An in-depth case study of a modular service delivery system in a logistics context

• DOI: https://doi.org/10.1108/IJLM-07-2020-0295
• Published date: 30 April 2021
• Date: 30 April 2021
• Pages: 872-897
• Subject Matter: Management science & operations,Logistics
• Author: Frédéric Ponsignon,Phil Davies,Andi Smart,Roger Maull

An in-depth case study of a

modular service delivery system

in a logistics context

Fr

ed

eric Ponsignon

Operations Management, Kedge Business School Bordeaux, Talence, France

Phil Davies

Henley Business School, University of Reading, Reading, UK, and

Andi Smart and Roger Maull

University of Exeter, Exeter, UK

Abstract

Purpose –The objective of this work is to empirically investigate the design of a service delivery system that

supports the provision of modular service logistics offerings.

Design/methodology/approach –An in-depth single-case study relying on interview data and extensive

documentary evidence is carried out in the business-to-business (B2B) logistics sector. Three main analytical

techniques are used to make sense of the qualitative data: thematic analysis, process mapping and the

application of modular operators.

Findings –A modular service delivery system comprises three types of processes that collectively deliver

modular offerings. The platform consists of core processes that enable the collection, transport and delivery of

physical items for all offerings (modular and non-modular). Dedicated modular processes are mandatory and

exclusive to individual modular offerings. Optional modular processes are shared across several modular

offerings. Interfaces regulate physical(e.g. parcels or parts) and information(e.g. booking data) inputs provided

by the customer in order to control the interdependencies within these different process types.

Practical implications –The identification of three process types and their interdependencies provides

detailed insights into how managers can design modular logistics services that benefit from economies of scale

and meet increasingly variable customer requirements. The importance of well-designed interfaces among the

customers, the service offering and the service delivery system is highlighted.

Originality/value –This study extends previous modularity studies inservice logistics. It is the first study to

apply modular operators to determine the presence of modularity in the service delivery system and to

establish the role of different process types in enabling modularity in the service delivery system.

Keywords Logistics services, Modularity, Service delivery system, Case study, Modular operators

Paper type Research paper

1. Introduction

Increasingly, providers of logistics services manage important portions of their customers’

supply chain activities (Zacharia et al., 2011), which leads them to assume a strategic position

and to be seen as core service providers (Piecyk and Bj€

orklund, 2015). The outsourcing of

logistics services has thus become a mainstream in the industry (Mathauer and Hofman,

2019). The worldwide market is estimated to be worth over $200 bn and to continue to grow

strongly in the coming years [1]. This trend, along with heightened competitive pressures,

deregulation, the rise of e-commerce and increasingly sophisticated customer requirements,

has forced logistics service firms to become more innovative (Busse and Wallenburg, 2011).

Solutions have expanded beyond basic transportation and storage and include, for instance,

time-critical supply and return of spare parts; the planning, implementation and controlling

of reverse logistics, as well as performance monitoring and business consulting (Selviaridis

and Norrman, 2015). As noted by Hazen and Ellinger (2019), such offerings are a way to

provide superior customer value and act as a competitive differentiator. However, offering

bespoke solutions is cost-prohibitive and likely to hinder competitiveness in the long run

(Kumar and Reinartz, 2016).

IJLM

32,3

872

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 21 July 2020

Revised 27 November 2020

15 February 2021

2 April 2021

Accepted 12 April 2021

The International Journal of

Logistics Management

Vol. 32 No. 3, 2021

pp. 872-897

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-07-2020-0295

Against this background, the potential benefits of modular solutions that fulfill the

specific needs of individual customers in a cost-effective way has been recognized (Cabigiosu

et al., 2015;Rajahonka, 2013;Yang and Lirn, 2017). Modularity provides distinct

opportunities to improve operational performance and increase firm competitiveness

(Baldwin and Clark, 1997;Miozzo and Grimshaw, 2005) by simultaneously allowing for the

amplification of variety of the product service portfolio while attenuating variability within

the operational system (Salvador et al., 2002). Amplification is achieved through the

configuration of modular components to meet customer requirements, enabling effectiveness.

Attenuation simplifies the operational system and enables efficiency.

Scholars have claimed that “logistics services is a context with great potential for

exploitation of service modularity”(Brax et al., 2017, p. 689). Modularity has a long tradition

within general systems and manufacturing operations (e.g. Baldwin and Clark, 1997), but its

application in service logistics is more contemporary (Lin and Pekkarinen, 2011). Although

logistics services have received scholarly attention, for example, Pohjosenper€

aet al. (2019)

and Dubois et al. (2019) recently highlighted the benefits of modularity for both customization

and efficiency in the contexts of healthcare and construction logistics; the extant literature

remains limited in two main aspects. First, existing studies do not directly demonstrate that

modularity is actually applied. It is assumed that modularity exists with limited empirical

evidence to support whether this is actually the case. Second, a detailed and comprehensive

understanding of the characteristics of modularity at the operational level is missing. The

objective of this work is therefore to empirically investigate the design of a service delivery

system that supports the provision of modular service logistics offerings. To satisfy this

objective, we seek to address the following research question: “What are the design

characteristics of a service delivery system that supports modular logistics service offerings?”

The paper is structured as follows. First, we present a theoretical background that focuses

on both the foundations of modularity theory and the service design literature, before

integrating these bodies of knowledge with those studying modular logistics services. We

then introduce our case study methodology, followed by the findings and discussion before

concluding with limitations and future research directions.

2. Theoretical background

2.1 Foundations of modularity

Modularization permits a degree of customer-perceived variety, while controlling for cost and

complexity (Starr, 2010). This is achieved through a common platform and predetermined

interfaces allowing for the interchange of modules (Baldwin and Clark, 1997). The theoretical

model presented in Figure 1 illustrates these concepts and their relationships. A modular

system consists of a core platform (P) that is common and mandatory. A number of modules

(M) can be combined with this platform as a means to provide customization. In this case,

M1b

M3

P

M1a

M2b

M2a

Figure 1.

A generic model of

modularity

Modular

service

delivery

system

873