Supply chain finance is not for everyone
International Journal of Physical Distribution & Logistics Management
ISSN: 0960-0035
Article publication date: 24 November 2020
Issue publication date: 4 December 2020
Abstract
Purpose
Logistics service providers (LSPs) have unique resources and capabilities that position them to deliver supply chain finance (SCF) solutions. The study aims to discuss and illustrate the necessary resources and process of value creation and capture of LSPs, potentially offering SCF solutions.
Design/methodology/approach
Relying on a theoretical framework, combining a resource-based view (RBV) with the literature on SCF, the authors apply an abductive case study methodology, including 11 interviews with representatives from four LSPs.
Findings
The main findings are as follow: (1) although an LSP has sufficient resources for value-added SCF solutions, it may not capture enough value to motivate realising them; (2) an LSP considering offering SCF should account for the interaction between its resources and cargo transit times, risk and regulatory restrictions and (3) future studies should distinguish between financing the logistics services and the moved products.
Research limitations/implications
The authors contribute to the growing field of SCF research by analysing motives and barriers for LSPs to offer SCF service to their customers. Because none of our case companies decided to move beyond experimentation further research is needed on the resources and capabilities needed for LSPs to successfully venture into SCF.
Practical implications
The study provides LSPs with clear indications of the difficulties involved when contemplating a move into SCF solutions and discusses the potential value of offering such services.
Originality/value
Despite evidence of LSPs engaging in SCF in various industries, academic contributions do not go beyond operational conditions or quantification of benefits. The authors add evidence on how LSPs are currently evaluating the prominence of adding SCF to their value offerings, including a new perspective on resources, value generation and capture mechanisms.
Keywords
Acknowledgements
The authors wish to thank the anonymous reviewers and the editor for constructive comments, the interviewees for sharing their experiences and participants at the 2017 NOFOMA Conference and the 2019 IPSERA Conference for feedback in an early phase of this work. This Dutch part of the paper was funded by a research program called Pre-Shipment and In-Transit Supply Chain Finance, supported by the Dutch Institute for Advanced Logistics (Dinalog), the Netherlands, under grant number 2017-2-130TKI. The Swedish part of the study was funded by the two projects “Supply Chain Finance: New roles for the logistics and transport industry”, VINNOVA grant No. 2016-03441, and “Financing the decarbonising of the freight transport system” funded by the Swedish Transport Administration with Triple F Project No.: 2020.3.2.11.
Citation
Elliot, V.H., De Goeij, C., Gelsomino, L.M. and Woxenius, J. (2020), "Supply chain finance is not for everyone", International Journal of Physical Distribution & Logistics Management, Vol. 50 No. 9/10, pp. 775-807. https://doi.org/10.1108/IJPDLM-11-2019-0331
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited