Question #1
In the article written by Anderson, Coltman, Devinney & Keating (2011) there are ten factors that account
for 75% of variation in 3PL choice decisions in the minds of customers. Identify these factors and then
explain and rank them from the most important to least important. Make sure you justify your answer with
external research.
Answer
Question #2
Read the entire article and then describe the type of firm that is comfortable with having more than one
supplier and would chose them based on price and service.
Ten attributes account for 75% of the disparity in 3PL choice decisions in
customer minds. These attributes are essential in selecting and logistics providers for different
customers. Besides, these factors are characterizing core and peripheral attributes which are
underlying to the demand of the 3PL model. Anderson, Coltman, Devinney & Keating (2011)
used the utility-theoretic DCA model to scale down to the ten attributes that accounted for over
75% in explaining the variation in customer decision-making process. Therefore, the 10
attributes that were most relevant to the 3PL choice decisions in the customer minds are “reliable
performance, delivery speed, customer interaction, track and trace, service recovery, supply
chain flexibility, professionalism, proactive innovation, supply chain capacity and relationship
orientation (Anderson, Coltman, Devinney & Keating, 2011).”
The main reason for using these ten attributes is because out of the 21 identified
attributes of logistics, they account for over 75% of the disparity in 3PL choice decisions in
customer minds. Besides, the ten attributes were useful in guiding the aim of achieving a
complete utility-based assessment toeffectively explain and understand personal behavior
effectively. The ten attributes were flexible in and gave the opportunity to the authors to combine
related attributes. Despite the identification of the ten attribute, the combination identified 7 to be
more significant to the 3PL model for transportation and logistics service provides. The reasons
for using these attributes was to primarily enhance joint associations between customer and
supplier on a trust basis and focused on efficiency and serving cost as well as assist in finding
solutions to unpredictable situations.
According to research by Anderson, Coltman, Devinney & Keating (2011), I
would rank these ten attributes as follows:
1) Reliable performance
2) Delivery speed
3) Customer interaction
4) Service recovery
5) Supply chain capacity
6) Proactive innovation
7) Professionalism
8) Track and trace
9) Supply chain flexibility, and
10) Relationship orientation.
The reason for ranking these attributes is because they effectively selected and
ensure that the flow of information 3PL is efficient and enables both supplier and customer to
make firm and appropriate decisions in the line of logistics. Reliance performance comes first
because it enables the ability to measure delivery in full, timely and free from errors. Delivery
speed and price enhances decision making concerning the price and duration of delivery in
selecting a logistics provider. Customer interaction is third because it allows the ease of
conducting business with a service provider and enhances customer loyalty through the building
of a relationship. Capacity enhances the ability to meet unanticipated customer needs and creates
market leadership, while service recovery promotes both reactive and proactive serve recovery.
Besides, innovation creates new services and solutions in the line logistics and professionalism
creates knowledge for a service provider in the field of the logistics industry. Track and trace
help in establishing the movement of services in the logistics chain and tracing of products in
case of loss during delivery services. This allows flexibility for the service provider to establish
solutions and provide unanticipated services in a timely and most effective manner. Relationship
orientation comes last as a way of sharing information and trust in the exchange parties
(Aguezzoul, 2014).
Price and Service Supplier
Considering a large company with more than two suppliers will prefer customer
interaction and reliable performance to have a nearly linear relationship between logistics
performance and decision making. A large firm is more comfortable in using price and service
under segment two (Anderson, Coltman, Devinney & Keating, 2011). This is because the firm
should be the leader in both capacity and service recovery. The firm should be able to use
customer interaction as the basis for making decisions in order to make firm decisions. Thus, the
firm using price and service should not value innovation or professionalism to affect their
performance significantly. Under this case, the 10 attributes will be arranged as follows: (1)
reliable performance, (2) customer interaction, (3) service recovery, (4) supply chain capacity,
(5) relationship orientations (6) delivery speed, (7) track and trace, (8) supply chain flexibility,
(9) proactive innovation and (10) professionalism.
References
Aguezzoul, A. (2014). Third-party logistics selection problem: A literature review on criteria and
methods. Omega, 49, 69-78.
Anderson, E. J., Coltman, T., Devinney, T. M., & Keating, B. (2011). What drives the choice of
a third‐party logistics provider?. Journal of Supply Chain Management, 47(2), 97-115.
