Revisiting critical factors of logistics outsourcing relationship: a multiple-case study approach

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.