Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Logistics outsourcing and company performance of SMEs Evidence from 223 firms operating in Finland

Logistics outsourcing and company performance of SMEs Evidence from 223 firms operating in Finland Purpose – The purpose of this paper is to explore the current state of and future expectations concerning the usage of the outsourcing of logistics operations in small‐ and medium‐sized enterprises (SMEs), and to analyse and quantify the relationships between logistics outsourcing, costs and performance, financial performance, and the company context. Design/methodology/approach – The data were 223 manufacturing and trading SMEs from the Finnish logistics survey combined with detailed financial report‐based data, both referring to the year 2008. Statistical analyses including ANOVA and factor analysis were applied. Findings – Transport activities are excessively outsourced. Most companies report no outsourcing of order processing and invoicing, and half of them have not outsourced logistics IT systems. Outsourcing is expected to grow in all areas with strongest expectations in materials management, value‐added services, and in IT. The logistics costs for companies engaging in the medium level of outsourcing could be higher than those of other companies. Further research is needed to confirm this finding. No loss or gain in logistics performance due to outsourcing was observed. The more the companies are engaged in outsourcing, the more they monitor as well as collaborate internally and externally, or vice versa. In general, the results imply that management should not expect automatic gains from logistics outsourcing, and should rather analyse the company‐specific characteristics that support or in some cases suffer from the outsourcing decision. Originality/value – The article explores logistics outsourcing in SMEs combining financial report data with self‐reported measures. It analyses and quantifies the relationship of logistics outsourcing to logistics costs, financial performance, logistics performance, and company context. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Outsourcing: An International Journal Emerald Publishing

Logistics outsourcing and company performance of SMEs Evidence from 223 firms operating in Finland

Download PDF
21 pages

Loading next page...
 
/lp/emerald-publishing/logistics-outsourcing-and-company-performance-of-smes-evidence-from-VKJJzNJz00
Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1753-8297
DOI
10.1108/17538291111147982
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to explore the current state of and future expectations concerning the usage of the outsourcing of logistics operations in small‐ and medium‐sized enterprises (SMEs), and to analyse and quantify the relationships between logistics outsourcing, costs and performance, financial performance, and the company context. Design/methodology/approach – The data were 223 manufacturing and trading SMEs from the Finnish logistics survey combined with detailed financial report‐based data, both referring to the year 2008. Statistical analyses including ANOVA and factor analysis were applied. Findings – Transport activities are excessively outsourced. Most companies report no outsourcing of order processing and invoicing, and half of them have not outsourced logistics IT systems. Outsourcing is expected to grow in all areas with strongest expectations in materials management, value‐added services, and in IT. The logistics costs for companies engaging in the medium level of outsourcing could be higher than those of other companies. Further research is needed to confirm this finding. No loss or gain in logistics performance due to outsourcing was observed. The more the companies are engaged in outsourcing, the more they monitor as well as collaborate internally and externally, or vice versa. In general, the results imply that management should not expect automatic gains from logistics outsourcing, and should rather analyse the company‐specific characteristics that support or in some cases suffer from the outsourcing decision. Originality/value – The article explores logistics outsourcing in SMEs combining financial report data with self‐reported measures. It analyses and quantifies the relationship of logistics outsourcing to logistics costs, financial performance, logistics performance, and company context.

Journal

Strategic Outsourcing: An International Journal – Emerald Publishing

Published: Jun 28, 2011

Keywords: Logistics outsourcing; Company performance; Small to medium‐sized enterprises; Finland

References

  • Contracting out the physical distribution function: a trade‐off between asset specificity and performance measurement
    Aertsen, F.
  • Third party logistics – outsourcing logistics in partnerships
    Andersson, D.
  • A survey of third party logistics in Mexico and a comparison with reports on Europe and USA
    Arroyo, P.; Gaytan, J.; de Boer, L.
  • Connecting to Compete: Logistics Performance Index and its Components
    Arvis, J.‐F.; Mustra, M.A.; Ojala, L.; Naula, T.
  • Studies of trends in third‐party logistics usage: what can we conclude?
    Ashenbaum, B.; Maltz, A.; Rabinovich, E.
  • Transportation outsourcing, a survey of US practices
    Bardi, E.J.; Tracey, M.
  • Outsourcing in Australia
    Beaumont, N.; Sohal, A.
  • Outsourcing and industrial decline
    Bettis, R.A.; Bradley, S.P.; Hamel, G.
  • Third party logistics services: a Singapore perspective
    Bhatnagar, R.; Sohal, A.S.; Millen, R.
  • The supply chain role of third party logistics providers
    Bolumole, Y.A.
  • Third‐party logistics service providers: purchasers' perceptions
    Daugherty, P.J.; Stank, T.P.; Rogers, D.S.
  • Economies of integration versus bureaucracy costs: does vertical integration improve performance
    D'Aveni, R.; Ravenscraft, D.J.
  • Making more by doing less: an analysis of outsourcing and its effects on firm performance
    Gilley, M.K.; Rasheed, A.
  • The state of third‐party logistics in Europe
    Gooley, T.B.
  • Role of logistics outsourcing on supply chain strategy and management, survey findings from Northern Europe
    Hilletofth, P.; Hilmola, O.‐P.
  • Short‐run versus long‐run trade‐offs in outsourcing relationships: impacts on loyalty and switching propensity
    Juntunen, J.; Grant, D.B.; Jari, J.
  • Outsourcing and financial performance: a negative curvilinear effect
    Kotabe, M.; Mol, M.J.
  • Some propositions about outsourcing the logistics function
    La Londe, B.J.; Maltz, A.B.
  • Third‐Party Logistics: Key Market/Key Customer Study
    Langley, J.
  • 2010 Third Party Logistics, The State of Logistics Outsourcing, Results and Findings of the 15th Annual Study
    Langley, J.; Capgemini
  • 2005 Third Party Logistics, Results and Findings of the 10th Annual Study
    Langley, J.; Dort, E.; Ang, A.; Sykes, S.
  • A comparison of the use of third‐party logistics services by large American manufacturers, 1991, 1994 and 1995
    Lieb, R.C.; Randall, H.L.
  • State of Logistics in the Baltic Sea Region – Survey Results from Eight Countries
    Ojala, L.; Solakivi, T.; Hälinen, H.‐M.; Lorentz, H.; Hoffmann, T.M.
  • The use of third‐party logistics services: evidence from a sub‐Sahara African nation
    Sohail, M.S.; Austin, N.K.; Rushdi, M.
  • Finland State of Logistics 2009
    Solakivi, T.; Ojala, L.; Töyli, J.; Hälinen, H.‐M.; Lorentz, H.; Rantasila, K.; Naula, T.
  • Business Register, Enterprises 2008
    Statistics Finland
  • Supply chain performance benchmarking study reveals keys to supply chain excellence
    Stewart, G.
  • Logistics and financial performance: an analysis of 424 Finnish small and medium‐sized enterprises
    Töyli, J.; Häkkinen, L.; Ojala, L.; Naula, T.
  • Third party logistics in Europe – five years after
    Van Laarhoven, P.; Berglund, M.; Peters, M.
  • Customer perceptions on logistics outsourcing in the European consumer goods industry
    Wilding, R.; Juriado, R.