Supply chain Essay Example

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5Thematic Analysis of Logistics Service Providers (LSP) of a Supply Chain


Thematic Analysis of a Logistics Service Providers (LSP) of a Supply Chain

An organization’s success deeply depends on the sufficiency of its supply chain management (SCM) such as integration, distribution, purchasing, and operations. Notably, the supply chain can become complex, thus requiring the company to outsource its activities so as to increase efficiency and redundancy. Outsourcing involves many activities; however, it can just be simply the logistics functions such as warehousing, labor, and transportation. The logistics service providers (LSP) come into the picture of any organization to provide solutions. Various concepts of the supply chain are understood and most importantly considered as strategies to facilitate the company success. Nevertheless, the importance and role of the LSP are mostly contradicted and misunderstand. As a result, this paper gives a contemporary thematic analysis of the LSP in the supply chain so that there can be a better understanding. While the LSP is a supply chain strategy, it is not clear how it is integrated into the supply chain.

Wang, Persson, and Huemer (2016) notes that there is a growing globalization of the economy, which in turn has spanned the supply chain across the world. Such changes have contributed to uncertainties and increases of risks that lead to the need to use of LSP, so that enable distribution service in all the industrial centers across the world. Aserkar, Kumthekar, and Inamdar (2017) emphasize that a company must first undertake a supply chain management analysis before deciding on the LSP. First of all, the firm must be sure of the skills that they require for LSP. At times this can lead to training and development of the staff and young professionals in South Asia.

Alternatively, Carter, Kosmol, and Kaufmann, (2017) believed that it is the resource that determines the need for logistic services or not. The authors suggested the use of Resource-based view (RBV) theory, relational view (RV), and Practice-based view (PBV) in pursuit of understanding the internal resources such as logistics that are necessary so as to enable the efficiency of the company. RBV shows that the internal resources are valuable, rare, inimitable, and non-substitutable (VRIN) such as logistics while PBV deals with all the practices such as experience that create a competitive advantage for the company. Qin et al. (2016) observed that due to the globalization, there is the rise of a new technique of the LSP which is online shopping service supply chain (OSSSC) which allows a company to undertake both the centralized and decentralized decisions about their supply chains. Finally, Sheikh and Rana (2014) believe that the use of LSP increases efficiency since the company can concentrate on the important goals while the LSP providers offer the company the needed services and operations.

Just like any corporate strategy, the LSP seeks to maintain environmental sustainability. Colicchia, Creazza, and Dallari (2017) believe that the Lean and Green Approach does not create production efficiency but also leads to environmental sustainability. Lean systems through the use of the intermodal transport systems enable the company to supply the fast moving consumer goods (FMCG) across the supply chains. Intermodal transport also allows the green supply chain systems through the use of environmentally friendly transportation systems. As a result, the companies which use Lean and Green Approach achieve not only sustainability, but also the competitive advantage in the industry. Similarly, Govindan, et al. (2014) emphasize the use of Green supply chain management (Green SCM) in the management of the supply chain so as to solve the environmental issues involved in procurement such as transportation of raw materials. Further, Lun et al. (2015) suggest the use of Greening propensity (GP) that includes the consumer contribution in the supply chain so as to achieve the environmental sustainability.

There are several ways of offering the logistics services depending on the outcome required. Giri and Sarker (2017) encourage the use of Third-party logistics service providers (TPLSP) when a company needs to outsource some of the activities such as transportation in within the enterprise. Further, the authors show that the TPLSP enables them to achieve the unexpected outcome. Further, Govindan, Soleimani, and Kannan (2015) talked about reverse logistics (RL) and Closed-loop supply chain (CLSC) which are the strategies of the SCM to manage how to utilize the LSP in creating value and improving performance. CLSC ensures maximum value creation from a product within its life cycle while RL guides on how to use the finished products to create more value. Manuj, Omar, and Pohlen (2014) stated that the third party executives and the grounded theory work hand in hand to come up with the primary constructs and insights that enable the effectiveness of the supply chain. In short, the authors suggested that the company undertakes organizational learning to understand the supply chain entities before they hire them. Alternatively, Martikainen, Niemi, and Pekkanen (2014) proposes the use of the business canvas model in the food chains so as to cover for the various levels of services that are required in the food supply chain to create efficiency.

Interestingly, Santibanez-Gonzalez and Diabat (2016) prefers the use of the Non-cooperative multi-layer supply chain model in dealing with the supply chain. The model has four frameworks which are retailers, consumers, wholesalers, and logistics that are mathematically modified to fit the needs of each company. Subramanian et al. (2016) suggested the use of 4th Party Logistics (4PL) service providers for the multi-international organization so that they can achieve creativity, innovation, and sustainability through collaborative operations. The companies might be miles apart; however, if they allow the mother firm to collaborate their activities them there will be the success. Finally, Thamsatitdej et al. (2016) state that since the use of Third- Party Logistics service providers (3PL) involves hiring a new firm to carry out some projects, a company should have an underlying reason. The authors observed that economic aspect drives the selection of LSP.

In conclusion, LSP is integrated into the supply chain to facilitate the efficiency of the SCM. Evidently, globalization and expansion of the companies are what is making the companies seek LSP. Alternatively, there is the lack of skilled labor within the companies. Notably, even the LSP strives to ensure environmental sustainability, and that is why there are themes such as Green Propensity and Green SCM. Finally, the LSP takes different forms depending on companies, for instance, the 3PL and 4PL service providers. Companies use different frameworks such as the business canvas models to determine the right LSP. Most importantly, most companies are driven by economic reasons in the selection of LSP.

Thematic Analysis Table

Key Themes

Description of Key Theme

Dominant Concept


Logistic supply chain management (SCM)

Career progression

Skills set for recruitment

Apparently, the SCM requires that the people employed at the Logistics department have some specific skills

Training and developing the young professionals.


Skills sets

Career progression.

Aserkar, Kumthekar, and Inamdar (2017)

Resource-based view (RBV) theory

relational view (RV)

Practice-based view (PBV)

RBV Theory explains about the internal resources which are valuable, rare, inimitable, and nonsubstitutable (VRIN) includes both the tangible such as logistics and intangible such as the Google maps.

RV is an extension of RBV that explains the competitive advantage of strategic issues.

PBV deals with performance-based practices whether tangible or imitable.

Resources logistics within a company is one of the resources that the company must account for during strategic decisions.

VRIN are internal resources

The PBV uses practices performance.

Carter, Kosmol, and Kaufmann, (2017)

Lean and Green Approach

Lean and Green Approach are utilized by the companies to bring out efficiency, sustainability, and effectiveness during the competition with the other companies.

Intermodal transport

Lean systems

Green supply chains through the intermodal transport

Fast Moving Consumer Goods (FMCG) estimates the potential demand for the goods in the intermodal transportation.

Colicchia, Creazza, and Dallari (2017)

Third party logistics service providers (TPLSP)

TPLSP offers the outsourcing activities for the companies that need them so that they can concentrate on other activities.

Companies are using the TPLSP to outsource their activities so as to achieve the expected performance and coordination.

Decentralized supply chain

Giri and Sarker (2017)

Reverse logistics (RL)

Closed-loop supply chain (CLSC)

CLSC is a management strategy of control and operation of activities so as to achieve maximum value in the product life cycle.

RL, on the other hand, deals with moving products from which have already reached their destination to another purpose of creating value.

Supply chain management (SCM)

Recycling of the Waste Electrical and Electronic Equipment (WEEE).

Consumers of finished goods that later seek proper disposal.

Govindan, Soleimani, and Kannan (2015)

Green supply chain management (Green SCM)

The Green SCM seeks to add the green concept in the supply chain management so as to help solve environmental issues.

The barriers that hinder the Green SCM when it comes to procurement activities.

Manufacturing companies are seeking to implement Green SCM in their supply chain managements

Govindan et al. (2014)

Greening propensity (GP)

GP involves the involvement of customers in performing logistic activities that are likely to improve the environmental wellbeing.

Greening propensity

Greening capability shows what the consumers can do to achieve the needed achievements.

Service capability

Logistics service providers.

Procurement effectiveness

Barrier analysis

Lun et al. (2015)

Third party executives

Grounded Theory

Third party executives are supply chain entities that seek to facilitate the supply chain process by identifying the primary constructs and learning stages to allow inter-organizational learning.

Grounded theory shows the constructs and provides insights for the operation of the supply chain.

Supply chain efficiency through the third party executives

Inter-organizational Learning through the grounded theory.

Manuj, Omar, and Pohlen (2014)

Business models for LSP in a food chain

Business Model Canvas

The models are formulated to cover for the two service offerings that are required for food supply chain

There is a logical connection between business fundamentals and the services offered by the LSP.

Local food supply chain

Logistics service

Business models

Martikainen, Niemi, and Pekkanen (2014)

Online shopping service supply chain (OSSSC)

OSSSC are online supply chain management systems that seek to operate just like the other supply chains in different regions.

Service quality and performance of the OSSSC

Third party logistics

Single scenario online store

Making of centralized and decentralized control decisions.

Qin et al. (2016)

Non-cooperative multi-layer supply chain model

This model enables the LSP to decide on the activities to offer to a particular company.

The model is usually a four-framework which involves retailers, consumers, wholesalers, and logistics.

Non-cooperative multilayer supply chain model

Mathematical programming of the four layers of the model so that they can fit the necessity of optimal network design that provides for the needs of the stakeholders involved.

Santibanez-Gonzalez and Diabat (2016)

Logistics service providers (LSP)


LSP covers all the activities within an organization such as acquisition, conversion, and distribution of the raw materials in a group. Efficiency occurs when a company concentrates on the most important strategies while LSP takes care of operations.

Logistics activities

Cost efficiency

Supply chain

Shareholders and stakeholders.

Sheikh and Rana (2014)

4th Party Logistics (4PL) service providers

4PL supports individual firms of a globalized business in the industrial cluster by enabling collaborative operational capabilities that allow competitiveness.

4PL in the Globalization

The collaborative operational capabilities leads to Supply chain flexibility and Creativity and innovation ability

Subramanian et al. (2016)

Third- Party Logistics service providers (3PL)

3PL is another individual or firm that gets to perform duties for another company that outsources them.

Selection of the 3PL is mostly based on the economic aspect rather than the other factors

Triple bottom line (TBL) is used for the selection of the 3PL.

Thamsatitdej et al. (2016)

Logistics service provider (LSP) strategy

LSP strategy enables a company to create value by taking advantage of building manifold interdependencies that are profitable.

Distributive service where the LSP ensures that people get whatever services and product that they are looking for in a supply chain.

LSP are strategic entities that seek to facilitate the network of activities.

Wang, Persson, and Huemer (2016)


Aserkar, R., Kumthekar, N. and Inamdar, S., 2017. Training and development needs of logistics and supply chain professionals in South Asia. International Journal of Shipping and Transport Logistics, 9(1), pp.85-106.

Carter, C.R., Kosmol, T. and Kaufmann, L., 2017. Toward a Supply Chain Practice View. Journal of Supply Chain Management, 53(1), pp.114-122.

Colicchia, C., Creazza, A. and Dallari, F., 2017. Lean and green supply chain management through intermodal transport: insights from the fast moving consumer goods industry. Production Planning & Control, 28(4), pp.321-334.

Giri, B.C. and Sarker, B.R., 2017. Improving performance by coordinating a supply chain with third party logistics outsourcing under production disruption. Computers & Industrial Engineering, 103, pp.168-177.

Govindan, K., Soleimani, H., and Kannan, D., 2015. Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future. European Journal of Operational Research, 240(3), pp.603-626.

Govindan, K., Kaliyan, M., Kannan, D. and Haq, A.N., 2014. Barriers analysis for green supply chain management implementation in Indian industries using analytic hierarchy process. International Journal of Production Economics, 147, pp.555-568.

Lun, Y.V., Lai, K.H., Wong, C.W. and Cheng, T.C.E., 2015. Greening propensity and performance implications for logistics service providers. Transportation Research Part E: Logistics and Transportation Review, 74, pp.50-62.

Manuj, I., Omar, A. and Pohlen, T.L., 2014. Inter‐Organizational Learning in Supply Chains: A Focus on Logistics Service Providers and Their Customers. Journal of Business Logistics, 35(2), pp.103-120.

Martikainen, A., Niemi, P., and Pekkanen, P., 2014. Developing a service offering for a logistical service provider—Case of local food supply chain. International Journal of Production Economics, 157, pp.318-326.

Qin, X., Su, Q., Huang, S.H., Wiersma, U.J. and Liu, M., 2017. Service quality coordination contracts for online shopping service supply chain with competing for service providers: integrating fairness and individual rationality. Operational Research, pp.1-28.

Santibanez-Gonzalez, E.D., and Diabat, A., 2016. Modeling logistics service providers in a non-cooperative supply chain. Applied Mathematical Modelling, 40(13), pp.6340-6358.

Sheikh, Z. and Rana, S., 2014. The Role of Logistics Service Providers in Supply Chain Performance Management: A Comprehensive Literature Review. International Journal of Academic Research in Business and Social Sciences, 4(5), p.608.

Subramanian, N., Gunasekaran, A., Papadopoulos, A. and Nie, P., 2016. 4th party logistics service providers and industrial cluster competitiveness. Industrial Management & Data Systems, 116(7), pp.1303-1330.

Thamsatitdej, P., Samaranayake, P., Laosirihongthong, T. and McLean, M.W., 2016. Selection of third-party logistics service providers (3PL) under the sustainable supply chain management. In Proceedings of the 14th ANZAM Operations, Supply Chain and Services Management Symposium, Sydney, Australia, 13-15 June 2016.

Wang, X., Persson, G. and Huemer, L., 2016. Logistics service providers and value creation through collaboration: a case study. Long Range Planning, 49(1), pp.117-128.