Selection of logistics service providers (LSPs) is regarded critical and complex. Relationships tend to last for many years and have a critical role in the architecting of supply chains. Occasionally, relationships between buyer and LSP come to a crossroad of termination, extension or change; attrition of relationships can be caused by poor quality, changed market conditions, changed management, changed operational conditions on either side, and moves from competitors. This study uses a case-based methodology to provide an in-depth account of business motivations in relationship development in LSP selection. The study presents a tendering process as a fulcrum of "non-conformant‟ behaviour and unexpected outcome. Major findings are that contract-bound services and cost structures seem to drift into less transparent and informal patterns of interactions over time; this is wearing on the business relationship. Extreme fluctuations in the market – not sufficiently rapidly recognised by the LSPs – also put wear on relationship. In the case were relationships are too stressed, everything comes into play; newcomers might have good chances even if both parties should expect history to repeat itself. This paper could contribute to deepened understanding of both sides in either utilising the unexpected or to struggle harder for conflict resolution in relationships. Further implications are the presented processes as a background for volatility in global supply chains and radical changes in logistics services.
Proceedings of the 4th International Conference on Information Systems, Logistics and Supply Chain, 2012, p. 1-10
logistics; Supplier selection criteria; business environment; market dynamics
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4th International Conference on Information Systems, Logistics and Supply Chain, 2012