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To carry out a comprehensive survey on 3PL practices in India and to establish the impact of usage of third party logistics services on business results.
Abstract
Purpose
To carry out a comprehensive survey on 3PL practices in India and to establish the impact of usage of third party logistics services on business results.
Design/methodology/approach
Begins by analysing the studies carried out on 3PL practices and establishing a research framework. The input variables to the research framework depict the organization‐specific characteristics, such as the extent of usage of 3PL services, the reasons for outsourcing and the impact of the usage of 3PL services. The output function of future usage of 3PL services is influenced by the three input variables. Data collected through survey questionnaire on the input and output variables are used to establish impact of usage of 3PL services on business performance through statistical analysis.
Findings
The usage of 3PL services reveals positive and significant impact on business performance though 3PL practices are still at a nascent stage in India. Additionally, results clearly indicate that significant increase in outsourcing has been planned across all activities of the logistics function in the next 2‐5 years.
Research limitations/implications
Further research work should focus on managing 3PL relationships; selection and contract management of 3PL service providers for building collaborative supply chain partnerships; and identifying critical success factors for 3PL implementation and establishing performance measures for long‐term 3PL relationships.
Practical implications
Detailed study to motivate supply chain managers to outsource and use 3PL services to focus on the core business, drive logistics cost reduction, and improve supply chain efficiency. These indicators should also help the 3PL service providers plan the depth and scope of their service offerings to user organizations in India.
Originality/value
The paper contributes to the current 3PL and supply chain practices and the emerging trends in 3PL services for achieving improved business results and supply chain efficiencies.
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A. Michael Knemeyer and Paul R. Murphy
This paper provides a comparison of users and providers of third‐party logistics (3PL) services with respect to relationship marketing elements, such as trust and communication…
Abstract
Purpose
This paper provides a comparison of users and providers of third‐party logistics (3PL) services with respect to relationship marketing elements, such as trust and communication, as well as relationship marketing outcomes, such as retention and recovery.
Design/methodology/approach
Constructs for the relationship marketing elements and outcomes were derived from the extant literature and modified to reflect the nature of 3PL arrangements. The relevant data were collected from separate, but consistent, mail surveys that were sent to users of 3PL services as well as providers of 3PL services.
Findings
The results indicate statistically significant differences between 3PL users and providers across eight of nine relationship marketing elements, with the lone non‐significant comparison involving the communication construct. There are also statistically significant differences between 3PL users and providers for each of the four relationship marketing outcomes.
Research limitations
Although the present study utilized previously validated relationship marketing elements and outcomes, future research could examine other relationship marketing elements and outcomes. Future research could also investigate relationship marketing issues through dyads/matched pairs of 3PL users and providers.
Originality/value
This manuscript examines 3PL with respect to theories and/or frameworks that comes from outside the logistics discipline, an approach advocated by Stock. Moreover, the paper adds to Moore's 3PL/relationship marketing research by investigating relationship elements and outcomes. The current paper adds to the rather limited literature that incorporates both 3PL user and provider perspectives.
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Sudipendra Nath Roy and Tuhin Sengupta
The purpose of this paper is to provide a systematic literature review and contributes to academic understanding and practitioner needs of third party logistics (3PL) which were…
Abstract
Purpose
The purpose of this paper is to provide a systematic literature review and contributes to academic understanding and practitioner needs of third party logistics (3PL) which were developed over the past decade.
Design/methodology/approach
Through a structured selection search of the entire English-language academic literature, after final refinement, the authors identified 95 relevant studies in this context. A succinct classification of literature has been performed to collate the entire literature encompassing viewpoints of both academicians and practitioners.
Findings
The key finding of this review suggests the opportunities exist in the understanding of the “optimization capabilities” of a 3PL provider. The authors found that when on the one side, constructs such as “supply chain vision”, “creativity”, “impact of geographical reach of services on the selection criteria” need more attention; on the other hand, operational dimensions of 3PL such as packaging ability, repair service, procedural compliance, conflict resolution, role of HR policies and mitigation of external risks provides a chance for future researchers to delve deeper into these domains. Furthermore, the authors also presented a comprehensive research gap framework highlighting potential research topics to be explored in near future.
Research limitations/implications
The paper captures peer-reviewed literature from the past decade and has been selected from the Web of Science database only.
Originality/value
The paper identifies different research gaps, namely, conceptual, contextual and methodological, to understand and develop opportunities for future research in the domain of 3PL. The paper makes a careful attempt by linking the synthesis of this literature review to previous literature reviews to establish the knowledge continuum of third party logistics.
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Kannan Govindan, Roohollah Khodaverdi and Amin Vafadarnikjoo
Third-party logistics (3PL) plays a main role in supply chain management and, as a result, has experienced remarkable growth. The demand for 3PL providers has become a main…
Abstract
Purpose
Third-party logistics (3PL) plays a main role in supply chain management and, as a result, has experienced remarkable growth. The demand for 3PL providers has become a main approach for companies to offer better customer service, reduce costs, and gain competitive advantage. This paper identifies important criteria for 3PL provider selection and evaluation, and the purpose of this paper is to select 3PL providers from the viewpoint of firms which were already outsourcing their logistics services.
Design/methodology/approach
This study utilized the grey decision-making trial and evaluation laboratory (DEMATEL) method to develop 3PL provider selection criteria. Because human judgments are vague and complicated to depict by accurate numerical values, the grey system theory is used to handle this problem.
Findings
The findings revealed the structure and interrelationships between criteria and identified the main criteria for 3PL provider selection. The most important criteria for 3PL provider selection are on time delivery performance, technological capability, financial stability, human resource policies, service quality, and customer service, respectively.
Practical implications
The paper’s results help managers of automotive industries, particularly in developing countries, to outsource logistics activities to 3PL providers effectively and to create a significant competitive advantage.
Originality/value
The main contributions of this paper are twofold. First, this paper proposes an integrated grey DEMATEL method to consider interdependent relationships among the 3PL provider selection criteria. Second, this study is one of the first studies to consider 3PL provider selection in a developing country like Iran.
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Konstantinos Selviaridis and Martin Spring
To provide a taxonomy of third party logistics (3PL) research and, based on that, to develop a research agenda for this field of study.
Abstract
Purpose
To provide a taxonomy of third party logistics (3PL) research and, based on that, to develop a research agenda for this field of study.
Design/methodology/approach
The proposed 3PL research classification framework is based on a comprehensive literature review, which concentrates on peer‐reviewed journal papers published within the period 1990‐2005. A total of 114 academic sources have been retrieved and analysed in terms of research purpose and nature, method employed, theoretical approach and level of analysis.
Findings
The review reveals that 3PL research is empirical‐descriptive in nature and that it generally lacks a theoretical foundation. Survey research is the dominant method employed, reflecting the positivist research tradition within logistics. It identifies certain knowledge gaps and develops five propositions for future research. It suggests that focus should be directed towards more normative, theory‐driven and qualitative method‐based studies. It also argues that further empirical research in relation to 3PL design/implementation and fourth party logistics services is needed.
Originality/value
This paper fulfils an identified need for a comprehensive classification framework of 3PL studies. It essentially provides both academics and practitioners with a conceptual map of existing 3PL research and also points out opportunities for future research.
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Rohit Bhatnagar, Amrik S. Sohal and Robert Millen
Focusses on three constructs that we believe are the primary determinants of the future usage of third party logistics services. These constructs are: extent of use of the third…
Abstract
Focusses on three constructs that we believe are the primary determinants of the future usage of third party logistics services. These constructs are: extent of use of the third party logistics services; decision making process for choosing contract logistics services provider; and impact of the usage of contract logistics services on the organisation. An empirical research was carried out in Singapore to study the impact of these three factors on the future usage of third party logistics services in Singapore. Results based on an analysis of data relating to 126 Singapore‐based firms indicate that most users of these services are satisfied with their providers and believe that this has led to positive developments within the organisation. With a high current level of satisfaction, a large number of these firms are likely to increase their usage of contract logistics services moderately or substantially.
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Nasrin Akter, Prem Chhetri and Shams Rahman
Bangladesh is becoming one of the emerging destinations for global outsourcing. However, little is known about the usage patterns of third party logistics (3PL) outsourced…
Abstract
Purpose
Bangladesh is becoming one of the emerging destinations for global outsourcing. However, little is known about the usage patterns of third party logistics (3PL) outsourced services. The purpose of this paper is to examine the extent of 3PL usage, the organisational factors affecting 3PL usage, impacts of 3PL and the future trend of 3PL usage in Bangladesh.
Design/methodology/approach
A survey questionnaire is used to collect data against a number of items pertaining to the extent of 3PL use and its impact on performance. A total of 1,000 organizations were randomly selected from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) database. The survey resulted in 243 responses, out of which 150 organisations have adopted 3PL services. A chi-square test is conducted to assess statistical significance of the hypothesized relationships among the variables relating to 3PL decision-making process and a regression analysis is conducted to assess the strength of those variables to predict the impact of 3PL usage.
Findings
Overall, the results reveal that 3PL services are extensively adopted by businesses (63 per cent) in Bangladesh. Freight forwarding, order fulfilment and shipment consolidation are the top three most frequently outsourced 3PL services. However, the extent of 3PL use varies between manufacturing and service organisations. Results also suggest that logistics system performance is the key predictor of the overall satisfaction of 3PL users.
Research limitations/implications
The key limitation of this study is that both manufacturing and services firms are collectively analysed. Future research will separately investigate the outsourcing 3PL services requirements for two categories of firms. Characterisation of 3PL usage patterns and their drivers has practical significance and strategic implications for logistics practitioners and decision-makers who opt for global outsourcing.
Originality/value
The implementation in the context of Bangladesh to provide an evidence base to formulate business strategies for increasing the adoption of 3PL usage is novel.
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Pilar Arroyo, Juan Gaytan and Luitzen de Boer
To investigate the status of third party logistics (3PL) in Mexico and the feasibility of 3PL as a global, uniform strategy.
Abstract
Purpose
To investigate the status of third party logistics (3PL) in Mexico and the feasibility of 3PL as a global, uniform strategy.
Design/methodology/approach
A survey among firms located in the central part of Mexico, followed by a comparison of the results with data from existing 3PL studies of Europe and the USA.
Findings
3PL seems a common but “low profile” practice among large Mexican firms. Only a third outsources more than three functions, which are mostly supportive and operational. Compared to Mexico, 3PL use is higher in Europe and USA. Firms in Europe and USA focus more on tactical, integrated functions and cost reduction when using 3PL while Mexican firms aim for improved customer service and concentration on core activities. The lack of competitive local providers makes 3PL expensive and may favour larger, international providers.
Research limitations/implications
The results warrant additional surveys of Mexico and other developing regions, preferably using a unique survey design and covering more SME's. Case studies are needed to further investigate how multinational firms manage the 3PL decision process on different organizational and regional levels.
Practical implications
Uniform, global 3PL strategies should be considered with care: what may work in Europe may not work in Mexico or the USA. Outsourcing should be seen as a means and not as an end. Mexican firms can use 3PL successfully yet achieve different ends than European firms. Mexico's large SME market offers opportunities for providers of 3PL services.
Originality/value
This is the first thorough study about outsourcing logistics practices in Mexico, which adds a Latin‐American perspective to the very few 3PL studies conducted in developing regions. In addition, the comparison of Mexican outsourcing practice with practices across the USA and Europe offers a cross‐cultural view on 3PL and identifies the need for further mapping of expectations and conditions related to effective outsourcing of logistics in other regions.
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Devinder Kumar and Anupama Prashar
This study examines the effect of human and technological resource bundling on the financial and non-financial performance of third-party logistics (3PL) firms in India.
Abstract
Purpose
This study examines the effect of human and technological resource bundling on the financial and non-financial performance of third-party logistics (3PL) firms in India.
Design/methodology/approach
For achieving the research aim, 248 practitioners from India based 3PL firms were surveyed. The relationships between human and technology resources and firm performance were examined using structural equation modelling (SEM).
Findings
The results of empirical tests revealed that human and technological resources significantly enhance the performance of the 3PL firm. However, the firm's logistic capabilities related to track and trace, order management and final assembly do not mediate this relationship.
Originality/value
This study contributes by examining resource bundling in India's 3PL industry using empirical data and providing knowledge of the relationship between resources and business performance. It guides managers to consciously develop resource capabilities that influence firm performance.
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Yongyi Shou, Jinan Shao and Anlan Chen
Drawing upon the theory of the resource-based view, the purpose of this paper is to examine the relationships among relational resources, innovation capability and firm…
Abstract
Purpose
Drawing upon the theory of the resource-based view, the purpose of this paper is to examine the relationships among relational resources, innovation capability and firm performance in the third-party logistics (3PL) industry.
Design/methodology/approach
Based on data collected from 203 3PL providers in China, this study adopts the approach of structural equation modeling to examine the hypothesized relationships among relational resources, innovation capability and firm performance.
Findings
The results of this research confirm that relational resources have a positive effect on firm performance. However, the effect is not direct, but realized through the mediation of innovation capability. This study indicates that relational resources are important for 3PL providers to achieve superior performance, and innovation capability plays a mediating role between relational resources and firm performance.
Originality/value
The main contributions of this paper to the literature are twofold. First, it extends the extant research by highlighting the mediating mechanism of innovation capability in relational resources’ influence on firm performance. Second, it advances the existing perspectives on 3PL firms in the Chinese context and this sheds light on logistics research on emerging markets.
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