The impact of information on a 3PL-relationship

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3PL for the past ten years

As mentioned in the beginning of this chapter, outsourcing has become a growing trend. The use and importance of 3PL-providers are steadily growing around the world and one can interpret the 3PL-market today, at least to some extent and with cautiousness be referred to as perfect competition, characterized by low profit margins. Since new areas of interest are arising for companies on why they will outsource, for a 3PL-provider of-fering solely low price is not a winning strategy (Cheong, 2003). In the middle of 2000s the average usage of 3PL services by companies in Western Europe was between 76 percent and 79 percent (Langley et al. 2009). The growth has shown itself in two main ways, increase in number of buyers of logistic services and through the increase in the extent of usage of logistic services (Cheong, 2003).
The value adding 3PL-providers of today initially emerged from companies involved in transportation and warehousing services in the early 1990s (Selviaridis & Spring, 2007). These two services are still to-day the most common ones being performed by 3PL-providers (Langley et al., 2009). However is the viewpoint changing when going from the perspective of viewing the goods as the primary part, where tangible output and transactional discretion was cen-trally, to consider the service as the primary, where instead exchange processes, intan-gibility and relationships are in the central focus. Vargo and Lusch (2004) are defining services as the function of dedicated competences (skills and knowledge) through pro-cesses, performances and deeds for the benefit of the own entity or of another entity.

Challenges

Despite the fact that outsourcing and 3PL-solutions is rooted way back it is in some es-sence still in its infancy. According to Langley´s (2005) study the majority of compa-nies in use of a 3PL-provider consider their relationship to be successful, nonetheless are the majority also eager to express and suggest areas of improvement to the relation-ship. Some of the concerns presented by Langley (2005) are:
Service level commitments not realized
– Cost “creep” and price increases once relationships begins
– Lack of continuous, ongoing improvements
– Cost reductions not realized
– Time and effort spent on logistics not decreased
– Lack of strategic management skills
– Unsatisfactory transition during implementation stage
– Not keeping up with IT advances
– Inability to form meaningful, trusting relationships
– Lack of consultative knowledge-based skills
– Lack of global capabilities
A relationship problem that is located in the implementation phase has often been con-cerned about the failure for outsourcing firms to properly manage providers and the mismatch with understanding their counterpart. These circumstances are rooted in inad-equate information sharing between the parties and subsequent problems with using the right context for their cooperation (Razzaque & Sheng, 1998; Bagchi & Virum, 1998; Knemeyer & Murphy, 2005; Panayides, 2007).
The suggestions for improvement are comprehensive and many, this support the state-ment that this industry in some essence still is in its infancy. When observing challenges for 3PL-providers it is inevitable to cross the path related to relationship-issues.
This since several scholars are reconnecting and highlighting the relationship to be the most crucial and essential area of discussion when elaborating on 3PL challenges (Cheong, 2003; Langley et al. 2009; Stefansson, 2006; Skjoett-Larsen, 2000). In “Third party logistics – from an inter-organizational point of view” from 2000 Skjoett-Larsen presents a mapping on relationship derived from Bowersox, Daugherty, Dröge, Rogers & Wardlow (1989). See figure 2-2.

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1 Introduction
1.1 Background
1.2 Problem Definition
1.3 Purpose
1.4 Research Questions
1.5 Limitations
2 Frame of Reference
2.1 Third party logistics
2.2 Information
2.3 The impact of information on a 3PL-relationship
2.4 Customer Value.
3 Methodology
3.1 Introduction
3.2 Research approach .
3.3 Research reasoning .
3.4 Research strategy
3.5 The literature study
3.6 Introduction to case study
3.7 Using the empirical findings
3.8 Research limitations
3.9 Validity
4 Empirical Finding
4.1 Relationship 1
4.2 Relationship 2
4.3 Relationship 3 .
4.4 Empirical summary
5 Analysis.
5.1 Relationship
5.2 Information Requirements
5.3 Communication methods
5.4 Customer Value
5.5 Modification of framework
6 Conclusion
6.1 Future research and Managerial Implications
List of references
7 Appendix