The development of outbound logistics services in the automotive industry. A logistics service provider’s view

• Published date: 14 November 2016
• Pages: 707-737
• DOI: https://doi.org/10.1108/IJLM-08-2012-0082
• Date: 14 November 2016
• Author: Mervi Rajahonka,Anu Bask
• Subject Matter: Management science & operations,Logistics

The development of outbound

logistics services in the

automotive industry

A logistics service provider’s view

Mervi Rajahonka

Department of Business Technology,

Aalto University School of Economics, Helsinki, Finland, and

Anu Bask

Department of Information and Service Economy,

Aalto University School of Business, Helsinki, Finland

Abstract

Purpose –The automotive industry has been studied extensively, but few studies focus on outbound

logistics in automotive supply chains, or on the logistics service provider’s (LSP’s) point of view.

Furthermore, there is hardly any research on service model innovation in LSPs. The purpose of this

paper is to narrow these research gaps.

Design/methodology/approach –The analysis is based on a single-case study –an LSP that

specializes in services for the automotive industry. The paper examines the company’s service models

and their development over time.

Findings –The findings show how the case company has moved towards multifaceted service models

through a number of radical and incremental innovations. Moreover, it has used the same methods in

developing all its new service models, and has applied modularity principles in service innovation to

achieve better process efficiency and service effectiveness.

Research limitations/implications –The rather narrow focus of this study –automotive logistics

in a specific area –decreases the generalizability of the findings beyond this context. However, the

single-case approach offers in-depth insights, and the analytical frameworks developed herein for

service models is applicable in other contexts.

Practical implications –The analysis may help LSPs and service companies in their service design

and development. The use of modularity principles makes it easier to offer mass-customized services

and to develop efficient processes.

Originality/value –This study narrows a research gap in examining outbound logistics services in

the automotive supply chain and focussing on the LSP’s perspective.

Keywords Automotive industry, Service innovation, Logistics service provider, Modularity,

Outbound logistics, Service model

Paper type Research paper

1. Introduction

The automotive industry can be described as one of the largest and most multinational

of all industries (European Foundation for the Improvement of Living and Working

Conditions, 2004). But the related research literature has mainly concentrated on the

The International Journal of

Logistics Management

Vol. 27 No. 3, 2016

pp. 707-737

©Emerald Group Publis hing Limited

0957-4093

DOI 10.1108/IJLM-08-2012-0082

Received 20 August 2012

Revised 7 April 2014

9 January 2015

19 January 2015

10 May 2015

Accepted 10 October 2015

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

www.emeraldinsight.com/0957-4093.htm

The authors wish to thank SE Mäkinen Logistics Oy for the thorough and illuminating

discussions held on several occasions, and for the commitment that enabled deep analysis of the

case company. The authors thank the anonymous reviewers for their helpful comments for

developing the paper. The authors also highly appreciate the Aalto University Service Factory

for partially funding this research.

707

Development

of outbound

logistics

services

manufacturer’s perspective, namely on manufacturing, supply networks and in-bound

logistics (Holweg and Miemczyk, 2003; Pfohl and Gareis, 2005; Fredriksson, 2006;

Trappey et al., 2010). Research agendas have emphasised the expanding of boundaries,

and the importance of analysing supply chains in a network or industry range

(Roth and Menor, 2003; Selviaridis and Spring, 2007; Stank et al., 2011). The literature

describes the industry’s efforts to become more customer-oriented by employing

mass-customisation strategies, and more efficient by employing outsourcing of

manufacturing operations, and networking strategies (Holweg and Miemczyk, 2003;

Pfohl and Gareis, 2005; Fredriksson, 2006; Reichhart and Holweg, 2008). This

development has been enhanced by the widespread application of modularity

principles in the automotive industry (Doran, 2004).

However, few researchers have focussed on the outbound logistics of the automotive

supply chain, and even fewer on the logistics service provider’s (LSP’s) role between

manufacturers and dealers, or on how their service models have developed over the

decades. In order to gain a holistic view of the automotive supply ch ain, it is essential to

get in-depth insights of the downstream of the automotive supply chain and from the

LSP’s point of view, as LSPs have become increasingly important links between

manufacturers and retailers. Service innovation is a multidimensional phenomenon

that is not yet well understood (Sundbo, 1997; den Hertog et al., 2010). Innovation in

services, and particularly in logistics services, has not been studied much, and more

research is needed (Grawe, 2009; Busse and Wallenburg, 2011). The aim of this study is

to fill these research gaps.

We examine one case company to gain an in-depth understanding of how outbound

logistics services have been developed over time for the automotive supply chain.

We are particularly interested in studying how service innovations have been

developed, and the role of modularity and customisation in this development.

Modularity is interesting, as it has been used for decades in the mass-customisation of

products, including those of the automotive industry (Doran, 2004; Fredriksson and

Gadde, 2005), but very little in the service context (Voss and Hsuan, 2009, Bask et al.,

2011). The research questions of this study are:

RQ1. How have the service models of the case company developed over time?

RQ2. What kind of service innovations could be found in the development of service

models?

RQ3. Has the case company used modularity and customisation in its service model

development, and if yes, how?

The paper is organized as follows: we start with the methodology and then move on to

a review of the literature on service models in logistics, service innovation in general,

and modularity and customisation in the automotive industry. After that, the single-

case company is presented, analysed and discussed. Finally, concluding remarks and

future research topics are presented.

2. Methodology

There has been a growing interest in business research in strategies based on qualitative

analysis and the use of the case study method (Yin, 1981, 1994; Eisenhardt, 1989;

McCutcheon and Meredith, 1993; Ellram, 1996; Vosset al., 2002). Qualitative methods are

particularlyjustifiable if the goal is to explain or understanda phenomenon, or to develop

understanding of real-world events, however case methodology has rarely been used in

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IJLM

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