Title: Strategic outsourcing objectives drive 3PL selection criteria in India

Authors: Vijayakumar Samgam; Himanshu K. Shee

Addresses: Victoria University, P.O. Box 14428, Melbourne, Victoria 8001, Australia ' Victoria University, P.O. Box 14428, Melbourne, Victoria 8001, Australia

Abstract: This paper examines the extent to which supply chain outsourcing objectives determine the selection criteria for 3PL service providers. While the 3PL selection criteria are researched earlier, there is little understanding how they are influenced by the strategic objectives of an organisation. Using a cross-sectional survey of 297 logistics and supply chain professionals from across industries in India, structural equation modelling (SEM) analysis reveals that strategic outsourcing objectives are the likely predictor of the 3PL selection criteria. The respondents perceived higher customer satisfaction, reduction of ICT legacy systems, capital investment avoidance and access to state-of-the-art technology that influence the decision on selection of 3PL service provider. The findings provide shipper managers an insight on how to purposefully assess the selection criteria ensuring their alignment with strategic objectives of outsourcing.

Keywords: 3PL selection criteria; third-party logistics providers; strategic outsourcing objectives; India; supply chain outsourcing; supply chain management; SCM; structural equation modelling; SEM; customer satisfaction; ICT legacy systems; capital investment; technology access.

DOI: 10.1504/IJLSM.2017.083220

International Journal of Logistics Systems and Management, 2017 Vol.27 No.1, pp.20 - 39

Received: 25 Sep 2015
Accepted: 04 Mar 2016
Published online: 22 Mar 2017 *

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