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Impact of relationship management on Third-Party Logistics Providers in collaborative relationship

Management Summary Nowadays, as the business processes become more specialized, organizations strive to focus on their core competencies. Consequently outsourcing the logistics activities become common and many companies leave these tasks to those who specialize in logistics activities, namely, Third party logistics provider ( !"s#. Typical service sourced to !"s which include transportation, inventory, order processing, purchasing, warehousing, materials handling, packaging, and so on, must continuously meet and satisfy the customer demand. This calls for a considerable effort and significant capital. The ob$ective of this study is% to introduce and describe collaborative logistics management and investigate its ability of relationship learning in collaborative know&how. This purpose necessitates a model of the process of relationship learning for !"s. 'esides, the potential benefits (in terms of operational measure of competitive success factors, namely quality, timeliness and customer service# in logistics collaboration are supported by literature. (espite the identified potential benefits, there are several relevant key factors, including trust, communication, adaption, commitment to learning as well as shared vision within the organization that positively influence the degree of relationship learning in collaborative relationship. Therefore, the relationship between relationship learning and logistics service effectiveness must be identified. )pecially, positive relationship should be reported to attain desired benefits of learning. This has been done through a literature review.

Table of Contents C*+!T,- . ... ..1 .. ..0 ..2 /ntroduction 0 2 2 2 2 2 5 5 5 9

..5

'ackground !roblem statement !urpose of the research 3 -esearch 4uestions .. .. !urpose of the research. .. .1 -esearch 4uestions -elevance -esearch (esign ..2.. Type of research ..2.1 6ethod of data collection ..2. 7alidity 3 -eliability 8verview of research Collaboration

C*+!T,- 1 1.. 1.1 1. 1.0 1.2

Third&party logistics providers ( !"s# +gency Theory Collaborative relationship Collaborative logistics Collaborative know&how "earning as a key component

: : ; ; .<

C*+!T,.. .1 . .0

Construct definitions The process of learning "earning outcome% collaborative know&how ,ffects of relevant factors on learning .1.. Communication .1.1 +daptation .1. Trust .1.0 Commitment to learning .1.2 )hared vision

.. .. .1 . .0 .0 .0 .2 .2

C*+!T,- 0 "inking learning to logistics service effectiveness

0.. 0.1 0. 0.0

"ogistics service effectiveness -elationship learning and logistics service effectiveness Types of logistics services "ogistics service effectiveness and firm performance

.5 .5 .9 .:

C*+!T,- 2 Conclusion and implications 2.. 2.1 Conclusion 6anagerial implications 1. .; 1<

-eference

CHAPT ! " Introduction "#" $ac%ground

The fierce competitive business environment, rapid changes in technology, increased customer demand as well as globalization of products and services have greatly impacted logistics and supply chain management. ,specially, integration of the supply chain has become an important way for industry to gain competitive advantage. *ighly competitive market environment calls for firms to be able to handle the dynamics of its entire supply chain. /n this conte=t, the third party logistics providers ( !"s# play an important role in supporting such a dynamic supply chain system, and their business is developing as a result of the increasing demand of advanced logistics services. The ways !"s manage the relationship to its customers and handle effects on their network of relationships fulfill the basic importance for their strategic development 'esides, the relationship between !" provider and its customers has changed over time from a focus on the contract to partnership and agreement in order to achieve a mutual beneficial and continuous relationship. >urther, changes take place within and between relationships, bonds and links involving actors, resources and activities pointed out that supply chains reply on collaborative efforts for varying types of resource e=changes to might enhance their competitiveness. 'owerso= (.;;5# also claimed that the overall performance will be improved by supply chain collaboration since it facilitates the cooperation of participating members along the supply chain. )uch growing trend toward collaborative relationship gives very good reason for why we should focus on logistics services developed by !" providers and their influence on collaboration. +lthough, certain studies have addressed how inter&organizational communication and collaborative relationship enhance e=change partners? performance but it is only described from buying firm?s perspective. +ll these factors leads to an increasing need to e=amine the role of collaborative logistics and what is the consequence that enhances the development of relationship learning among global supply chain partners since !" provider also plays a significant role in affecting the quality of )C relationship and the development of relationship learning. >urthermore, the fact that !"s are more likely to seek more than $ust economic value in an e=change relationship. *ence, it is important to e=plore collaborative relationship of !"s and to what e=tent relationship learning promote

performance of !"s. "#& Problem statement to understand the problem to the precisely, there is a need of comprehensive study within the area of collaboration is required. The role of collaborative logistics and its central attributes might contribute to relationship learning. 6ore importantly, in the long run, relationship learning is likely to foster products and services that provide more value and are superior in solving problems for their users. Thus, relationship learning is helping !"s gain better understanding about the value desired by the e=change partners, capturing knowledge&based resource. /n light of this, the design of this study aims to address the following question% What is the impact of relationship learning on logistics service effectiveness of Third-Party Logistics Providers in collaborative relationship? "#' Purpose of the research ( !esearch )uestions "#'#" Purpose of the research

/n the conte=t of international supply chain management, the study claimed to focus on the !"& outsourcer relationship. The purpose of the research is to describe the importance of relationship learning and what is the consequence that enhances the service effectiveness of !" and its performance. "#'#& !esearch )uestions

There are three questions tied to the understanding of the network development of relationship learning within the collaborative logistics of Third&!arty "ogistics !roviders.

.#% @hat is the role of Acollaborative logistics? in outsourcingB 1#% @hat are the key factors of logistics collaboration that influence the degree of relationship learningB #% To what e=tent relationship learning promotes logistics service effectiveness of Third&!arty "ogistics !rovidersB "#* !elevance The aim of this research is to e=plain the findings, providing a further insight of the significant of relationship learning of !"s in collaboration. +dditionally, the relationship between relationship learning and logistics service effectiveness is important as there is an increasing tendency toward outsourcing and globalization of different types of operations. "#+ !esearch ,esign "#+#" Type of research

The type of research in this research can be identified as descriptive. The main approach in the research is literature reviews, and qualitative research will be made continuously during the whole report. "#+#& Method of data collection

/n order to answer the research questions, literature review is used as a primary approach. The finding of this research are collected from published literature, such as books, academic $ournals (such as /nternational Cournal of !hysical (istribution and "ogistics 6anagement, )trategic 6anagement Cournal, )upply Chain 6anagement% +n /nternational Cournal etc.#. @e used some well&known databases to search related articles in the topic, such as )cience (irect, +'/D/nform Elobal (!ro 4uest interface#. -esearch on different terms in the area of Collaborative logistics, including AThird&party logistics providers ( !"s#?, ACollaborative relationship?, ACollaborative know&how?. Then logistics service effectiveness and performance will be discussed as well. /t might be necessary to address that the terms Arelationship

learning?, Ainter&organizational learning? would be used interchangeably in this study. "#+#' -alidity ( !eliability

+s it was mentioned above, the research carried out in this research can be characterized as descriptive. Therefore, internal validity is not of immediate interest in this research. 8nly e=ternal validity will be secured through the research questions being answered by academic literature reviews. )ince most of the literatures used for this study were published in the well known $ournals in area of the study, therefore an acceptable level of reliability could be verified. "#. /vervie0 of research 'elow an outline of the research will be described which clarifies a connection between the research questions and the following five chapters. This research consists of seven chapters which are summarized as follows% Chapter . describes the problem and the background of the research. The ob$ective of the research and the research questions are presented here. /t also presents the methodology for this study. 6ethods in general, and then the chosen research methodology is presented and motivated. + discussion about validity and reliability is found in this chapter. Chapter 1 presents certain definitions of the !"s collaboration concept (Acollaborative logistics? and Acollaborative know how?. "ikewise, relationship learning will also be considered in this chapter. The purpose is to acquaint the reader with the research fieldF some relevant fields and notions are discussed here. This chapter will cover research question ..

Chapter introduces the terms Arelationship learning. The main task of this chapter is to identify the main factors in relationship learning. The research question 1 will be answered. Chapter 0 presents an in further investigation in the linkage between relationship learning and logistics service effectiveness and performance of !"s. Therefore this chapter will consider research question , considering the important fact that the demand of relationship learning matching development of logistics service. Chapter 2 consists of a conclusion and 6anagerial implication. The discussions and conclusions would be summarized from the literature finding. /n fact in order to handle such !"&client relationship effectively and efficiently, a !" might need to deeply understand the importance of collaboration and why collaborative relationship is needed. &#' Collaborative relationship ,very successful supply chain strategy requires collaboration, which in turn demands the need for open communication, sharing of resources, risk and rewards ()oosay et al., 1<<:#. /n order to have an effective and resistant supply chain, all the entity should perform a least level of collaboration with other parties in the chain. Collaboration is recognized as a means by which all parties in the supply chain are actively working together towards a common set of goals that bring mutual benefits to partnership relationship (6in et al., 1<<2#. >urther, 'arratt (1<<0# argued that collaboration is mutual goal setting that goes beyond a normal written contract or partnership. /n fact, there are numerous studies which have already confirmed that collaboration between companies participating in supply chain setups could increase efficiency and decrease costs (Eadman, 1<<0F )tefansson, 1<<2F "angley, 1<<<F *arrison et

al., 1<<:F "ynch, 1<<.F 6entaer et al., 1<<<#. (ue to this, collaboration in logistics area is seen to more logical and reasonable. &#* Collaborative logistics 'ased on "ynch (1<<.#, collaborative logistics is driven by a changing corporate vision that views competition and suppliers as potential collaborative partners in logistics. >urthermore, "ogistics collaboration is a result of a logistics outsourcing decisions and collaboration occurs when companies work together for mutual benefit ("angley, 1<<<#. +ccording to Czaplewski and )oin (1<<1#, collaborative logistics is defined as mutually beneficial cooperative problem solving and opportunity e=ploitation beyond traditional, predefined trading partners, to encourage new different and innovative ways to solve business problems and capture new business. To do this companies involved should share information, knowledge, risk or profits. )haring entails understanding how other companies operate and make decisions, and goes much deeper than cooperation ('arratt, 1<<0#. /n addition to this, 7argo and "usch (1<<0# also suggested that collaboration often demonstrates in the form of knowledge sharing. )uch knowledge can be classified as two main categories% .# e=plicit knowledge or informationF 1# tacit knowledge or know&how (Gogut 3 Hander, .;;1#. +ctually, compared to information, know&how is more likely to result in advantages that are more sustainable (Nonaka, .;;0#. This collaborative know& how in turn allows firms to achieve greater benefits from collaborations ()enge, .;;<F )tata, .;:;# &#+ Collaborative %no0-ho0 Collaborative know&how indicate that firms do learn from collaborations by developing

skills in identifying potential collaborators, negotiating the form and specifics of collaborative agreements, managing and monitoring the arrangements, knowing when to terminate them, and transferring knowledge ()imonin,.;;9#. >ollowing the literature suggestion, it is useful to understand collaborative know&how along the following four fundamental phases%.# /dentifying and selecting potential collaborators (Eeringer,.;;.#F (1# Negotiating the terms and structure of a collaborative agreement ("orange 3 -oos, .;;<#F ( # 6onitoring and managing an ongoing collaboration (Eanitsky 3 @atzke, .;;<F *ladik, .;:2#F (0# Terminating collaboration ()erapio 3 Cascio, .;;5#. Eenerally, the development of both skills and knowledge in a corporation has clear, positive effects on performance (Nass, .;;0#. 6iller and )hamsie (.;;5# addressed that the knowledge&based resources often take the form of particular skills (know&how#, including collaborative ones that help e=perts work and learn together effectively. "ikewise, !rahalad and *amel (.;;<# recognized firm?s competency in managing inter&firm collaborations as an important determinant in firm?s ability to access and internalize new strategic assets from its alliance partners. >urthermore, firms with greater collaborative know&how are more likely to develop trust and reputation through repeated ties with other firms (Eulati,.;;2#. +ll these further stress a good reason for !"s to move into the category of relationship learning, understanding its effects on collaborative relationship.

CHAPT ! ' Learning as a %ey component '#" Construct definitions +s !"s e=panding, there has been some demands for the global strategic ob$ectives of innovation, learning, and adaptation (Ehoshal,.;:9#. + number of researches have already addressed the importance of e=amining relationship learning as an influence of behavior change and performance improvement (*ult, >errell, 3 *urley, 1<<1F *ult, *urley et al.,1<<<F *ult, Nichols et al.,1<<<F )later 3 Narver, .;;2#. That is because relationship learning has the ability to influence 'ehavior (*uber, .;;.# and will enhance the capacity of understanding ((amanpour, .;;.#, cross&functional coordination (+iken 3 *age, .;9.#, creativity and, problem solving ()enge, .;;<#. >urther, some hold that behavioral change is required for learning (>iol 3 "yles, .;:2#F others insist that new ways of thinking are enough (*uber, .;;.#. /n spite of the above mentioned reasons, relationship learning is recognized as an important strategy for a firm achieving its competitive advantage ('aker 3 )inkula,.;;;F *ult, *urley et al.,1<<<F *ult, Nichols et al.,1<<<#. *owever, globalization has shifted comparative advantage from the traditional inputs of product (such as land, labor, and capital# to knowledge (+udretsch, 1<< #. +s

a result of this, the ability of a firm to recognize a partner?s capabilities and to take into account employee know&how, reputation and firm culture became another key issue in supply chain relationship (-obert et al., 1<<1#. Ne=t, learning seems to be a function of the interaction among channel partners ("ukas, *ult, 3 >errell,.;;5#. +s such, relationship learning in this paper might be conceptualized as a collaborative activity between a !" and its client in which the two parties share information, which is then mutually interpreted and integrated into a shared relationship memory that changes the range or likelihood of potential behavior ()elnes 3 )allis, 1<< #. /t is a process to improve future behavior in a collaborative relationship in which !" and the outsourcer strive to create more value together than they would create individually, and how this e=tends the understanding of such collaborative relationship and inter&firm activities (Cheung et al., 1<.<#. This includes obtaining and sharing information about customer needs, market changes and the outsourcer?s competitors actions (*urley 3 *ult,.;;:F 6oorman 3 6iner, .;;:#.

'#& The process of learning The above definition of relationship learning suggests that learning is affected by the capacity of a partner, namely absorptive capacity (-obert et al., 1<<1#. This character relates to willingness and ability to absorb knowledge from partners, including the /dentification of information needs, the acquisition of collaborative know&how and how it is translated ()imonin,.;;9#. +nother characterizes relationship learning as the process through which individual knowledge is transferred to the organization so thaH it can be used by individuals (e.g. the manager of a !" firm# ()inkula,.;;0#.

6anagers who want to enhance relationship learning needs to understand the content of know&how in collaborative relationship that can efficiently engage in market information& processing activities ()later 3 Narver, .;;2#. Therefore, relationship learning seems to be an internal process that encourages collaborative know& how in order for logistic service effectiveness to perform as well as possible ()ee >ig..#.

The relationships modeled within the process displayed in >igure 1 depict that relationship learning within the !"?s firm relates directly to the content of collaborative know&how in the !"Iclient e=change that will have a positive impact on the !"?s ability to deliver the logistics service effectively and as a consequence firm performance of a !" (!anayides, 1<<9F Nass, .;00#. .0.. Communication Communications is an essential part of information transfer. )uccessful )C6 has been linked to communications frequency -obert et al., 1<<1#. Communication refers to the formal and informal sharing of meaningful and timely information between firms (+nderson 3 Narus,.;;<F >ynes et al.,1<<2#. There are three important aspects of communication behavior that are critical to collaboration relationship (6ohr and )pekman,.;;0#. They are the quality of the communication, the form of information

sharing and participation. These elements are all key predictors of successful supply chain relationships (6ohr 3 )pekman, .;;0F >ynes et al., 1<<2#. Therefore, effective communication is essential for !" to achieve successful collaboration. .0.1 +daptation +daptation often occurs when investing in transaction speciJc assets such as product, process technology or human resources (*akansson,.;:1#. )uch investments like innovation push firms to the e=change relationship, motivating relationship learning in order to improve the return on investments (Cheung et al., 1<.<#. +ccordingly, the more change in the technology of services and operations offered by !", the more change in knowledge and skills of them will be required to successfully capture the potential benefits (,ttile, 1<<5#. Concerning what is mentioned above !"s are specialists in the operation of logistics. They often have valuable knowledge of logistics and fulfillment processes that influence outsourcer?s performance. Try the new ways of performing the $ob Aproduct or service? with innovative solutions makes them necessary to focus on the continuous process of technology development (,ttile, 1<<5F )oosay et al., 1<<:#. >urthermore, since the importance of -3( cannot be ignored today, the presence of advanced technology and its contribution are not only close to !". The outsourcer may contribute to !"?s innovation and thus absorbing some of -3( cost ("evi et al., 1<< F ,ttile, 1<<5#. >or e=ample, (*" is serving the computer transportation of *! for a large part of ,urope. ,(), an *! company set up a data warehouse to provide management with powerful data analysis, introducing the 'usiness +rea -eview ('+-# program to support the service outsourced to (*" (*ertz 3 +lfredsson,

1<< #, the goal of which is to reducing costs, streamlining operations and improving the transportation. .0. Trust Trust can be seen as the most frequently cited dimensions of )upply chain relationships in the literature and has been deJned as the Jrm?s belief in the reliability and integrity of the other party, and the ability to predict the actions of the other party in the relationship and (Cheung et al., 1<.<F +nderson 3 Narus,.;;<F Hahher et al., .;;:#. /n addition, trust is related to networks, and is associated with the strength of a relationship ('urt 3 Gnez ,.;;2#. There are different types of trust% contractual trust (e=pectation that promises is kept#, competence trust (conJdence in a trading partner?s competence to carry out a speciJc task# and good will trust (the sure feeling that trading partners possess a moral commitment to maintaining a trading relationship (>ynes et al., 1<<2F +nderson 3 Narus,.;;<#. +ccording to )ako (.;;1#, it is good will trust which is a key to a true partnership form of relationship like collaborative relationship of !"s. '#*#* Commitment to learning -elated to trust is the notion of commitment. This factor is related to the value influences whether an organization is likely to promote a learning culture, and to place value on learning (Norman, .;:2F )ackmann, .;;.#. /t is confirm that there is a positive correlation between commitment and relationship success according to 6ohr and )pekman (.;;0#. @hen !"s are willing to devote resources to ensure longer&term interaction, a higher probability of success collaborative relationship ensues (-obert et al., 1<<1#. '#*#+ Shared vision )hared vision is different from commitment to learning that it influences the

direction of learning & a focus for learning that fosters commitment and purpose among organizational members ((ay, .;;0#, whereas commitment to learning influences the intensity of learning (>ynes et al., 1<<2#. /n many organizations, without a shared vision, employees or managers are less motivation to learn, and less likely to know what organizational e=pectations e=ist, what outcomes to measure, or what theories in use are in operation (6cGee .;;1F Norman, .;:2F )enge,.;;<#. @ithin a !" firm, even if one is motivated to learn, it is difficult to know what to learn because of the ambiguous environment and uncertainty of relationship between the firm and outsourcer ((ay,.;;.F Tobin, .;; #. o summarize our discussion, we contend that relevant factors of learning suchas trust, adaptation, communication, commitment to learning as well as shared vision and reinforce each other in terms of enhanced relationship learning. +ccording to the finding, the empirical studie by 6ohr and )pekman(.;;0#, 6onczka et al.(.;;2#, )ako (.;;1# and ,llram and Grause (.;;0# also support our argument that in relationship learning of !" in collaborative relationship is a dynamic process that covers these factors. 6anagers of !"s seeking to increase the degree of relationship learning not only need to know how to develop efficient market information& processing activities, but they must also understand how to foster an organizational environment that will breed the desire to use this knowledge ()later 3 Narver,.;;2#. '#' Learning outcome1 collaborative %no0-ho0 the concept of collaborative know&how that measures the e=tent to which firms have skill in identifying, negotiating, managing, monitoring, and terminating collaborations, which is a key asset in shaping performance (Nass, .;00F !ennings et al.,.;;0#. /n the conte=t of logistics collaboration, such know&how that determines how effectively new collaborations are entered and managed ()imonin, .;;9#. There are four main categories %

(.# Identifying and (Eeringer,.;;.#.

selecting

potential

collaborators

(or

outsourcers)

This area calls for the ability to determine which outsourcer can offer mostly necessitates co&utilization of knowledge&based resources, to understand the risks and benefits of choosing one firm over another, as well as to evaluate the likely responses of involved outsourcers. The specific partner chosen can influence the availability of skills and resources in short term or long term according to Eeringer (.;;.# and )imonin (.;;9#. (1# Negotiating the terms and structure of a collaborative agreement ("orange 3 -oos, .;;<#. )uccess in this area of a !" requires the ability to evaluate different collaborative forms on the basic of contract, and to better understand its own position in collaborative relationship. "ike many other kind of relationship, collaboration between a !" and the outsourcer starts with contract (*ertz 3 +lfredsson, 1<< F 'ask, 1<<.#. @ithout a properly described contract, it may arise as a result of failure to reach a collaborative relationship. ( # Monitoring and managing an ongoing collaboration (Eanitsky 3 @atzke, .;;<F *ladik, .;:2#. (oing this calls for a variety of different skills directing, evaluating, and enforcing the actions of the outsourcers (6inkler, .;; #, including trust building, resolving conflicts, transferring knowledge&based resources, renegotiating agreements as well as staffing and training. *owever, those activities that require more advance communication mean (such as ,(/ or internet base program#, which are very costly in most case ()imonin,.;;9F !anayides, 1<<9#. (4) Terminating a collaboration ()erapio 3 Cascio, .;;5#.

>or many organizations, knowing when and how to e=it can be critical to achieving its strategic ob$ectives. /f they do not learn how or when to e=it, they may fall into competency traps ("evitt 3 6arch, .;::#. /n fact, a !" is different from this perspective. +ccording to the agency theory, being an intermediary between buyer and sellers makes !" necessary to depend on the service outsourced. The important issue is about the bargaining power of !". /n general, the outsourcers like many multinational enterprises (6N,s# are often dominant in most negotiations since they are better informed, having greater access to wider choice of services (Cheung et al., 1<.<F 'olumole, 1<< #.

CHAPT ! * Lin%ing learning to logistics service effectiveness

*#" Logistics service effectiveness "ogistics service effectiveness for a !" is defined as the e=tent to which the goals of the !" in delivering the logistics service are accomplished (!anayides, 1<<9F 6entzer et al., 1<<.#. The goals of a !" includes on&time delivery, timely response to requests, accurate information storage and delivery, ability to solve problems, fulfillment of promises and assisting the outsourcer in accomplishing their own ob$ectives ('ienstock et al.,.;;9F 6entzer et al., 1<<.F 6entzer et al.,.;:;#. (elivering the logistics service effectively will also have an influence on the performance of an organization. This is because a !" keeping its clients satisfied with its ability to solve problems, keeping accurate records, delivering services on time as well as communicating effectively can increase customer satisfaction ("euthesser 3 Gohli, .;;2#. The items related to effectiveness include accuracy in information e=change, promptness and timeliness, responsiveness to problems and problem&solving ability (6entzer et al.,1<<.F !anayides, 1<<9#. *#& !elationship learning and logistics service effectiveness +ccording to *ertz and +lfredsson (1<< #, there is a natural tendency on behalf of !"s to increase the degree of collaboration. + closer working relationship will improve customer responsiveness (6artin 3 Erbac, 1<< # and contribute towards the reduction of transaction costs ((yer, .;;9#. /n this view, applying the relationship learning for a !" will have a positive impact on relationship development in the !" I client e=change that will improve effectiveness in the delivery of the logistics service (!anayides, 1<<9#. )pecifically, !"s can do that effectively through collaboration with the outsourcers, learning their business practices, introducing innovations, and in turn improving the performance of the supply chain (!anayides 3 )o, 1<<2#. @e also found that relationships are important in marketing channels as they

may contribute to performance improvements (Cap et al.,.;;;#. >urther, performance improvement stands at the heart of supplier development programs (Grause et al., 1<<<# and thus effectiveness is the e=tent to which goals are achieved (!anayides 3 )o, 1<<2#. /f parties in a supply chain work together in a collaborative relationship with a willingness to share and receive information or knowledge, efficiency and effectiveness might be accomplished (*ult 3 Nichols, .;;5F 6entzer et al., 1<<<F 6entzer et al., 1<<.#. )ince the degree of relationship learning was found to influence firm innovativeness, particularly in terms of adopting innovative technologies and processes (Calantone et al.,1<<1#, learning behavior of !"s and the effects of relationship learning on organizational capabilities are essential for effective information systems development as stated by Celuch, Gasouf, and !eruvemba (1<<1# . *#' Types of logistics services Numerous of studies have investigated the contents of logistics services and how !"s operate ('agchi 3 7irum, .;;:F 'erglund, .;;9F Christopher, .;;:F "ieb 3 -andall (.;;5#. Typical services outsourced to !"s are transport, warehousing, inventory, value&added services, information service and design, and reengineering of the chain (*ertz 3 +lfredsson, 1<< #. These service developed by !"s depend on how they balance the degree of adaptation to customer with their general problem&solving ability (*ertz,.;; F *ertz 3 +lfredsson, 1<< #. Thereby, the need for the understanding of the different types of !"s would be necessary.

Fig.2 !"s classified on the basis of problem solving general ability and customer adaptation ability (source# adapted from $ert% & 'lfredsson( 2)) )

a# The standard TPL provider ('lock in figure# is the most basic form of a T!" provider. /t performs the most basic functions of logistics (such as picking, packing and distribution#F b# The !" as a service developer ('lock .# is seen as offering advanced value&added services (such as tracking 3 tracing, cross docking, or specific packaging#F c# The customer adapter ('lock 0# can be described as the !" firm taking over clients? e=isting logistics activities. /t aspires to improve these activities, without making much development of servicesF d# The customer developer ('lock 1# can be seen as the most advanced !" provider since it integrates itself with its customer and takes over its entire logistics function on the basic of enhanced knowledge, and it involves a high collaboration with the outsourcer. These providers will have few customers, but will work e=tensively with them.

To develop more advanced activities and services seems to be used a way to increase customer adaption for !"s and also to create the specific knowledgeneeded. /t seems natural to assume that relationship learning will lead to a greater commitment towards the development to inter&firm relationships (Cohnson 3 )ohi, 1<< #. 'y applying relationship learning, the development of !"s would seem to develop towards a customer developer in order to keep a high quality in their logistics services (+lfredsson 3 *ertz, 1<<.F *ertz 3 +lfredsson, 1<< #. *#* Logistics service effectiveness and firm performance +s stated by Choi and *artley (.;;5# effective supply chains contribute directly or indirectly to an increase in various performance measures. This is because learning will generate positive outcomes for the firm in the form of improved performance (efficiency and effectiveness# (Cohnson 3 )ohi, 1<< #. +nother reason is adopting a higher degree of relationship learning gives a high yield of stronger order fulfillment, stronger service, stronger upper management competencies and e=ternal partnering capabilities (!anayides 3 )o, 1<<2F !anayides, 1<<9#. >ollowing this, it seems that the delivery of the logistics service effectively entails improvements across the supply chain. 'y increasing efficiency in handling, knowledge in how to manage the collaborative relationship through learning of a !" is developed gradually. >inally, customer satisfaction will be linked to improvements in a firm?s economic returns, for instance market share or profitability (+nderson et al., .;;0F Crosby et al., .;;<#. The question is, however, how we should identify the measurement of !"s performance. /t was suggested that performance measures can be classified either as financial or operational (7enkatraman 3 -amanu$am,.;:5#. +nd operational measures included key competitive success factors (such as quality, delivery,

service, fle=ibility# and internal indicators (such as defects, schedule realization# (!anayides 3 )o, 1<<2F !anayides, 1<<9#. 'ack to the )ection 0.., in the current study !"s? effectiveness is regarded as an operational measure of competitive success factors, namely quality, timeliness and customer service. )ince studies have confirmed the linkages between channel relationship management and firm performance ('ello 3 Eilliland,.;;9F Cavusgil 3 Hou,.;;0#, the findings come to support our previous discussion stating that logistics service effectiveness corresponds to the measurement of operational performance that ultimately drives !" firm?s performance.

CHAPT ! + Conclusion and implications

+#" Conclusion This research responds to the call for research on certain supply chain issues in relationship learning. The findings of this study indicate that !"s do learn from collaborative relationship by developing skill in identifying potential collaborators, negotiating the form and specifics of collaborative agreements, managing and monitoring the arrangements, knowing when to terminate them, and transferring knowledge. This collaborative know&how in turn allows firms to achieve effectiveness and improved performance from collaboration. The key to build effective collaboration /nvolves certain key factors, including trust, communication, adaption, shared vision within the firm as well as commitment to learning. The level of each directly influences the degree of learning. Gnowledge&based information is regarded as valuable resource, such as promotional plans, historical shipping data, as well as real time load data, firms can significantly enhance collaboration in terms of logistics activities and therefore contribute to more efficient collaborative logistics management. +lthough, in some cases, !"s are willing to learn but the outsourcer is not, which might be due to the uncertainty of collaborative agreement. The reason why collaborative relationship does not push the outsourcer to invest more in relationship learning still needs to be investigated by a further study. 'y modeling the process of relationship learning, we found that the importance of learning in !"&client relationship. The finding are supporting the relationship between collaboration and know&how, addressing the positive influence of relationship learning in developing logistics service effectiveness. !ositive relationships are reported, which suggest that logistics service effectiveness is an outcome of relationship learning. /t is also found that logistics service effectiveness of !"s is an operational measure of competitive success factors,

>urthermore, the discussion given about the importance of factors of collaborative logistics also implied that in order to take the advantages of collaborative logistics management and achieving positive gains in efficiency and cost reduction across the entire supply chain. The following approaches are needed% & real time customer&based information (via relationship learning# & real time supplier&based information (via relationship learning# & focused investment in web&enabled technology (by adaption, mainly innovation# >inally, the description of logistics collaboration given in this paper proves that !"s involved in collaboration are performing on operational level. )ince we defined collaborative logistics as a part of supply chain, relationship learning is also understood to be matched for the logistics system. /t seemed that the most important reason for companies to enter a mutual beneficial partnership like collaboration is to find the way to manage the relationships through the relationship learning. *owever, this study presents an overall understanding based on the literatures study presents the results will not be applicable for all players in the logistics and supply chain because the ob$ective of this paper was to provide a strategic perspective for third&party logistics providers to have a deepening understanding of relationship learning in collaborative logistics. +#& Managerial implications The findings of this study are important for !"s as the sector is facing with increasing competitive pressure in business market. )trong and enduring relationship between !" and the outsourcer can play a critical role in forming its competitive position. That is because they, by adopting high lever of relationship learning, can immediately response to the change of the outsourced service, and can operate more effectively. The key managerial implication of this study is that managers of !"s should not only focus on operation capabilities, but also concentrate the development of collaborative

relationship and the capabilities of learning. >rom a management perspective, mutual trust and commitment are central to a more enlightened approach to managing supply chain relationships. This requires frequent communication and collaboration on issues or tasks such as product and process design, quality and scheduling, all of which is evidenced by increased adaptation on the part of !"s and clients. )pecifically, the form of personal visit, telephone or e&mail communication with clients should be encouraged. >ully utilizing formal or informal meeting within organization in order to discover the improvement area and introduce the advanced technology that enhance performance and efficient information or knowledge e=change.

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