Characteristics of Logistics Outsourcing in Bulgaria: The Perspectives of the Logistics Service Providers and their Customers

Open access

Abstract

The increased demand and supply of logistics services bring together the logistics service providers (LSPs) and the companies that outsource logistics activities. LSPs stand in between those companies and their customers, thus playing an essential role for supply chain integration. If the two parties have different viewpoints of the processes in the supply chain, the fulfillment of the goal to satisfy the end customers may be hindered. The purpose of this article is two-fold: First, to investigate the characteristics of logistics outsourcing in Bulgaria from the perspectives of the logistics service providers and their customers, and more specifically, to compare their viewpoints concerning the motives for outsourcing, the methods and contents of communication and some relationship management aspects; Second, to assess the relations of the communication and relationship management aspects to customer satisfaction. This article is based on empirical data provided by 138 manufacturing and trading companies and 136 LSPs and collected through two structured questionnaires designed to address the researched issues. The data were analyzed using descriptive statistics and the independent samples t-test. The research found that the service related reasons for logistics outsourcing are prevailing and that LSPs overestimate, compared to manufacturing and trading companies, motives related to service, organizational capabilities and relationships, while more manufacturing and trading companies concern as important the availability of logistics assets and the provision of value-added services. The research also found that both the LSPs and their customers consider that the extent of sharing of knowledge and information essential for material flow integration is very low and that the usage of team meetings and joint teams is quite rare. Also, customers do not view their relationships with the LSPs as so collaborative as viewed by the LSPs. Furthermore, the research proved the existence of positive relationships between customer satisfaction and communication through team meetings and joint teams, knowledge sharing concerning material flow management and relationship management issues such as trust, mutual problem solving, understanding the logistics strategy of the other party and respecting its financial interests. The research findings may help fill in some of the gaps between LSPs and their customers. They point the need for LSPs to include in their service offerings more value-added services and to invest in assets that provide reliable and flexible services for their customers. The research also highlights the importance of knowledge sharing and trust building and reveals great potential for effective trust-based alliances between LSPs and their customers that could help them extract more competitive benefits from their relationships.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • 1. K. Gotzamani P. Longinidis and F. Vouzas “The logistics services outsourcing dilemma: quality management and financial performance perspectives” Supply Chain Management: An International Journal vol. 15 no. 6 pp. 438–453 September 2010.

  • 2. S. J. Grawe P. J. Daugherty and P. M. Ralston “Enhancing dyadic performance through boundary spanners and innovation: An assessment of service provider–customer relationships” Journal of Business Logistics vol. 36 no. 1 pp. 88–101 March. 2015.

  • 3. P. R. Murphy and R. Poist “Third-party logistics usage: an assessment of propositions based on previous research’’ Transportation Journal vol. 37 no. 4 pp. 26–35 Summer 1998.

  • 4. D. Power M. Sharafali and V. Bhakoo “Adding value through outsourcing” Management Research News vol. 30 no. 6 pp. 228–235 February 2007.

  • 5. Y. Song T. E. Maher J. D. Nicholson and N. P. Gurney “Strategic alliances in logistics outsourcing” Asia Pacific Journal of Marketing and Logistics vol. 12 no. 4 pp. 3–21 December 2000.

  • 6. H. S. Jaafar and M. Rafiq “Logistics outsourcing practices in the UK: a survey” International Journal of Logistics Research and Applications: A Leading Journal of Supply Chain Management vol. 8 no. 4 pp. 299-312 January 2005.

  • 7. S. Boyson T. Corsi M. Dresner and E. Rabinovich “Managing effective third party relationships: What does it take?“ Journal of Business Logistics vol. 20 no. 1 pp. 73–97 1999.

  • 8. R. Lieb and B. A. Bentz “The use of third-party logistics services by large American manufacturers: The 2004 survey” Transportation Journal vol. 44 no. 2 pp. 5–15 Spring 2005.

  • 9. T. Solakivi J. Töyli and L. Ojala “Logistics outsourcing its motives and the level of logistics costs in manufacturing and trading companies operating in Finland” Production Planning & Control: The Management of Operations vol. 24 no. 4-5 pp. 388–398 January 2013.

  • 10. S. E. Fawcett A. M. Fawcett B. J. Watson and G. M. Magnan “Peeking Inside the black box: Toward an understanding of supply chain collaboration dynamics” Journal of Supply Chain Management vol. 48 no. 1 pp. 44–72 January 2012.

  • 11. S. J. Grawe P. J. Daugherty and A. S. Roath “Knowledge synthesis and innovative logistics processes: Enhancing operational flexibility and performance” Journal of Business Logistics vol. 32 no. 1 pp. 69–80 March 2011.

  • 12. J. H. Dyer and H. Singh “The relational view: Cooperative strategy and sources of interorganizational competitive advantage” Academy of Management Review vol. 23 no. 4 pp. 660–79 October 1998.

  • 13. J. Jayaram and K. Tan “Supply chain integration with third-party logistics providers” Int. J. Production Economics vol. 125 no. 2 pp. 262–271 June 2010.

  • 14. K. J. Petersen R. B. Handfield B. Lawson and P. D. Cousins “Buyer dependency and relational capital formation: The mediating effects of socialization processes and supplier integration” Journal of Supply Chain Management vol. 44 no. 4 pp. 53–65 September 2008.

  • 15. K. M. Eisenhardt and C. B. Schoonhoven “Resource-based view of strategic alliance formation: Strategic and social effects in entrepreneurial firms” Organization Science vol. 7 no. 2 pp. 136–50 March-April 1996.

  • 16. P. D. Cousins B. Lawson K. J. Petersen and R. B. Handfield “Breakthrough scanning supplier knowledge exchange and new product development performance” Journal of Product Innovation Management vol. 28 no. 5 pp. 930–42 November 2011.

  • 17. H. I. Hsiao R. G. M. Kemp J. G. A. J. van der Vorst and S. W. F. (Onno) Omta “A classification of logistic outsourcing levels and their impact on service performance: Evidence from the food processing industry” Int. J. Production Economics vol. 124 no. 1 pp. 75–86 March 2010.

  • 18. J. E. Mello T. P. Stank and T. L. Esper “A model of logistics outsourcing strategy” Transportation Journal vol. 47 no. 4 pp. 5–25 Fall 2008.

  • 19. Langley J. and CapGemini Third-Party Logistics Study. The State of Logistics Outsourcing. Results and Findings of the 19th Annual Study 2015.

Search
Journal information
Cited By
Metrics
All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 650 260 7
PDF Downloads 353 132 6