentioned that a 3PL can add value to
an organisation by being an integrator of dierent
services on behalf of an organisation; one who
is neutral between logistics partners such as
managing a transport management process. e
role of 3PLs as orchestrators is discussed in more
detail in Section 2.2.3 and the gap in the denition
of this role is highlighted.
Supply chain orchestrator
e role of a 3PL to manage information ow and
product movement across multiple stages within
supply chains has evolved over the years to act as
an orchestrator within supply chains (Schmoltzi
& Wallenburg, 2012:53). Zacharia et al. (2011:44)
dene an orchestrator in a supply chain as one
that facilitates supply chain management best
practices and manages and coordinates supply
chain activities. Modern 3PLs have been evolving
into integrators and orchestrators of global supply
chains (Fung et al., 2009:238). In the literature
that was reviewed, the advanced role that 3PLs
have within organisations’ supply chains, when
dened as 4PL, orchestrator or integrator is found
to have a semantic overlap. e term supply chain
orchestrator will be used to refer to all three these
advanced roles in supply chain management.
Azad et al. (2011:29-43) conducted an extensive
review of the literature on the global roles that 3PLs
play in organisations and where, how, and why
3PL services are utilised by these organisations
in terms of their outsourcing arrangements. e
research did not focus on developing a model to
represent the value that a 3PLs adds as a supply
chain orchestrator. Büyüközkan et al. (2009:29)
created a decision-making framework that can
be used to select the appropriate supply chain
orchestrator that will add the most value to
an organisation. is framework has also not
dened the value that a 3PL adds as a supply
chain orchestrator. A clearer understanding of
3PL orchestration and the value it adds to its
customers is necessary in order to explore this
type of role that a 3PL plays within organisations
supply chains. Section 2.2.4 discusses this type of
advanced role in more detail.
e role of the 3PL service provider as an
Zacharia et al. (2011:40-54) suggest that 3PLs
have progressed from not only having logistics
capabilities to becoming orchestrators of supply
chains that create and maintain a competitive
advantage. e model introduced by Zacharia
et al. (2011:40-54) depicted in gure 1 is used to
dene the orchestrating role of a 3PL within an
organisations supply chain. e focus industry of
the model was the transportation niche service
within a single, mature rm in the United States
of America (USA), and was used successfully to
dene the value creation of an orchestrating 3PL
in a mature market.
e model is built on three socio-economic
theories as well as existing literature where four
interrelated elements are used to describe a 3PL
as an orchestrator within a supply chain. e
three socio-economic theories as pillars for the
model are:
Transaction cost economics
TCE within organisations relates to business
decisions in terms of ownership that minimise
overall transaction costs (Williamson, 1989:137).
In terms of outsourcing to a 3PL, an organisation’s
decision to do so will rest on reducing transaction
costs (Zacharia et al., 2011:41). TCE implies that
as long as there exists a cost benet to outsource
to 3PLs, it makes sense to do so, which in turn will
enable 3PL orchestration (Williamson, 2010:686).
Resource-based theory
RBT suggests that in order for an organisation to
survive and improve its operational performance,
it must have the right type of bundled resources,
eciently securing ow between them
(Rungtusanatham, Salvador, Forza & Choi,
2003:1086). On this premise, the outsourcing of
certain functions to a 3PL is supported (Zacharia
et al., 2011:42). RBT suggests that by making use
of the services of a 3PL, an organisation can gain
access to complementary resources to enhance its
competitive advantage (Jayaram & Tan, 2010:264;
Zacharia et al., 2011:42). is enhancement
of competitive advantage is gained mainly by
organisations that focus on boundary spanning
integration through outsourcing mechanisms
(Jayaram & Tan, 2010:265).
Network theory
NT proposes that through relationship building
and network coordination, an organisation can
manage its supply chain through an outsourced
arrangement as a single entity (Johansson,
2012:20; Snehota & Hakansson, 1995:6). In
terms of 3PLs, NT focuses on the formation
of relationships, organisational structures and
alliances, where organisations can take advantage
of network-wide relationships (Zacharia et al.,
2011:42). In 3PL collaborations, NT motivates
that competitive advantage can be gained by
the increased exibility and service that 3PLs
provide (Fulconis, Hiesse & Pache, 2011:63).
According to the model introduced by Zacharia
et al. (2011:40-54), the four interrelated elements
used to describe a 3PL as an orchestrator within a
supply chain are:
Standardisation refers to standardised processes
and data within a supply chain. is adds value
by simplifying the process of information across
supply chain partners to improve supply chain
visibility and is a prerequisite for the ecient
functioning of a 3PL (Zacharia et al., 2011:45).
Visibility means information visibility across a
supply chain and the capability to have a view
beyond immediate supply chain tiers such as
customers or suppliers. A 3PL requires multi-
tiered supply chain visibility in order to be an
orchestrator (Zacharia et al., 2011:45)
Neutral arbitrator
When a 3PL acts as a neutral party between supply
chain partners, it is considered a neutral arbitrator.
is element of neutral arbitration adds value to
customers by being unbiased change agents and
playing a neutral role regarding information
sharing and industry benchmarking (Zacharia et
al., 2011:45).
3PLs create value to their customers by
promoting collaboration between supply chain
partners which can create better co-operations
between supply chain partners. 3PLs can foster
collaboration such as knowledge transfer and
shared facilities without posing any risk of
information sharing between supply chain
partners (Zacharia et al., 2011:46).
e model suggests that these four characteristics
are additive in nature, meaning that a 3PL cannot
be an orchestrator without all four characteristics.
A 3PL increases value creation within the supply
chain through a higher degree of standardisation
that improves visibility. Better visibility then
positively impacts a 3PL being a neutral arbitrator
leading to improved collaboration. e model
for 3PL orchestration is provided in Figure 1
illustrating the four orchestrator characteristics
that dene a 3PL as an orchestrator in a supply
network that leads to value creation within the
Research design
In order to gain a better understanding of
the value-adding role of 3PLs in the UAE, a
qualitative design approach was used. e
participants’ opinions and perceptions were asked
on specic matters relating to contemporary 3PL
engagements within an emerging market. ese
opinions were interpreted in order to gain insight
into the existing theory of the role of 3PLs in an
emerging market (Merriam, 2009:14). Qualitative
research is best suited to describe social
interactions of a few people or groups of people
(Bryman & Bell, 2007:418). Generic qualitative
research design is characterised by collecting
qualitative data through interviews with people
and using thematic analysis to analyse the data
(Plano Clark & Creswell, 2014:289). e design
was chosen as the best approach for this research
study since individuals were to be interviewed,
their opinions collected as data around specic
research questions and analysed with the use of
thematic analysis to explore the value-adding role
of 3PLs in the UAE.
e unit of analysis were the participating 3PL
organisations whose main business activity
is to provide logistics services. e study was
conducted within the 3PL industry in the UAE.
e participating organisations’ distribution
hubs are situated across dierent Emirates, with
the majority of the organisations’ head oces
located in Dubai. e market or industry is non-
specic and includes various sectors such as the
food and beverage, fast moving consumer goods,
construction, technology and pharmaceutical
e method of sampling that was used is criterion-
based sampling. Criterion-based sampling, a
form of purposive sampling, was used to select
the individual participants in that it depended
on certain criteria which were determined by
the purpose of the study (Daymon & Holloway,
2010:159). An aim of this type of purposive
sampling is to allow for some diversity within the
sample selection criteria in order to investigate
the impact of the characteristic concerned and
helped select specic organisations that t the
role in industry as a 3PL (Ritchie, Lewis, Nicholls
& Ormston, 2013:79). Organisations were chosen
that assume the responsibility of several logistics
functions of a client such as those summarised
in Table 2 in the UAE. e selected organisations
varied in size and footprint within the region.
Heterogeneous sampling involves selecting
individuals or groups of individuals that dier
from one another to gain maximum variation
in the samples (Daymon & Holloway, 2010:161).
In this way the participating organisations vary
in the scope of services oered, industry served
and size of the organisation. An advantage to this
approach is that it provides a broad spectrum
of participating organisations across dierent
industries that provide specic insights into their
potential role as an orchestrator within their
respective supply chains in an emerging market.
e disadvantages are that it is not industry
specic, nor size dependent, which may lead to
a distortion of the role the 3PLs play in emerging
markets. A total of ve organisations were chosen
to participate in the study. Table 4 highlight their
main service oerings.
e criteria used to select the individual
participants of the study was based on having
at least a managerial level position in the
organisation as well as knowledge of the service
oerings of that organisation, in order to have
homogeneity across the participants. At least
two participants per organisation were chosen to
add diversity to the sample criteria (Ritchie et al.,
2013:79). e participants and their representative
organisations, together with their participant IDs
as pseudonyms and job titles are listed in Table 5.
A gauge for ensuring data saturation is proposed
by Guest, Bunce and Johnson (2006:79) stating
that with good quality, homogeneous data, 12
participants should be sucient to achieve
saturation. Data saturation occurred aer 9
participants although 11 participants were
interviewed as is presented in the ndings. No
new information would thus be learnt from
involving more participants and collecting more
data (Polit & Beck, 2012:521).
ID Main service oerings
C01 Warehousing, distribution,
total supply chain management
Warehousing, full scope of
SC solutions with integrated
IT solutions, land, sea and
air distribution, value added
services, material purchasing
Warehousing, value added
services, freight forwarding,
Warehousing, freight
forwarding, logistics
investment consulting,
strategic market entry
consulting, distribution
Warehousing, integrated
managed SC solutions,
distribution, freight
forwarding, customised SC
solutions, transportation
management services
Source: Authors’ own compilation
Data collection
e data for this study was collected through semi-
structured interviews conducted with subject
matter experts and senior managers from 3PL
organisations within the UAE. Semi-structured
interviews do not follow specic guidelines or
parameters; for this reason, the generic approach
is best suited for this research (Kahlke, 2014:38).
is gave the necessary insights into their
social experiences to aid the research objective.
Interviews are verbal and oen in person
interactions with groups or individuals that act as
an organisational representative, in order to gain
more insight to their views and perceptions on
a particular matter (Rowley, 2012:260). Rowley
(2012:262) also states that interviews are good
ways to obtain an in-depth view on the matter in
question. Conducting these focused interviews
provided a thorough insight into the role of 3PLs
in the UAE.
Of the 11 interviews conducted, four were
telephonic and seven were face-to-face. All
interviews were audio recorded and transcribed
by a professional service provider supported by a
two-step verication process, to ensure the quality
the transcripts, which involved a second review
of the transcription by another transcriber. e
transcriptions were done within one week of each
interview. As indicated in Table 5, the interviews
ranged from 30 to 60 minutes, with an average
length of 46 minutes.
In preparation for the main interviews, a pilot test
was done with one participant who has had over
20 years’ experience in the eld of supply chain
management in order to test the discussion guide.
Minor changes were made to the discussion guide
to clarify certain statements aer the pre-test. e
line of questioning as per the discussion guide,
was asked in line with the interview questions
used by Zacharia et al. (2011:51). Each question
was followed by sub-questions to probe the
participant if necessary, in order to delve deeper
into the rst answer and the participant was
not interrupted whilst answering. is line of
questioning was continued until the highest level
of value was determined for each attribute or the
response from the participant was exhausted.
Data analysis
A thematic approach was followed to analyse the
interview data. is method of analysis involves
the systematic identication and organisation of
data to identify recurring themes in the data set
(Braun & Clarke, 2012:57).
Six phase approach to TA
Phase 1: Familiarisation with the data
Phase 2: Coding the data
Phase 3: Searching for themes
Phase 4: Reviewing themes
Phase 5: Dening and naming themes
Phase 6: Producing the report
Source: Adapted from Braun, Clarke and Terry
is approach provided a good understanding of
recurring themes. Table 6 lists the six phases in
the thematic analysis approach used in the study.
e main terms used during qualitative data
analysis are listed and dened below:
• Transcribing: e process of creating a written
representation of a speech event so as to make
it accessible for research (Maree, 2007:104).
• Code: Unique identifying symbols and labels
that dene sections of text in a transcript
(Liamputtong, 2009:133).
• Coding: e process of text segmentation and
symbol labelling using descriptions to identify
themes (Liamputtong, 2009:133).
• In vivo codes: Actual data codes that are
not predetermined and allow researchers to
maintain the meanings of the participants’
views and words in their coding process
(Liamputtong, 2009:135).
• A priori codes: ese are predetermined codes
used in the data analysis and are developed
prior to data analysis (Liamputtong, 2009:135).
• emes / categories: Groups of codes that share
similarity of an idea or concept applicable to
the research (Creswell, 2014:238).
Trustworthiness was achieved through providing
a detailed description of the participants, the
research design as well as the analysis methods
used in order to maintain dependability of the
exploration process (Polit & Beck, 2012:584) and
to allow for external validity of the study ndings
(Ritchie et al., 2013:264). Triangulation of the
interview data and themes around orchestration
presented by Zacharia et al. (2011:47), removed
intrinsic bias, achieving conrmability (Polit &
Beck, 2008:198). Member checking was done
to conrm the accuracy of statements made
by participants by reviewing elements of the
transcript with the participant with a follow-up
phone call. is was done to achieve credibility of
the data (Polit & Beck, 2012:585).
Two main themes were identied relating to
the purpose of this research. ese themes are
discussed in the following sections and tied in
Participant ID Job Title Gender
in years
Duration of
C01P01 Key Accounts Manager Male 35 01:11:05
C01P02 Chief Operations Ocer Male 25 00:36:04
C01P03 Head of Operational
Compliance Male 25 00:54:38
C02P01 General Manager: Contract
Logistics Male 35 01:01:02
C02P02 Managing Director Male 35 00:31:08
C03P01 Business Development and
Implementations Manager Female 5 00:30:04
C03P02 General Manager Male 21 01:00:05
C04P01 Country Manager Female 22 00:39:19
C04P02 Business Development
Manager Male 9 00:56:23
C05P01 Director of Business
Development Male 20 00:30:49
C05P02 Director of Integrated
Solutions Male 15 00:38:12
Source: Authors’ own compilation
with the literature reviewed in terms of value
creation and supply chain orchestration. Table 7
outlines the main themes and sub-themes that
were identied, together with the participant
organisations that provided the insight into each
Operational logistics capability drives customer
value creation
e value that 3PLs add to their customers
was found to be embedded in their operational
capability of their service oerings. 3PLs manage
core services for many of their customers in order
to eciently manage cost in their supply chains
through the provision of exible, integrated
logistics solutions. Customers rely on 3PLs to
resolve logistics problems in their networks well,
building condence in their capability which
justies their decision to outsource. e following
sub-themes provides more insight into the views
of 3PLs in terms of the deemed value that they
add to their customers.
Condence in a reliable service provider
Organisations have grown in their reliance on
3PLs and depend greatly on their capability to
execute these services well (Su & Ke, 2013:2).
It was observed that participants’ view of the
condence that they build with their customers,
weighs heavily on them providing quality and
reliable services to their customers, as highlighted
by the following quotes:
“Its important to them because at the end
they know that if they spend a little bit
extra in terms of a good quality service
provider, in the end, they’re going to
benet from it “ (C03P01, female, business
development and implementation manager)
“So I think for us in terms of what
stands out, in my belief, is that absolute
willingness to go the extra mile to make
sure that things get done.” (C01P03,
male, head of operational compliance)
From the data, it was evident that participants felt
that the value that they add as a 3PL is embedded
in their customers having condence in the
quality and reliability of the services rendered.
Whether this customer condence in a 3PLs
capability relates to the length of service provision
is open for further research. is is especially true
Main themes Sub emes C01 C02 C03 C04 C05
capability drives
customer value
Condence in reliable service provider X X X X
Logistics problem resolution and risk
mitigation XXXX
Focus on core activity X X X X
Operational exibility improves
customer value X X
Ecient cost management X X X
Value creation
supply chain
Impact of standardised processes on
value creation for customers X X X X
Customised processes creates value for
customers XXX
Supply chain visibility creates value for
customers XXXX X
Impact of standardisation on visibility
within a supply chain X X X X
3PLs creates value as a neutral arbitrator X X X X
Collaboration with customers creates
value XXXX X
Source: Authors’ own compilation
as it relates to the perceived value that 3PLs have
within the market.
Logistics problem resolution and risk mitigation
When ousourcing logistics functions to a 3PL,
organisations rely on them to not only execute the
functions well, but also to use their experience of
the local market to resolve any logistical problems
that might arise from it, as is clear from the below
And from the 3PL distribution and storage
[point of view], I think again, experience,
which I probably would say given my time
in the industry, is very important. I think the
innovation and problem-solving, solution
nding. I think, from an operations point
of view, experience is key in this matter.
(C01P01, male, key accounts manager)
… there are hurdles, but you can’t see
it. But through us, you can see those
hurdles that will come. We point [them]
out before the error starts.” (C04P02,
male, business development manager)
is form of risk mitigation can be an advantage
to organisations that outsource to 3PLs where
risks are shared within a logistics network
(Green, Turner, Roberts, Nagendra & Wininger,
2008:11). It is evident from the data that this role
of logistics network problem solving adds value
to their customers.
Focus on core activity
e theme of focussing on core activity was
highlighted unanimously across all participants in
this study. Customers outsource certain logistics
functions or whole networks to 3PLs in order to
focus on their core business competencies. is
was deemed a key value proposition from all
“You know, you’ve made a conscious decision
to use a third-party provider so that you don’t
have to worry about that business. You know,
it’s done. e reason you don’t do it yourself
is because you don’t want to be involved in
it. You want to focus all your time on selling
your products and developing your own
business.” (C02P02, male, managing director)
“So when I am doing my job right, I’m giving a
customer the peace of mind, the comfort level
in their business. And they also have enough
time to focus on new development and focus
on something better.” (C03P02, male, general
“ey can concentrate on their core skills
which maybe not [be] into logistics skills. So
again, it’s a case of going for the expertise, and
as I said, 3PL should be the experts in logistics,
so you’re buying in that skill, so you don’t have
to develop it in your own in-house operation.
(C01P01, male, key accounts manager)
A criteria for a successful 3PL and customer
relationship rests on a customer focusing on
its core competency (Aguezzoul, 2014:72). e
participants stated that for most of their customers
they add the value of providing a one-stop-shop
and this has been a focus point in terms of their
relationship with their customers. is helps the
customer to focus on their core business, without
much involvement from the customer in the
outsourced service.
Operational exibility improves customer value
Participants have noted that providing operational
exibility to their customers, irrespective of
the service outsourced, adds a great deal of
value to their customers. In line with oering
complementary services to gain competitive
advantage, 3PLs should have a strategy that is
proactively exible in order to improve customer
satisfaction (Naim et al., 2006:298). As one
participant have noted in particular, providing
exibility in operations is a key contributor to
value creation:
“So they get service enhancement, so greater
[on the] spot availability, because it’s all about
having the right product in the right place at
the right time, and of course, at the right cost.
So we allow people to ex up and ex down
and we manage to peak, that’s what you pay us
for.” (C01P02, male, chief operations ocer)
Participants noted that together with providing
operational exibility, having the ability to
eectively manage operational cost adds value to
their customers.
Ecient cost management
It was noted as a common thread across most
participants, that having the ability to eciently
manage logistics cost, creates value for their
customers in terms of the role that they play
within their customers’ supply chains. e
literature supports this notion that organisations
outsource to 3PLs to save costs within their
respective supply chains (Min & Joo, 2006:259;
Stank et al., 2005:29). e data highlighted two
key aspects of ecient cost management:
“Secondly, I think the benet [is] purely
from a cost saving perspective that it gives
them, hopefully, an opportunity to grow their
business because their cash ow’s improving.
(C05P02, male, director of integrated solutions)
“is [logistics] is not their core business.
So they don’t know how to do cost-eective
[management] in this eld of logistics,
because there are so many loopholes
when consider[ing] logistics.” (C04P02,
male, business development manager)
In the study context, the two key value adding
roles that 3PLs have are that they oer economies
of scale and expertise to eciently manage and
operate logistics functions.
Value creation through supply chain
e following four sub-themes were identied
through a priori codes (see Table 8) based on the
model for supply chain orchestration developed
by (Zacharia et al., 2011:40-54). ese four
themes are discussed below, highlighting the
relevance to supply chain orchestration and the
value that 3PLs add.
Impact of standardised and customised processes
on value creation for customers
It is essential for 3PLs to have standardised
processes in order to function eciently
(Zacharia et al., 2011:45). is was a recurring
theme amongst participants, who stated that
they will only be able to operate eciently with
standardised core processes. It was also noted that
standard core processes are deployed throughout
their operations in order to replicate processes,
adding value to their customers:
“First of all standardized procedures, it’s value-
added for the customer, because then we serve
in a clean line. ere’s no grey. It’s white or
either black, it’s that much simple.” (C04P02,
male, business development manager)
“Yeah. It certainly will add more value.
Having that quality process in place
means that it can replicated, it means
that all employees can be trained to do a
process in a consistent manner.” (C05P01,
male, director of business development)
Although most participants agreed that
standardised process does add value to their
customers, many also pointed out that there is a
lot of customisation required for each customer;
which leads to the following sub-theme.
Participants oered to explain that across their
current customer base, there exists much variety.
As a 3PL, they service many and varied customers,
all with unique requirements and challenges. As
a result, 10 out of the 11 participants noted that
they have to customise processes around specic
customers in order to add value. is is consistent
with Min et al. (2013:140), who suggests that roles
of 3PLs can develop to more customised services
or niche focus areas of 3PLs competencies.
Below are two quotes that best illustrate this
“No, not standardized processes. Let me
rephrase that. You might have a core set of
process in SOP [standard operating procedure]
operation. But equally so, those core activities
will be rened or amended to t client specic.
at makes us unique, [it] is one of our USPs
[unique selling points). at is what the client
wants. It then becomes customizable to their
own, more customised processes.” (C02P01,
male, general manager: contract logistics)
“It is about the individuals customer
oering. ey [customers] always start
with the standard set, and then they are
developed. Bespoke SOPs [standard operating
procedures] are developed for each client
because what suits client A will never suit
client B, even if they operate in exactly the
same segment. at’s why I concluded a
bespoke SOP delivers more value.” C01P02
Further research is necessary around the value
that process standardisation adds to customers.
Zacharia et al. (2011:45) suggests that the
development of standardised processes add
value through ease of information sharing. It
is evident from the data that both standardised
and customised processes add value, but what
is unknown is how it impacts the value created
around the ease of information sharing.
Supply chain visibility creates value for customers
e ability of the 3PLs to have improved visibility
across their customers’ supply chains, creates
much value across the logistics network. is was
found mainly with participants who reported
long standing relationships or partnerships
with existing customers. Crum and Daugherty
(2011:19) notes that the existence of information
exchange between a 3PL and an organisation is a
key element of value in a partnership relationship.
Zacharia et al. (2011:45) refers to supply chain
visibility as being able to see along the supply
chain and indicate that it is necessary for supply
chain orchestration. One participant keenly noted
that having improved supply chain visibility is
necessary to add value to their customers:
“It is a process that we operate. at
means how we apply data and how we
gain knowledge from the data to provide
visibility. Without visibility, how the hell are
you going to run their business?” (C01P03,
male, head of operational compliance)
Another participant highlighted how improved
supply chain visibility would add value to their
“So the value would be in us understanding
and sitting with a customer and showing
them where their opportunities for cost saving
and value creation are. Absolutely no doubt.
(C05P02, male, director of integrated solutions)
e participants who noted the value of supply
chain visibility did not mention how this
information visibility is gained, but indicated that
the degree to which they have better visibility
depends on the customer relationship.
Impact of standardisation on visibility within a
supply chain
Although participants’ views corroborate that
having supply chain visibility would add value
to their customers, the data is contrasted on how
process standardisation would impact supply
chain visibility. Zacharia et al. (2011:45) state
that without process standardisation, visibility
would not be possible. e data highlights that
sometimes standardisation would aid supply
chain visibility, but that this is not always the case.
Excerpts from two participants mention that
standardised process will improve supply chain
..standardisation of anything, in terms of
process of documentation, and quantity, data
is always going to result in better visibility.
(C05P01, director of business development)
... when you have the standardised procedures,
then that means you have the standardized
data store. at means you are able to reach
any kind of trends you would like to see. And
when you see the trend it’s easy to understand
everything, you know, outside the box, let’s
say, you can see everything immediately.
(C04P01, male, general manager)
e comments below are in contrast to the
statements above, in that standardised processes
will not necessarily improve visibility.
… whatever we do internally [standard or
customised], doesn’t pay o and increase
our visibility. at comes from the customer,
because we are the recipients of the product
of these customers and so whatever process
we have internally, won’t gain any visibility
upstream from the customer, because
whatever process I put in place, I still rely
upon information from the customer.
(C01P01, male, key accounts manager)
“So, whether it’s a standard process or
it’s a completely unique process, the
visibility would be indierent to whether
the process is standard or not.” (C05P02,
male, director of integrated solutions)
3PL create value as neutral arbitrators
A 3PL can add value to an organisation by being
an integrator of dierent services on behalf of an
organisation; one who is unbiased and neutral
between logistics partners (Mukhopadhyay &
Setaputra, 2006:718; Zacharia et al., 2011:45).
e participants frequently stated that their
customers value them having a neutral position
in the services that they provide. In many cases
the 3PL would act on behalf of their customers in
dealing with other supply chain entities such as
suppliers and legal governing bodies:
“Yeah, I think, as a 3PL, that’s what we must
demonstrate. And also in our case, as well,
because of where we are in thi s part of the world,
it is important to sometimes have someone
else to talk to, a regulatory body. When you
need to act for them, thats what you do.
But that is why you’re a successful provider.
(C01P02, male, chief operating ocer)
Absolutely, yeah. It’s because for exactly
the point, we are neutral. So we’re operating
agnostically as to the third party that
we’re dealing with. We’re operating in
the customers best interests.” (C05P02,
male, director of integrated solutions)
It was also noted that some participants highlighted
the fact that their ability to be a neutral arbitrator
was enhanced by having improved visibility
across their customers’ supply chains:
“Yes. It does. Because we’re in the middle.
We’re, I guess, on the one hand we have all
the communication from the customer and
timeline. We have, you know, evidence of the
customer’s activities. Something that they
don’t have or the supplier or the other party
doesn’t have and vice versa. Because we’re the
ones with all the information, we do not have
communication between the customer and the
supplier, I think we are better informed and in
a better position.” (C03P01, female, business
development and implementation manager)
Since the 3PLs in this study oer many and varied
services to their customers, their role as a neutral
arbitrator would vary and so would the value that
they contribute in this regard.
Collaboration with customers creates value
Organisations tend to have closer, collaborative
relationships with 3PLs in order to maximise
eciencies and extract more value within the
supply chain (Rinehart et al., 2004:52). It was
prevalent from most participants that they as a
3PL add a great deal of value to their customers,
because they collaborate with them. e level of
collaboration varied across their customer base,
depending on the level of contractual maturity.
One participant maintained that they would not
add value as a 3PL if they did not try to collaborate
with their customers:
“We continually strive to have a partnership
arrangement rather than a client-supplier
arrangement. I think in the modern world
today, the client-supplier doesn’t really work,
in my opinion, it doesn’t really work that well.
I suppose even in a partnership there’s always
some kind of grey area or dividing line, but
the more both parties encourage and try to
work down into a single supply chain then
the better for everybody, I believe.” (C02P01,
male, general manager: contract logistics)
“So collaboration is critical. Otherwise, all
you’re doing is being a little bit like I think how
we [the industry] are in the Middle East right
now, which is, “You need 50 pallet positions?
No problem. ats what the handling in
charges, that’s the handling out charges.
at’s what our storage rate is, let’s negotiate
a little bit, therefore, you’re in.” (C05P02,
male, director of integrated solutions)
Participants noted that they strive to collaborate
with their customers. In seeking opportunities
to improve operational eciencies and
optimising cost throughout within their scope
of responsibility, they endeavour to add value to
their customers.
Summary of ndings and theoretical
is study explored the orchestrating role of 3PLs
within the UAE and how it relates to the value
creation model for 3PL orchestration presented
by Zacharia et al. (2011:40-54). e ndings
indicate that 3PLs in the UAE can be dened as
orchestrators by creating value in terms of process
capability, supply chain visibility, operational
neutrality and customer collaboration. e factors
that inuence the orchestrating role of 3PLs are
the maturity of collaborative partnerships, the
ability of the 3PL to inuence the degree of supply
chain visibility and the scope of the outsourcing
arrangement (i.e., entire supply chains or partial
logistics outsourcing). Partnerships between
organisations and 3PLs that are more mature
share better collaborative relationships enabling
3PLs to have more inuence on supply chain
visibility. 3PLs can act more as orchestrators
within organisations’ supply chains for which they
have a greater scope of outsourcing agreements.
e study shows that 3PLs’ views of value creation
in the UAE are embedded in logistics capability.
3PLs manage core services for many of their
customers in order to eciently manage cost
in their supply chains through the provision of
exible, integrated logistics solutions. Customers
rely on 3PLs to resolve logistics problems in their
networks. is builds condence in the capability
of the 3PL which justies the organisational
decision to outsource. e factors that impact
value creation by 3PLs are logistics expertise of
the local market, the ability to provide exible
solutions and eciently manage supply chain
spend. e view of value creation and the role
of 3PLs in the UAE have expanded the body
of knowledge as to the evolving nature of 3PLs
in an emerging market. ey provide logistics
services to industry in line with previous research
ndings and play roles ranging from basic service
provision to advanced orchestration in supply
is study expands the model of 3PL
orchestration presented by Zacharia et al.
(2011:40-54) geographically, to an emerging
market. e ndings conrm that 3PLs create
value in line with some of the model elements
i.e. standardisation, visibility, neutral arbitration,
and collaboration, in particular supply chain
visibility and collaboration. e ndings are
inclusive pertaining to the value that is created
by standardised processes and being a neutral
arbitrator. It was found that that customised
process can add much value to customers and
the value created by being a neutral arbitrator
depends on the 3PL/customer relationship. It
also corroborates that that the model elements
of supply chain orchestration are interconnected
in dening the value creation role of 3PLs. In
contrast to the model for 3PLs orchestration
being additive in nature, the ndings show that it
is not necessarily the case. Improved standardised
processes do not necessarily improve supply chain
visibility, where customised processes can also
contribute positively to supply chain visibility.
It was also found that improved supply chain
visibility does not necessarily improve neutral
Managerial Implications
e role of 3PLs in the UAE is important in support
of the growing emerging logistics industry.
Organisations can benet from the research
ndings knowing that they can leverage from
3PLs’ operational capabilities to extract the most
value from them. Organisations with existing
3PL engagements can further advance their
level of collaborative maturity and information
sharing platforms to extract further value from
3PLs. 3PLs can benet from knowing that they
can create value by providing standardised or
customised processes to suit the needs of their
customers to orchestrate supply chain activities.
3PLs can strengthen their logistics capability in
the region, knowing that customers will value this
contribution. 3PLs should continue to build on
collaborative partnerships with their customers
to form strategic partnerships where applicable
which will create sustainable value. is implies
that 3PLs should collaborate closer with their
customers to gain better visibility of their supply
chains to establish more ecient and cost
eective operations that deliver exible supply
chain solutions in the UAE.
Limitations and Directions for Future Research
is study was limited to ve organisations and 11
participants, providing in-depth understanding of
the role that they play as 3PLs. ere is scope for
larger scale investigation as well as reviewing the
value of 3PLs from the customers’ point of view
in order to validate some of the ndings in terms
of customer value creation. It is evident from the
data that this role of logistics network problem
solving adds value to the customers of 3PLs. e
study identied a value adding theme of customer
condence in 3PLs capability. is view is limited
in providing insight into the impact that length
of service provision has on operational capability
and it is suggested for further investigation.
Further research is necessary around the value
that process standardisation add to customers.
e study is open to be replicated on a larger
scale to understand the value that is contributed
by both standardised and customised processes.
More in-depth research into contributing factors
that improve information visibility amongst
supply chain partners would be benecial. Since
in the context of this study, the 3PLs oer many
and varied services to their customers, their role
as a neutral arbitrator would vary and so would
the value that they contribute in this regard.
Further research is suggested to investigate cases
where the 3PLs role as a neutral arbitrator is
better established to ascertain the nature of the
value that is created.
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... providers is a validated option to mitigate risks and help make plans more flexible, with a solid opportunity to add resilience and economic value. 3PL providers offer outsourcing services for logistics and manufacturing processes, and they have several and increasing roles (Niemann et al., 2018). ...
... When the disruptive events affect the supply origin according to the 11 origins of disruptions sources defined by Sanchis and Poler (2019a), the usage of third-party logistics (3PL) providers is a validated option to mitigate risks and help make plans more flexible, with a solid opportunity to add resilience and economic value. 3PL providers offer outsourcing services for logistics and manufacturing processes, and they have several and increasing roles (Niemann et al., 2018). ...
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For several years, companies have been aware of the importance of supply planning, but extreme events like pandemics and the financial crisis have shifted the attention towards planning for resilience. To be resilient, companies need to be prepared and to become adaptative and reactive in the presence of disruptive events. Combining the capacity of Third Party Logistics providers (3PLs) with the company's supply capacity can help them achieve these components of resilience. Moreover, the planning process should allow for modeling the effects of disruptive events or, even better, allow for predicting these events. This work aims to create awareness of the importance of disruptive event modeling and prediction as essential components of the supply and demand planning processes in the quest for resilience. We present an optimization model that allows for flexible supply planning, generating scenarios with mixed capacity combinations (internal and outsourced) to minimize supply costs. This model can help quantify the impact of disruptive events on the demand pattern; we present a scenario where an unexpected significant rise in the demand for a month occurs and generates stockouts and related costs due to the lack of resilience. Future research will complement this model with predictive capabilities.
... These categories can be broken down further. Transactional roles include core competency roles, functional outsourcing roles and complementary roles (Huo, Ye & Zhao 2015:160;Niemann et al. 2018Niemann et al. :1745Yang & Zhao 2016:215). The relational category refers to strategic and collaborative roles for strategic advantage (Huo et al. 2015:161-163). ...
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Background: Global supply chain complexity and increased logistics outsourcing have made global supply chains more vulnerable to supply chain disruptions (SCDs). The proliferation of network partners has changed the role of outsourced logistics providers to be more strategic. However, this changing role comes with increased responsibility for the coordination and alignment of supply chain partners during supply chain disruption recovery (SCDR). Successful strategic supply chain alignment (SSCA) may improve overall supply chain performance during SCDR by aligning the recovery efforts of supply chain partners. Objectives: This study aimed to investigate the role of third-party logistics service providers (3PLs) in SSCA during SCDR in South Africa. Method: This research employed a generic qualitative design using purposive sampling techniques. Data were collected from five logistics triads that included 3PL, supplier and customer firms using semi-structured interviews. Results: Third-party logistics service providers play various roles in SSCA during SCDR namely transactional, relational, dependency, resilience and more advanced roles. In addition, 3PLs utilise a range of approaches to achieve SSCA during SCDR including using collaborative planning, transparent communication policies and platforms, performance measurement and supply chain visibility. Conclusion: This study expands on current literature by identifying the value-adding roles of 3PLs in SSCA during SCDR and the use of various approaches to achieve SSCA during SCDR in the South African context. For managers, the findings provide insight into the roles of 3PLs and the approaches used to achieve SSCA during SCDR that could increase overall supply chain performance.
... Fourth Party Logistics (4PL): 4PLs are independent firms that do not own any physical assets but utilize subcontractors instead (Saglietto, 2013). The task of 4PLs is to supervise and manage the entire supply chain of the client in order to "design, build and run comprehensive supply chain solutions" for the client (Gattorna cited in Subramanian et al., 2016; see also Beamberlin, 2018;Cezanne and Saglietto, 2015;Niemann et al., 2018). Consequently, it can be reasoned that 4PL is the most advanced and complex form of outsourcing (Büyüközkan et al., 2009;Xiu et al., 2003;Mukhopadhyay and Setaputra, 2006). ...
Logistics Service Providers (LSPs) play an important role in much of the supply chain industry, including fashions and textiles. Fashion manufacturers tend to focus on their core competencies. At present, the concept of Third-Party Logistics (3PL/TPL) is widely used in the fashion supply chain. In the future, this may progress to Fourth (4PL) or even Fifth-Party Logistics (5PL). All available literature on the subject has been considered using a two-step systematic literature review (SLR) process to present the development of the context of TPL in the fashion industry. This chapter will focus on the role of TPL in the current supply chain of fashion industry. It encompasses who the main players are and what activities they perform, including outsourcing characteristics, classification and typology of Logistics Service Providers (LSP), the benefits of incorporating sustainable practises involved in caring for the employees, sustainable trend in utilization of 3PLs and the utilization of 3PL in Omnichannel in fashion industry.
... Third party logistics performed a relational role that focuses on a partnership for strategic advantage (Jayaram & Tan 2010:264). In addition, 3PLs also act as a customer developer or logistics integrator where the internal resources might be lacking within an organisation (Niemann et al. 2018(Niemann et al. :1745. The taxonomies of trust in SCRM between buyers and suppliers in a 3PL industry within a developing country context entail a considerable knowledge gap as the role of 3PLs is changing into a value-adding and orchestrating role within developing countries (König & Spinler 2016:123;Macdonald & Corsi 2013:285) because of their engagement with an organisation's suppliers and customers (Heiyantuduwa, Wannisingha & Rupasinghe 2015:2). ...
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Orientation: Many organisations find it difficult to implement supply chain risk management (SCRM) processes successfully without the existence of trust in buyer–supplier relationships. Research purpose: The purpose of this study was to explore the taxonomies of trust in SCRM in a buyer–supplier relationship within the South African third party logistics (3PL) industry. Motivation for the study: The advantages and disadvantages of trust in buyer–supplier relationships have been researched extensively. However, within the context of South Africa, there is a dearth of research on the main components of trust in buyer–supplier relationships when implementing SCRM processes. Research design, approach and method: A generic qualitative research method was used to gather data. A total of 21 purposively selected senior managers were interviewed from buyer and supplier organisations in South Africa with headquarters located in Gauteng province participated in semi-structured interviews. Within this sample, 10 buyer and 10 supplier organisations were interviewed. Main findings: The findings of this study indicate that value similarity improves SCRM processes by relationship building, transparency, information sharing and similar supply chain objectives. Past performance improves SCRM processes by increasing the business knowledge of supply chain partners, confidence in ability and goal congruity. Risk perceptions improve SCRM processes by supply chain partner alignment and similar intentions. Social trust improves SCRM processes by increasing the responsiveness, agility and communication of supply chain partners. Practical/managerial implications: This study provides practitioners in the 3PL industry with insights into the role of having trust in their buyer–supplier relationships, as trust acts as a catalyst and enabler when implementing effective SCRM processes. Contribution/value-add: The theoretical contribution of this study is the use and adoption of the Trust Confidence and Cooperation Model by Earle, Siegrist and Gutscher (2010), to create a taxonomy of trust within a SCRM and South African 3PL context.
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Purpose of the study: Supply chains are faced with various disruptions which impact the performance of the focal firm and its network partners, such as third-party logistics providers (3PLs). Successful supply chain collaboration (SCC) can improve supply chain performance and provide greater synergistic advantages to network partners than could be achieved when working independently. SCC has been addressed extensively in the literature, but the specific role of SCC in supply chain disruption (SCD) recovery is unclear. This study aimed to explore how South African 3PLs and their clients collaborate during SCD recovery and the enablers of and barriers to such SCC. Design/methodology/approach: This study employed a generic qualitative research design. Data were collected from ten 3PLs and ten client firms through semi-structured interviews with senior managers. Findings: The study identified four distinct roles of SCC during disruption recovery: facilitating, contributing, interconnecting and retaining. Furthermore, 3PLs and clients identified communication, IT, risk mitigation, and risk response tools and techniques for SCC during SCD recovery. In addition, the findings also reveal a range of intra- and inter-firm enablers and barriers to SCC during disruption recovery. Recommendations/value: This study builds on the current literature by exploring SCC in SCD recovery within an emerging market setting, and SCC between 3PLs and their clients in an SCD recovery context. Managerial implications: Having a deeper understanding of the role of SCC in SCD recovery, the tools and techniques for SCC in SCD recovery and what drives and prevents SCC in SCD recovery, practitioners can fully realise the benefits associated with successful SCC in SCD recovery.
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Background: The coronavirus disease 2019 (COVID-19) pandemic has opened the world’s eyes to the impact that supply chain disruptions have on our society. Supply chain disruptions can result in various long-term effects, of which reputational risk is one of the biggest. A good reputation can create value for all stakeholders of a firm, however it can also expose a firm to risk. Reputational risk has been extensively studied in supply chain management; however, the management of reputational risk during supply chain disruption recovery (SCDR) has been neglected. Objective: This study explores reputational risk management during SCDR, between a logistics triad consisting of third party logistics providers (3PLs), their upstream suppliers and downstream customers within a South African context. Method: A generic qualitative design was employed to collect data from five logistics triads using semi-structured interviews. Results: The study found that reputational risk has a predominantly positive influence on the SCDR process. Furthermore, the study expands on existing literature by identifying additional approaches to manage corporate reputation during SCDR not evident in literature. These approaches include the use of control centres and involvement of the key account manager. Conclusion: This study creates awareness for the importance of reputational risk during SCDR and also provides managers with valuable insight into how reputational risk should be managed during SCDR.
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Orientation: Third-party logistics (3PL) providers act as integrators between suppliers, manufacturers and retailers whilst providing product movement and logistics information flow throughout the supply chain. Firms have been integrating their supply chains and strengthening relationships with 3PLs to enhance supply chain performance, achieve cost reduction, improve service and shorten lead times. However, the innate association between interpersonal relationships (IPRs) and supply chain integration (SCI) has received little attention in literature. Research purpose: To investigate the role of IPRs on inter-organisational relationships (IORs) during both the formative and the operational stages of SCI. Motivation for the study: Although SCI has received increased attention over the past few years, significant gaps related to IPRs and SCI in the service sector still exist in the literature. Research design, approach and method: This study was conducted in the South African 3PL industry. A generic qualitative research design was used to collect data from 12 middle- to senior-level managers employed by 3PL organisations in South Africa. This study used a thematic analysis approach to analyse the collected data. Main findings: This study found that IPRs played a significant role in IORs during the SCI process, such as the improved ease of doing business, enhanced trust, enhanced business accommodation and improved customer retention. However, the negative influences of IPRs should not be ignored, such as unethical practices, crossing the line, bias judgement and personal issues affecting the business. Furthermore, this study identified how IPR elements, namely personal affection, credibility and communication mature throughout the SCI process. The findings indicated that the role of personal affection matures and plays a more significant role during the operational stages of SCI, whereas personal credibility and communication had shown to play a significant role during both the formative and the operational stages of SCI. Practical/managerial implications: This study provided managerial insights into the role of IPRs and the importance of leveraging personal affection, credibility and communication to influence IORs during the SCI process. Contribution/value-add: This study contributes to the existing body of knowledge by being the first empirical study to investigate the role of IPRs on IORs during different stages of SCI in the South African 3PL context. This study reveals contradicting results in the evolutionary directions of personal affection, credibility and communication in their influence on IOR during the SCI process compared to the findings by Wang et al. (2018a:1170–1186).
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Over just a few years, the outsourcing of logistic functions to various types of logistics services providers (LSPs) has become central to the organization of companies and markets. In this connection, both theorists and practitioners usually present LSPs in terms of classifications, describing their development with the help of representative statistics. However, one may reasonably wonder about the origin of these classifications and the credibility of the statistics, since LSP are not clearly identified in the nomenclatures of economic activities. Then, how to characterize the fourth party logistics (4PL) community? Our aim is to propose a complete analysis of the 4PLs community based on an empirical study on all logistic service providers operating in France. Our methodology consists in the triangulation of information obtained from three studies (based on data contained in the DIANE database, and on data extracted from selected businesses websites).The results we found for the French 4PL community are also representative of the global 4PL, because our methodology is based on three studies which are therefore representative, reproducible and transferable to other countries. We propose a taxonomy and a new definition that differs from the traditional definition of Accenture.
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Based on environmental, legal, social, and economic factors, reverse logistics and closed-loop supply chain issues have attracted attention among both academia and practitioners. This attention is evident by the vast number of publications in scientific journals which have been published in recent years. Hence, a comprehensive literature review of recent and state-of-the-art papers is vital to draw a framework of the past, and to shed light on future directions. The aim of this paper is to review recently published papers in reverse logistic and closed-loop supply chain in scientific journals. A total of 382 papers published between January 2007 and March 2013 are selected and reviewed. The papers are then analyzed and categorized to construct a useful foundation of past research. Finally, gaps in the literature are identified to clarify and to suggest future research opportunities.
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This research develops a classification framework of supplier-customer relationships. Data were collected from active relationship managers and provided the empirical basis for the classification scheme. The resulting relationships were classified into seven groups. Names for each type of relationship were developed based on a set of Delphi group responses.
The second edition of this highly accessible, core textbook continues to offer students a practical guide to the process of planning, undertaking and writing about qualitative research in public relations and marketing communications. Through clear explanations and illustrations, the book encourages undergraduate and master level students to engage with the main approaches and techniques for conducting critical, reflective investigations. This new edition: Identifies the skills and strategies needed to conduct authentic, trustworthy research Highlights specific analytical techniques associated within the main research approaches Provides new sections on internet-based research, critical discourse analysis, historical research, action research and mixed methods research Qualitative Research Methods in Public Relations and Marketing Communications will be invaluable for those undertaking research methods courses on public relations and marketing communication degrees, as well as those working on a dissertation. © 2011 Christine Daymon and Immy Holloway. All rights reserved.
This study examines how integration, an emerging innovative approach in inter-firm relationship management, between the vendor and the client in logistics outsourcing relationships is influenced by environmental uncertainties. Building on transaction cost theory, we develop the hypothesis that integration decreases to cope with supply volatility and technology uncertainty, and increases to cope with demand volatility and legal unenforceability. These four interrelated yet distinct characteristics jointly describe environmental uncertainties in a logistics outsourcing relationship. Our analysis of 264 such relationships suggests that integration does decrease with supply volatility and technology uncertainty and increase with demand volatility and legal unenforceability. By enhancing operational performance, integration improves outsourcing performance in terms of both financial performance and overall satisfaction. Lastly, operational performance also contributes to financial performance.
Logistics outsourcing has become an important strategy for companies seeking to gain a competitive advantage. However, opportunistic behavior often arises in the process of outsourcing, and such behavior can damage the collaborative relationships between third-party logistics (3PL) providers and users. By applying the lenses of transaction cost economics, social exchange theory and contingency theory, this study investigates how transactional (i.e., contracts) and relational safeguards (i.e., trust) curb opportunism under demand uncertainty. The data were collected from 247 manufacturing and service industries in China. The results show that trust and detailed contracts mitigate opportunism directly, but contract application aggravates the hazards of opportunism. In addition, demand uncertainty moderates the relationship between contract application and opportunism. Trust, however, both enhances contract application and enables detailed contracts. Therefore, trust indirectly enhances opportunism through contract application and indirectly reduces opportunism through detailed contracts. This study provides theoretical contributions and managerial insights for 3PL relationship management.
Purpose ‐ This paper aims to measure the comparative managerial efficiency of 24 leading third-party logistics providers (3PLs) in North America and identify best-practice firms among these 3PLs. Design/methodology/approach ‐ This paper proposes data envelopment analysis to measure the slack-based efficiency, pure technical efficiency, and mixed efficiency of 24 leading 3PLs in North America, relative to their rivals in world-wide 3PL markets. In particular, this paper develops both the Charnes, Cooper and Rhodes (CCR) model under constant returns to scale and the Banker, Charnes, and Cooper (BCC) model under varying returns to scale that are designed to derive weights without being fixed in advance. Findings ‐ With respect to managerial efficiency, this study did not find any significant performance differences between asset based 3PLs and non-asset based 3PLs. Defying the common sense, relatively small but niche-oriented 3PLs with limited service offerings tended to perform better than their larger counterparts with a wide variety of service offerings to customers all across the world. A majority of leading 3PLs in North America suffer from overcapacity and the subsequent underutilization of their physical and human resources. Practical implications ‐ This paper provides practical guidelines as to how 3PLs can find right niche markets, manage slack/idle resources, and cope with increasing competition. Originality/value ‐ This paper is one of the first to develop a variety of efficiency measures for 3PL operational performances including pure technical (managerial) efficiency, slack-based efficiency, scale efficiency, and mix efficiency under both constant and varying returns to scale. This paper also considers the much larger number of 3PLs than those considered by prior benchmarking studies for performance evaluation; thus, it captures the "true" managerial efficiency of 3PLs relative to their competitors in the more crowded North American 3PL industry.
Various market challenges have led logistics service providers (LSPs) to engage in horizontal cooperations with each other, while maintaining their general legal independence. As an idiosyncrasy, horizontal cooperations entail the opposing forces of competition and cooperation, also referred to as “co‐opetition” (Bengtsson and Kock 2000; Tsai 2002). This constellation facilitates the development of opportunism and conflicts, which raise the risk of relationship failure. Adequate governance mechanisms provide a basis to avoid failure and drive cooperation success. This paper focuses on the postformation cooperation management phase and identifies the specific effects that operational governance has on cooperation commitment and cooperation effectiveness. Based on survey data from 226 LSP cooperations, we show that both formal and social governance mechanisms have a substantial performance effect. In this regard, the results differ fundamentally from studies on vertical buyer‐supplier relationships. With respect to the specific setup of the cooperation, a differentiated view is provided. Results indicate that two types of cooperation complexity are of relevance: organizational complexity and strategic complexity. The former drives the relevance of formal control; the latter increases the relevance of both formal and social control for cooperation success.