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Article
Publication date: 20 November 2017

Saleh Fahed Alkhatib

The purpose of this paper is to develop a new integrated approach for the strategic logistics outsourcing process through identifying the logistics independent success factors…

1810

Abstract

Purpose

The purpose of this paper is to develop a new integrated approach for the strategic logistics outsourcing process through identifying the logistics independent success factors (ISFs) and linking them with the firm’s strategic objectives and logistics requirements. Then, the new integrated approach will be used to compare the outsourcing processes for the upstream and downstream supply chain members. Studies of logistics outsourcing reveal the strategic importance of this process and the increasing need for new strategic approach.

Design/methodology/approach

The design is based on mixed methodology and integrated approach. The fuzzy decision-making trial and evaluation laboratory technique has contributed to the construction of interdependent relationships, development of impact-relationship maps (IRMs) and identifying ISFs. The fuzzy quality function deployment technique was used to link the strategic objectives, logistics requirements and the ISFs to evaluate and select logistics service providers (LSPs) strategically. Finally, two case studies (upstream and downstream supply chains) are used to demonstrate the new approach effectiveness and to highlight the differences/similarities between the two streams.

Findings

In addition to the new strategic logistics outsourcing approach, this study analysed the impact relationships of the LSPs’ framework factors and constructed their maps. In all, 21 ISFs have been identified: 8 logistics key performance indicators, 7 logistics services and activities and 6 logistics resources and capabilities. The two streams’ comparison relived several differences in terms of strategic objectives, logistics requirements and ISFs.

Research limitations/implications

The new approach for strategic logistics outsourcing can help firms to perform a better multi-stakeholder multi-criteria strategic outsourcing process. In addition, the upstream–downstream supply chain comparison increases our understanding how different supply chain members perform different outsourcing processes.

Originality/value

This is one of the pioneering studies that compares the supply chain upstream–downstream perspectives to highlight logistics outsourcing similarities and differences. To the best of author’s knowledge, this is one of the first logistics outsourcing studies that identifies ISFs for strategic logistics outsourcing, provides the first IRMs for the strategic logistics factors and develops a new integrated approach for strategic logistics outsourcing

Details

Journal of Global Operations and Strategic Sourcing, vol. 10 no. 3
Type: Research Article
ISSN: 2398-5364

Keywords

Article
Publication date: 2 August 2021

Vinh Van Thai, Shams Rahman and Dong Mai Tran

This paper aims to examine critical factors of successful logistics outsourcing relationship from the perspectives of both LSPs and shippers employing case studies in Singapore…

Abstract

Purpose

This paper aims to examine critical factors of successful logistics outsourcing relationship from the perspectives of both LSPs and shippers employing case studies in Singapore and Vietnam as examples of well-established and growing logistics outsourcing markets.

Design/methodology/approach

The case study design is adopted to empirically examine logistics outsourcing practices. Data were collected through in-depth interviews with senior managers from four cases in Singapore and seven cases in Vietnam. These case organisations are engaged comprehensively in logistics outsourcing activities and encompass both international firms that have their local operations and those local firms whose operations expand internationally.

Findings

Results suggest that the success of logistics outsourcing may depend on five strategic factors and five operational factors, with some of them being the same between LSPs and shippers in both countries and in line with the literature. There also seemed to be a difference between logistics outsourcing practitioners in a developed country (Singapore), and those in a developing country (Vietnam), in which factors, i.e. having the right people and management support, business processes integration and cultural intelligence, tend to be emphasised and practised more in the former. A strategy matrix of logistics outsourcing was mapped accordingly.

Research limitations/implications

The generalisation of this study would require further empirical examination from more quantitative research, for example, the use of surveys with shippers who engage with LSPs.

Practical implications

Findings from this research can assist managers in charge of outsourcing to reflect on their practices and devise and implement appropriate strategies for successful logistics outsourcing. Especially for growing logistics outsourcing markets and not-yet-standardised practices like Vietnam, the findings of this research are significant as they provide policy and managerial insights into how logistics outsourcing can be performed successfully. Specifically, adequate guidelines and resources including training relating to strategic factors of logistics outsourcing must be provided.

Originality/value

This research is one of the first studies that categorise success factors of logistics outsourcing into strategic and operational factors and postulates their conceptualisation in a strategy matrix that can be applied in future research.

Details

The International Journal of Logistics Management, vol. 33 no. 1
Type: Research Article
ISSN: 0957-4093

Keywords

Article
Publication date: 30 August 2011

Ana Núñez‐Carballosa and Laura Guitart‐Tarrés

Companies consider logistics outsourcing for strategic reasons, and build close‐knit relationships with third‐party logistics (3PLs) providers. The purpose of this paper is to…

3220

Abstract

Purpose

Companies consider logistics outsourcing for strategic reasons, and build close‐knit relationships with third‐party logistics (3PLs) providers. The purpose of this paper is to analyse logistics outsourcing in Spain from the viewpoint of 3PLs.

Design/methodology/approach

The paper suggests three propositions and conducts a case study of four 3PLs in Spain, chosen because of their market coverage and their range of services.

Findings

The results identify the main reasons why companies choose to outsource logistics, what kind of relationship they build with providers, and how much involvement in the management of their supply chain they seek from providers.

Practical implications

Most companies in Spain continue to outsource mainly on the basis of costs, and do so tactically. However, the option of developing an alliance with a 3PL provider is not always more economical, as cost reduction is due more to optimisation of the supply chain than to outsourcing itself. Based on the experiences of the four 3PLs providers under analysis, the paper makes a set of recommendations for senior management in the sector.

Originality/value

The research helps to fill an existing gap in the study of logistics outsourcing in Spain because it analyses logistics outsourcing from the perspective of the 3PLs provider and not from the viewpoint of the outsourcing organisation, as the vast majority of the studies conducted in Spain have done to date.

Details

Industrial Management & Data Systems, vol. 111 no. 8
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 5 October 2015

Baofeng Huo, Chen Liu, Mingu Kang and Xiande Zhao

The purpose of this paper is to develop a theoretical framework involving dependence, relationship commitment, logistics outsourcing and service quality to exhibit the roles of…

2617

Abstract

Purpose

The purpose of this paper is to develop a theoretical framework involving dependence, relationship commitment, logistics outsourcing and service quality to exhibit the roles of the relational factors involved in logistics outsourcing and their outcomes.

Design/methodology/approach

Based on data collected from 361 companies in Greater China, the authors use the structural equation model approach to examine the hypothesized relationships.

Findings

Both normative and instrumental relationship commitment are necessary for third party logistics (3PL) users to cope with their goal dependence on 3PL providers. However, only normative relationship commitment is necessary when users perceive switch dependence. Normative relationship commitment also plays a more important role than instrumental relationship commitment in facilitating the adoption of 3PL logistic outsourcing. In addition, both basic and advanced outsourcing practices have a positive effect on service quality.

Originality/value

This study contributes to both 3PL theories and practices by clarifying how relationships between 3PL users and providers in China are managed.

Details

International Journal of Physical Distribution & Logistics Management, vol. 45 no. 9/10
Type: Research Article
ISSN: 0960-0035

Keywords

Article
Publication date: 2 July 2018

Mohammadreza Akbari

The purpose of this paper is to provide a structured literature review (SLR) and systematic insight into logistics outsourcing research, in order to identify gaps in knowledge…

5466

Abstract

Purpose

The purpose of this paper is to provide a structured literature review (SLR) and systematic insight into logistics outsourcing research, in order to identify gaps in knowledge, and provide future research direction in the logistics outsourcing discipline.

Design/methodology/approach

This paper identifies and synthesises information from academic journals and examines research designs and methods, data analysis techniques, geographic locations, industry engagements, year of publication, publishers, university and author affiliations. A collection of online databases from 1991 to 2016 were explored, using the keywords “third-party”, “logistics” and “outsourcing” in their title and/or abstract, to deliver an inclusive listing of journal articles in this discipline area. Based on this approach, a total of 263 articles were found and data were derived from a succession of variables.

Findings

There has been a significant increase and concentration by researchers over the past 25 years focussing on logistics outsourcing. A need to implement best practice has been universally identified, owing to increasing global supply chain complexity. This analysis shows that only seven literature reviews were published in the logistics outsourcing discipline. Additionally, this study revealed that 42 per cent of the work in this field was found to be survey based and this trend in research indicates the development of the structural equation modelling and multi-criterion decision-making methods. Investigations between 2010–2012 and 2015–2016 accounted for 151 of the total 263 articles published. Finally, reverse logistics is an area that requires special attention.

Research limitations/implications

This paper is limited to a review of academic articles obtainable from online databases, containing the words “logistics” and “outsourcing” in the title and/or abstract. Additionally, only papers from high quality, peer-reviewed journals were evaluated. Other academic sources such as books and conference papers were not included in this study.

Originality/value

This review will provide an increased understanding of the existing state of current research, trends and future research directions in the logistics outsourcing discipline.

Details

Benchmarking: An International Journal, vol. 25 no. 5
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 29 August 2019

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.

Article
Publication date: 16 February 2015

Saleh Fahed Alkhatib, Robert Darlington and Trung Thanh Nguyen

The purpose of this paper is to provide an insight to the outsourcing decision-making through investigating if the old evaluation/selection criteria and methods still fit with…

3286

Abstract

Purpose

The purpose of this paper is to provide an insight to the outsourcing decision-making through investigating if the old evaluation/selection criteria and methods still fit with current business priorities or not and, therefore, to identify the appropriate criteria and methods to develop a new selection framework. Since the economic recession of 2008, logistics outsourcing decisions have become more prominent to avoid high fixed costs and heavy investment requirements and to achieve competitive advantages.

Design/methodology/approach

This is a focused literature review prepared after analyzing 56 articles related to the logistics service provider (LSP) evaluation and selection methods and criteria during 2008-2013. The academic articles are analyzed based on research focus/area, evaluation and selection methodology/methods and evaluation and selection criteria. Then reviewed result is compared with previous literature studies for the periods (1991-2008) to identify any possible shifts.

Findings

The review reveals that: several problems in current LSPs literature have been identified; the reviewed papers can be categorized into seven groups, the usage and importance of evaluation and selection criteria fluctuate during different periods; 12 crucial criteria have been identified, increasing the importance of specific selection methods and the integrated models and fuzzy logic in logistics literature. Then, a comprehensive LSPs’ evaluation and selection framework has been developed.

Originality/value

To the best of our knowledge, this is the first focused logistics outsourcing study that reviews the 2008-2013 period in detail, comparing results with previous literature studies, identifies current LSPs literature problems/gaps, new trends and shifts in the way that LSPs are evaluated and selected, identifies crucial selection criteria and proposes a new holistic LSPs evaluation and selection framework. In addition, it identifies important issues for future research.

Details

Strategic Outsourcing: An International Journal, vol. 8 no. 1
Type: Research Article
ISSN: 1753-8297

Keywords

Article
Publication date: 1 July 2006

Eleonora Bottani and Antonio Rizzi

To present a multi‐attribute approach for the selection and ranking of the most suitable 3PL service provider.

6672

Abstract

Purpose

To present a multi‐attribute approach for the selection and ranking of the most suitable 3PL service provider.

Design/methodology/approach

The approach is based on the TOPSIS technique (Technique for Order Preference by Similarity to Ideal Solution) and the fuzzy set theory.

Findings

A quantitative methodology based on a structured framework, for the selection of the most appropriate 3PL service provider.

Research limitations/implications

Future research may attempt to compare the results of the methodology proposed with those of other Multi Attribute Group Decision Making methods. In particular, the selection tree could be developed in a multi‐tier hierarchy, trying to punctually address the relationships between the upper tier criteria and the lower level ones. With multi‐tier hierarchies, the performance of AHP could be compared with the one obtained with TOPSIS, not only with respect to “technical suitability” but also in terms of easiness to implement, shortcomings and general managerial viability.

Practical implications

From the application of the methodology to a real case, the approach proposed emerges as an appropriate tool, which makes it possible to easily and effectively rank alternatives. Conversely the most critical issue pointed out by the real case application is the preliminary “request of information” phase, which has to be given critical attention. The availability of a well structured body of knowledge about potential candidates emerged as the true discriminant for an effective analysis.

Originality/value

The originality of the paper is threefold: first, an original framework of criteria for the selection of the most suitable 3PL service provider is presented. Second, an original methodology based on a fuzzy TOPSIS approach is presented. Third, the practical implications and drawbacks are discussed by means of a real case application.

Details

Supply Chain Management: An International Journal, vol. 11 no. 4
Type: Research Article
ISSN: 1359-8546

Keywords

Article
Publication date: 20 April 2012

C.K.M. Lee, Yu Ching Yeung and Zhen Hong

The purpose of this paper is to present a generic framework to assess and simulate outsourcing risks in the supply chain.

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Abstract

Purpose

The purpose of this paper is to present a generic framework to assess and simulate outsourcing risks in the supply chain.

Design/methodology/approach

This combination approach involves a qualitative risk analysis methodology termed as the supply chain risk‐failure mode and effect analysis (SCR‐FMEA) which integrates risk identification, analysis and mitigation actions together to evaluate supply chain outsourcing risk. The qualitative risk assessment will allow risk manager to provide a visual presentation of imminent risks using the risk map. Monte Carlo simulation (MCS) on the imminent risks of delivery outsourcing using the Milk‐Run system is adopted.

Findings

With basic statistical concepts, key performance variables and the risk of delivery outsourcing are analyzed. It is found that a newly implemented delivery outsourcing arrangement on the Milk‐Run system reduces the average customer lead‐time and total cost. However, a certain extent of risk or uncertainty can still be detected due to the presence of variation.

Research limitations/implications

This paper reveals that company can manage the risk by adopting a systematic method for identifying the potential risks before outsourcing and MCS can be applied for examining the quantifiable risks such as lead time and cost.

Practical implications

The paper provides a generic guideline for practitioners to assess logistics outsourcing, especially for logistics management consultants and professionals for evaluating the risk and impact of outsourcing. It is believed that the proposed risk assessment framework can help to analyze the operational cost uncertainty and ensure the stability of the supply chain. However, the limitation of this research is that the full spectrum of outsourcing risk, especially the non‐quantifiable risk may not be analyzed by MCS.

Originality/value

This paper proposed an integrated framework which combines qualitative and quantitative method together for managing outsourcing risk. This research provides a standardized metric to quantify risk in the supply chain so as to determine the effectiveness of outsourcing.

Details

Industrial Management & Data Systems, vol. 112 no. 4
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 5 October 2015

Satyendra Kumar Sharma and Vinod Kumar

Selection of logistics service provider (LSP) (also known as Third-party logistics (3PL) is a critical decision, because logistics affects top and bottom line as well. Companies…

1632

Abstract

Purpose

Selection of logistics service provider (LSP) (also known as Third-party logistics (3PL) is a critical decision, because logistics affects top and bottom line as well. Companies consider logistics as a cost driver and at the time of LSP selection decision, many important decision criteria’s are left out. 3PL selection is multi-criteria decision-making process. The purpose of this paper is to develop an integrated approach, combining quality function deployment (QFD), and Taguchi loss function (TLF) to select optimal 3PL.

Design/methodology/approach

Multiple criteria are derived from the company requirements using house of quality. The 3PL service attributes are developed using QFD and the relative importance of the attributes are assessed. TLFs are used to measure performance of each 3PL on each decision variable. Composite weighted loss scores are used to rank 3PLs.

Findings

QFD is a better tool which connects attributes used in a decision problem to decision maker’s requirements. In total, 15 criteria were used and TLF provides performance on these criteria.

Practical implications

The proposed model provides a methodology to make informed decision related to 3PL selection. The proposed model may be converted into decision support system.

Originality/value

Proposed approach in this paper is a novel approach that connects the 3PL selection problem to practice in terms of identifying criteria’s and provides a single numerical value in terms of Taghui loss.

Details

Benchmarking: An International Journal, vol. 22 no. 7
Type: Research Article
ISSN: 1463-5771

Keywords

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