Outsourcing strategies in the security sector Online publication date: Mon, 20-Nov-2017
by Jouni Juntunen; Mari Juntunen; Vesa Autere; Pekka Kess
International Journal of Logistics Economics and Globalisation (IJLEG), Vol. 6, No. 4, 2017
Abstract: The purpose of this paper is to examine how security-related outsourcing strategies and the negotiating power of the public sector, the military and the relevant logistics service providers influence indirect logistics costs. Survey data was gathered from 149 respondents and the model was tested using structural equation modelling. The findings indicate that negotiating power and logistics strategy do not correlate. However, together they do affect direct costs and perceived service quality to reduce indirect logistics costs. Furthermore, it seems that service quality may have a strong mediating role in the relationship between negotiation power and indirect costs. Hence, the buyers of logistics services could learn from the public sector and the military on how to use negotiating power and strategy to obtain better service and short-term cost reductions and potentially improve the service performance of their supply chain. The paper will therefore be of value to both practitioners and scholars.
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