Third Party Logistics Relationship (TPLR) Success Factor: Operational Perspective

Abstract

Outsourcing is dominant in many businesses to achieve competitive advantage and logistics outsourcing has been the focus for many businesses in industrial markets. Contracting out full or some of logistics activities to the expert that called as third party logistics provider (TPL) is conceded as core strategy to obtain competitive advantage for many manufacturers in many industries. However, we know little about logistics outsourcing relationship or also known as third party logistics relationship especially with regards to operational perspectives and how does it affects the success of any logistics relationship. Using Malaysia as a research setting and transaction cost theory (TCT) as the theoretical lenses, this paper explicates the relationship between automotive manufacturer (AM) and TPL. The focus of this study is both AM and TPL with dyadic as a unit of analysis in this research. This study demonstrates that several operational factors are critical needed to establish successful third party logistics relationship (TPLR) between AM and TPL. The five key operational factors examine in this study are known as the use of technology, the price of logistics service, information sharing between AM and TPL, investment on asset and system, as well as logistics service performance.  The discussion of this study is grounded in seven case studies (multiple case analyses) in the automotive sector in Malaysia. To increase the reliability of case study research, this study follows established case study protocol guideline. The findings supply chain relationship and logistics domain of study. The originality and novelty of this research is on its unique context which is focus on the operational factor of TPLR in one specific industry namely automotive, in Malaysia, and the investigation is from a dyadic perspective. Key findings from this research may give positive impact to the practitioners via the development of novel on TPLR (third party logistics relationship) success factor.  Additionally, the study may transferrable to other context that has similar environments.