Integration, supply chain resilience, and service performance in third-party logistics providers

• Date: 12 February 2018
• DOI: https://doi.org/10.1108/IJLM-11-2016-0283
• Published date: 12 February 2018
• Pages: 5-21
• Author: Chiung-Lin Liu,Ming-Yu Lee
• Subject Matter: Management science & operations,Logistics

Integration, supply chain

resilience, and service

performance in third-party

logistics providers

Chiung-Lin Liu and Ming-Yu Lee

Department of Shipping and Transportation Management,

College of Maritime Science and Management,

National Taiwan Ocean University, Keelung, Taiwan

Abstract

Purpose –Supply chain resilience (SCR) is essential to the success of firms. However, very few studies have

focused on the relationships between different types of integration, SCR and service performance from the

perspective of third-party logistics providers (3PLs). The purpose of this paper is to develop and assesses a

conceptual model for these relationships.

Design/methodology/approach –A total of 161 3PLs in Taiwan were surveyed and their responses were

analyzed using partial least squares structural equation modeling (PLS-SEM/PLS).

Findings –The responses of respondents demonstrated that, of the three types of integration (internal

integration, customer integration and logistics collaborator integration) used by 3PLs, internal integration

had the greatest effect on SCR. Customer integration was found to have three fully mediating effects on the

relationships between internal integration and service performance, between logistics collaborator integration

and SCR, and between logistics collaborator integration and service performance.

Originality/value –This study provides useful information on how different types of integration manifest

in the SCR and service performance of 3PLs.

Keywords Asia, Structural equation modelling, Supply chain resilience, Integration,

Third-party logistics providers

Paper type Research paper

1. Introduction

Owing to increasing specialization and globalization, companies’supply networks have not

only become more complex but are also facing more frequent and diverse unpredicted

events (Moslemi et al., 2016). Recurrent natural and human-instigated disasters pose serious

challenges to supply chain management. For instance, the earthquake that struck

Kumamoto, Japan, in April 2016 led to a risk of disruption of the global automotive supply

chain (CNN, 2016). Therefore, in recent years, supply chain resilience (SCR) has become an

issue of great industrial and academic interest (Christopher and Peck, 2004; Hohenstein

et al., 2015; Petti et al., 2013).

Integration isone of the most important aspects of supplychain management (Huo, 2012).

Supply chain integration has been identified as a critical determinant of whether a company

can collaborate well with its supply chain partners, who typically favor service performance

(Zhang and Huo, 2013). Numerous studies have demonstrated the importance of integration

for a company’s performance (Huo, 2012; Zhaoet al., 2013; Zsidisin et al., 2015). Additionally,

many recent studies have noted that integration can enhance a company’sresilience

(Christopher and Peck, 2004; Jüttner and Maklan, 2011; Petti et al., 2013; Wieland and

Wallenburg, 2013). However, there has been relatively little attention given to empirical

studies of thepower of integration to explain SCR.Even less research has focused on the issue

from the perspective of third-party logistics providers (3PLs). 3PLs provide outsourced

logistics services that support some or all of the logistics functions required by customers

The International Journal of

Logistics Management

Vol. 29 No. 1, 2018

pp. 5-21

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-11-2016-0283

Received 29 November 2016

Revised 22 May 2017

1 July 2017

Accepted 27 July 2017

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

www.emeraldinsight.com/0957-4093.htm

5

Third-party

logistics

providers

(Mentzer et al., 2001).A 3PL is “external to the customer company andis compensated for its

services”(Virum, 1993). 3PLs have no commonly accepted sub-dimensions of integration.

A limited number ofstudies have elucidated the influences of integration onthe performance

of a 3PL when integrationis treated as a single dimension (Shang, 2009). Verylittle empirical

evidence bears on the question of whether different types of integration can simultaneously

affect the SCR and performance of a 3PL.

This study develops and evaluates a conceptual model of the relationships between

different types of integration, SCR and service performance from the perspective of a 3PL.

The following key question is addressed:

•How do internal integration, customer integration, and logistics collaborator

integration influence SCR and service performance in the 3PL sector?

This study makes various contributions to the relevant literature and practice. First, it

provides a theoretical framework to link internal integration, customer integration,

logistics collaborator integration, SCR and service performance for 3PLs. Second, it

investigates the effects of internal integration, customer integration, and logistic

collaborator integration on SCR and service performance. Third, this paper provides

evidence of the different effects of internal integration, customer integration and logistics

collaborator integration on SCR and service performance, improving our understanding of

the relationships between integration, SCR and service performance for 3PLs. Finally, this

study further elucidates several principles that can help managers of 3PLs allocate effort

and resources in different types of integration. These principles explain how each type of

integration should be managed to enhance SCR and service performance for 3PLs.

2. Literature review and research hypotheses

2.1 Resource-based view (RBV)

The RBV is taken to elucidate why companies perform differently and how they utilize

resources to maintain competitiveness and competitive advantages (Barney, 2001).

The RBV has been extensively utilized in logistics-related research to evaluate the

contributions of various resources to a company’s performance; these resources may include

information-based capabilities (Shang and Marlow, 2005), service capabilities (Liu and

Lyons, 2011), strategic environmental sourcing (Schoenherr et al., 2014) and reverse logistics

capabilities (Liu and Lyons, 2011; Vlachos, 2016). Previous studies have indicated that

integration can be treated as a resource that helps firms adapt to environmental changes

and rapidly respond to disruptions (Hohenstein et al., 2015; Ponomarov and Holcomb, 2009),

potentially improving firms’abilities to solve customers’problems and, thereby, improving

service satisfaction. The RBV can be used to determine the contribution of various types of

integration to firm performance. Various types of integration fall under the RBV’s definition

of resources, including internal integration (Huo, 2012; Liu et al., 2015), customer integration

(Huo et al., 2014; Zhao et al., 2013) and logistics collaborator integration (Shang, 2009).

This study takes the RBV perspective to evaluate the effects of different types of integration

(internal integration, customer integration and logistics collaborator integration) on both

SCR and service performance in the 3PL industry.

2.2 Integration

Zhao et al. (2013) indicated that integration can improve the operational performance of a

company by enhancing service efficiency, information flow, and cash flow through internal

and cross-organizational process management. Mellat-Parast and Spillan (2014) perceived

integration as a series of practical process es that involve internal and external

collaborations, the objective of which is to create operational and strategic effectiveness.

Previous studies examined integration from two perspectives –depth and width

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