Changing to third party logistics

University dissertation from Ekonomiska institutionen

Abstract: Third party logistics (TPL), the procurement of an integrated set of logistics services in a long-term relationship between a shipper (goods owner) and a service provider, is today a viable option for how companies carry out their logistics activities. Very little has been written on implementation or change issues in a TPL setting; these issues are identified as important, but not elaborated. There is however reason to believe that implementation of TPL arrangements, or rather establishment thereof, involves a complex change process involving substantial change for a wide range of actors in both the shipper’s and the provider’s organisation.When comparing literature that deals with the TPL establishment process with a stream of research that is concerned with logistics change, it comes to light that there is a discrepancy between the theoretical and methodological foundations of the former works, and what is written in these pieces regarding the process. It is concluded that recommendations for how to manage the establishment process are given without being founded in a theory of process, or research designs capable of studying process. The theoretical underpinnings of TPL literature are founded in a view of change as a matter of conducting rational analysis and conceiving the strategically wisest decisions for the logistics system as a whole. Implementation is viewed as an unproblematic exercise of issuing directives to affected actors, asserting that all actors are rational, therefore rationally conceived decisions will be accepted and implemented accordingly.Therefore the overarching purpose of this research is:To explore the change process of third party logistics establishmentTo fulfil this purpose the two streams of research mentioned above are combined. A meta-model of process consisting of the three interrelated dimensions content, context, and process forms the starting point for the study of process, but this is not sufficient for a study of change; a theory of change which is capable of capturing the mechanisms of the change process as it unfolds is also needed. Therefore the theory of change of the second stream of research mentioned above is adopted.The theory of change encompasses three models of change, which are archetypical representations of the mechanisms underlying change processes according to different assumptions of what change is and how change comes about. These models are denoted the linear, the processual, and the circular. One important aspect of this theory of change is that the approach to change should be aligned with the extent oflearning requirements on the actors who are affected by or involved in the change. An actors perspective is therefore called for, and adopted in this thesis.This thesis is the first step of a wider research effort concerned with studying the process of establishing TPL. Therefore, of the three dimensions of change, the contentdimension is excluded from study in this thesis. Governed by the meta-model of process, two research objectives are formulated:To explore the context within which the TPL establishment process unfolds and describe the contextual dependence of this process&To describe the change process of TPL establishment in terms of the linear, processual, and circular models of changeThe empirical investigation applied is a single-case retrospective study, in which the case is the establishment process between a Swedish company and an international TPL service provider. A total of fifteen actors have been interviewed; ten on the shipper side of the dyad, five on the provider side. Although the TPL establishment process is an interorganisational process, this thesis focuses on the intraorganisational process of the shipper, why the empirical material from the other side of the dyad is not used in this thesis, The interorganisational aspect, as well as the intraorganisational side within the provider’s organisation are nevertheless important, and will be included in future research.The interviews were carried out in an unstructured manner, in which the interviewees were asked to retell the story from their own perspectives. Actors from varying positions, who were involved in the process, are included in the study; in the total sample all groups who were most affected or involved are represented. The interviews rendered ten stories of the studied process.These stories were then analysed by means of a pattern-matching logic, in order to seek out the important contextual dependencies of the process, and to explore the mechanisms of the change process, as it evolved in context.After having conducted this first step of the ongoing research effort, four main conclusions can be drawn:- The TPL establishment process is context dependent.- Not only rational mechanisms are at play in the process.- It is important to acknowledge actors, not only systems.- It is important to acknowledge the process, not only the decision.