Strategic-development-of-third-party-logistics-pro

StrategicdevelopmentofthirdpartylogisticsprovidersSusanneHertz*,MonicaAlfredsson1DepartmentofMarketing,DistributionandIndustryDynamics,StockholmSchoolofEconomics,POBox6501,11383Stockholm,SwedenAbstractThegrowthoftheThirdPartyLogistics(TPL)businesshascausedmanyfirmsfromdifferentindustriestoenterthefield.Weareinterestedinhowtheirdifferentstrategiesdevelopovertimewithaspecialfocusonhowtheybalancebetweengeneralproblemsolvingcapabilityandthedegreeofcustomeradaptation.Inthedevelopmentoftheirstrategythenewlyenteredfirmsshowntobehighlyinfluencedbyexistingbusinessanditsnetwork.However,atalaterstagethecasefirmswereallfocusedonmovingintomoreadvancedandcomplexservices(4pltypeofservices)withoutconsiderationstotheirtraditionalbusinessstrategy.WehavealsoidentifiedsomeissuesofimportancewhenmanagingthecontinuedTPLbusinessstrategy.OneissueisabouttheorganisationoftheTPLbusinessanditsneedforneutralityfromtraditionalbusiness.ThenextissueisabouttheinternationalisationoftheTPLbusinessandtheneedofapartlydifferentpatternandnetwork.Finally,theissueofcopingwithstrategicalliances,mergersandacquisitionsseemsvitalforunderstandinganddevelopingthebusiness.D2002ElsevierScienceInc.Allrightsreserved.1.BackgroundThethirdpartylogistics(TPL)providerbusinessisdevelopingasaresultoftheemergingdemandofadvancedlogisticsservices.Globalization,leadtimereductions,cus-tomerorientation,andoutsourcingaresomemajorchangescontributingtothisinterestinlogistics.Integrationofthesupplychainhasbecomeanimportantwayforindustrytogaincompetitiveadvantage[10,12].Asaresult,theroleoflogisticsprovidersischangingbothincontentandincomplexity.Newfirmsfromdifferentfieldsareenteringthemarketcompetingwiththetraditionaltransportandwarehousingfirms.ThispaperwillbeaboutTPLprovidersasplayersinagrowthindustryandhowtheychangewithintheirrelation-shipswithcustomers,customers’customers,andpartnersinordertofulfilthenewdemands.ThewaytheTPLprovidersmanagetherelationshiptoitscustomersandhandleeffectsonthetotalnetworkofrelationshipswillbeofbasicimportancefortheirstrategicedgeonthemarket.Todevelopskills,competencies,andgainscale/scopeadvantagesthataresuperiortocustomerswillbenecessaryinordertoaddcustomervalue.Suchadevelopmentmostlynecessitatesco-utilizationofresources,creationofspecificknowledge,andcoordinationofactiv-itiesofaportfolioofcustomers.Therefore,amainchallengeforaTPLprovideristobalancebetweenanabilityofhighadaptationtoindividualcustomersandorganizingthesystemsandthebusinessforcoordinationofseveralcustomers.ThewaythisisbalancedwillguidethestrategicdevelopmentoftheTPLprovidersandisofvitalimportancefortheresourcesneeded,activitiestobeperformed,andcorecompetencedevelopment.OnlyafewstudieshavebeenaboutTPLprovidersasfirms,theirstructureandcategorization[7].LittleinteresthasbeenpaidtohowthedevelopmentoftheirrelationshipshasinfluencedtheTPLproviderintheirstrategicdevel-opment.Moststudieshavetakenshipper’sperspectiveonlogisticsalliances,itsdevelopmentovertime,andthetypeandevaluationoftheservicesofferedbyTPLproviders[4,6,17].Ourpurposeistostudyhowtherelationshipdevel-opmentoftheTPLprovidersinfluencesthestrategicdevel-opmentintermsofcustomercoordinationand/oradaptationandhowitshiftsovertime.Beinganintermediarybetweenbuyersandsellersmakesitnecessarytounderstandalsotheinfluenceoftheotherconnectedactorsuchascustomers’customerorsupplier.Empirically,weusecasestudiesofdifferenttypesofTPLproviders,theircustomers,andcustomers’customersforillustration.0019-8501/02/$–seefrontmatterD2002ElsevierScienceInc.Allrightsreserved.PII:S0019-8501(02)00228-6*Correspondingauthor.Tel.:[phone];fax:[phone].E-mailaddresses:[e-mail](S.Hertz),[e-mail](M.Alfredsson).1Tel.:[phone];fax:[phone].IndustrialMarketingManagement32(2003)139–1492.TheliteratureframeworkOurtheoreticalbaseisthenetworkapproach,whichiswellsuitedfortheunderstandingoftheinterconnectedrelationshipsandrelationshipdevelopmentamongTPL,itscustomers,thecustomers’customerorsupplier.Thisapproachiscombinedwiththesupplychainmanagementandbusinesslogisticsliterature,whichwillbeusedtounderstandTPLproviders’business,theroleofTPLpro-viders,andfinally,categorizationandstructuresofTPLproviders.Theframeworkisdividedintothreeparts.ThefirstpartisadiscussionofthedefinitionandtheuseofTPLproviders,whilethesecondpartdescribestheTPLprovidersintermsofadaptationagainstgeneralabilitiesandcustomercoordination.Thethirdpartisaboutrelationshipandnet-workdevelopmentanditseffects.TogethertheywillbethebaseforunderstandingthedevelopmentofTPLprovidersbalancingbetweenadaptationofsinglecustomersandcreatingmoregeneralcompetenciesasabaseforcustomercoordination.2.1.TPLprovidersATPLproviderisanexternalproviderwhomanages,controls,anddeliverslogisticsactivitiesonbehalfofashipper.Thisrelationshipcanbeformalorinformal.Theintentionisthatitshouldbeamutuallybeneficialandcontinuousrelationship.Theactivitiesperformedcanincludeallorapartofthelogisticsactivitiesbutatleastmanagementandexecutionoftransportandwarehousingshouldbeincluded[9].Therelationshipb