The PILOOR Model : a guideline to mutually improve logistics performance in cross-border shipper-TPL provider relationships

Abstract: Purpose: This master thesis attempts to propose a guideline for improving logistics performance in terms of cost efficiency and on-time delivery in shipper-TPL provider relationships within offshore outsourcing businesses. Methodology: As a first step, the authors construct a conceptual model based on a thorough literature review. In a second step, empirical data is collected through semi-structured interviews within a single-case study with dyadic perspectives examining the shipper-TPL provider relationship of Ericsson, Sweden and Aramex, Saudi Arabia. Lastly, the authors are able to develop a final detailed model through merging the discovered theoretical and empirical findings. Findings: The findings of this thesis highlight the impact on performance of the factors of communication, culture, work agreements, standardization, system compliance and trust. Based on these factors, the PILOOR Model is developed that illustrates a sequential order of these factors to improve performance. In detail, the findings suggest to start off with communication and culture in order to foster a mutual understanding. Afterwards, work agreements and standardization within processes and communication channels should be established. Thus, considerable efforts are required within the build-up stage of shipper-TPL provider relationships. Within the execution stage, system compliance is found to enhance performance, in which formal and informal communication tools support performance improvements. Finally, this research highlights that trust develops over time by successfully working on the other factors. In addition, it has an overall positive effect on performance once a sufficient level is achieved. Research Implications: This research is the first to propose a guideline for performance improvements within offshore outsourcing of TPL services through the presented PILOOR Model. Thus, this research fills a significant gap within the body of the TPL literature. Furthermore, the PILOOR Model is believed to support practitioners in successfully building-up and executing their offshore outsourcing shipper-TPL provider relationships. Limitations & Further Research: Due to the choice of methodology, this study is limited in terms of generalizability. Therefore, the authors suggest replicating this study within other offshore outsourcing shipper-TPL relationships. Ideally, the developed PILOOR Model should be tested empirically.