“Logistic Outsourcing Process in SMEs” - Case Studies of Four Taiwanese SMEs

Abstract:

Background:

According to experts logistics outsourcing is a process and companies should develop their understanding about it as a process. Literature suggests a systematic and strategic approach for this process and also presents different models and aspects to improve logistics outsourcing as a process. But some scholars reveal a gap in literature regarding logistics outsourcing process in SMEs. They suggest in the discussion regarding logistics outsourcing as a process SMEs are totally ignored and there is a need to conduct research on this topic with perspective of SMEs. They also suggest the practices of SMEs in logistics outsourcing process are different from suggested process in literature.

Research Questions:

Q.1: According to the literature, how should companies develop and perform logistics outsourcing process?

Q.2: How does the logistics outsourcing process in SMEs differ from the process suggested in the literature?

Q.3: Why do the practices of SMEs regarding logistics outsourcing process differ from the process suggested in the literature?

Purpose of the Study:

The purpose of this study is to reduce the gap in literature regarding logistics outsourcing in SMEs by studying their logistics outsourcing process to identify and understand the differences in their practices as compare to suggested process in literature.

Methodology:

This thesis is written from a positivistic perspective with a deductive approach. For this thesis multiple-case studies are employed by using qualitative research method. For empirical data collection semi-structured interviews are used and pattern matching is used as analysis method.

Conclusion:

Taiwanese SMEs do not have very structured and systematic process for logistics outsourcing which is exactly opposite to the suggested process by literature.  These SMEs are also performing some suggested aspects of logistics outsourcing process but not as recommended in literature and these aspects are also not integrated as a process. According to our findings, lack of understanding about logistics outsourcing as a process, limitation of resources and lack of interest of top management are main reasons for these differences in the practices of SMEs regarding logistics outsourcing process from the suggested process in literature. We also find that the reviewed literature and suggested models of logistics outsourcing process are focusing on strategic partnership between 3PLs and companies but the partnership between SMEs and their logistics services providers is more tactical in nature. This is also a possible reason of this difference.