The Information Technology Capability of Third‐party Logistics Providers: A Resource‐based View and Empirical Evidence From China

Abstract

Third‐party logistics (3PL) providers have become important players in global supply chain management as increasing numbers of firms are outsourcing their logistics activities. However, the role of the information technology (IT) capability of these 3PL providers has not drawn much research attention. The way in which 3PL providers develop IT capability and how IT capability affects their competitive advantage deserve further investigation. This study has developed and tested a research model to address these issues. By integrating the concept of technology orientation from the strategic orientation literature into the resource‐based theory, we investigate both the antecedents and the consequences of IT capability among 3PL providers. The model was tested using survey data collected from 105 3PL firms in China. The results show that technology orientation has a significant impact on resource commitment to IT and managerial involvement in developing IT capability of 3PL firms. It also indicates that IT capability significantly affects three important dimensions of the competitive advantage of these firms, namely, reducing costs, providing innovative and customized services, and improving service quality. This study is one of the first to adopt the resource‐based perspective to investigate IT capability issues in the 3PL industry. It provides valuable insights for 3PL managers, and emphasizes the importance of technology orientation in the development of strong IT capability among 3PL firms.

A survey based analysis of IT adoption and 3PLs' performance

“…One exception is a recent paper by Lin and Ho (2009), where the authors find a positive correlation between the willingness to adopt RFID technologies and supply chain performance. Previous survey-based studies focused on 3PLs' capabilities and performance (Lai et al, 2006;Lai et al, 2008) do not allow a direct comparison with this research since their IT variables have been measured in a much more generic way (e.g.…”

“…Evangelista and Sweeney (2006) also identify information technologies as an enabler for developing logistics capabilities that 3PLs can directly offer to the market via the provision of value added services. Moreover, Lai et al (2006) and Lai et al (2008) found a positive correlation between the IT capability of 3PLs and the provision of innovative and customised services.…”

“…These results are consistent with several studies, suggesting a strong relationship between the development of services and 3PLs performance (Daugherty et al, 1992;Hertz and Alfredsson, 2003;Ashenbaum et al, 2005). The service dimension has also been considered in recent studies linking IT adoption to 3PLs performance (Lai et al, 2006;Lai et al, 2008).…”

“…For instance, Lai et al (2006) and Lai et al (2008) proposed different dimensions of IT importance, such as IT valence, IT orientation, and IT commitment. Recent studies propose to measure the degree of IT adoption on the basis of the number of technologies adopted (Jin, 2006) or the intensity of use of different technologies (Li et al 2009).…”

Information Technology, Logistics Performance and Moderating Effect of Firm Size: Empirical Evidence From East Coast Region of Malaysia

“…To overcome this issue, many studies have shown that the implementation of IT is significantly positively associated with firm performance; both in terms of logistics efficiency and effectiveness in delivering the services (Evangelista et al, 2012;F. Lai, Li, Wang, & Zhao, 2008;Langley et al, 2007;Qiang Wang & Zhao, 2008).…”