What Drives the Choice of Third Party Logistics Provider?
40 Pages Posted: 5 Oct 2008
Date Written: October 2, 2008
The service value proposition plays a key role in defining the most appropriate mix of components in service operations management. However, service companies often find it difficult to obtain a good understanding of how customers differentially value the service components that are offered by different providers. In this paper we identify the factors that are important to the choice of a logistics service provider. We use a stated choice experiment to explore the relative importance of seven service attributes based on a sample of 309 individuals across a range of industries and countries who have a role in purchasing logistics services. The results show that three distinct types of behavior populate our data and the preferences for price, delivery performance, service recovery, relationships, capacity, innovation and professional knowledge varies greatly between these customer groups. The practical importance of this insight is that we provide a logical starting point from which managers can begin to reverse engineer their service operations.
Keywords: Third party logistics, Service elements, Choice modelling, Survey research
Suggested Citation: Suggested Citation