4th party logistics service providers and industrial cluster competitiveness. Collaborative operational capabilities framework
| Date | 08 August 2016 |
| Pages | 1303-1330 |
| DOI | https://doi.org/10.1108/IMDS-06-2015-0248 |
| Published date | 08 August 2016 |
| Author | Nachiappan Subramanian,Angappa Gunasekaran,Thanos Papadopoulos,Pie Nie |
| Subject Matter | Information & knowledge management,Information systems,Data management systems |
4th party logistics service
providers and industrial
cluster competitiveness
Collaborative operational
capabilities framework
Nachiappan Subramanian
Nottingham University Business School, China,
The University of Nottingham Ningbo China
Angappa Gunasekaran
Department of Decision and Information Sciences,
Charlton College of Business,
University of Massachusetts Dartmouth,
North Dartmouth, Massachusetts, USA
Thanos Papadopoulos
Kent Business School, University of Kent, Chatham, UK, and
Pie Nie
Nottingham University Business School,
The University of Nottingham Ningbo China,
Ningbo, China
Abstract
Purpose –Firms within industrial clusters are subject to challenges such as globalization, limited
resources, volatility of international markets and financial instabilities. 4th party logistics (4PL)
service provider s are supporting ind ividual firms to ove rcome such challen ges by using
collaborative operational capabilities from within an industrial cluster to their enhance
competitiveness. The purpose of this paper is to focus on China and proposes a collaborative
operational capabilities framework to illustrate the role of 4PL in industrial cluster competitiveness.
Design/methodology/approach –The paper follows an extensive literature review and structured
interviews in two types of clusters, drawing on resource-based view and importance-performance
matrix analysis.
Findings –The paper proposes six elements (that is, synergy of logistics, expansion of industrial
chain, financial ability, creativity and innovation ability, cooperation of companies and flexibility of
supply chain) that comprise collaborative operational capabilities, and highlights the role of “creativity
and innovation ability”and “supply chain flexibility”in the use of 4PL for industrial cluster
competitiveness in Chinese context.
Research limitations/implications –The paper focusses on China and hence it could also be tested
in the developed countries’context with the support of large-scale empirical data to investigate further
its usefulness and to identify other constraints.
Originality/value –The study contributes to the 4PL literature in that it proposes a framework that
extrapolates the importance of 4PL in industrial cluster competitiveness in China.
Keywords Collaboration, Fourth party logistics, Importance-performance matrix analysis,
Industrial clusters, Operational capabilities
Paper type Research paper
Industrial Management & Data
Systems
Vol. 116 No. 7, 2016
pp. 1303-1330
©Emerald Group Publis hing Limited
0263-5577
DOI 10.1108/IMDS-06-2015-0248
Received 20 June 2015
Revised17February2016
Accepted 15 March 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
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4PL service
providers
1. Introduction
Nowadays competition takes place at industrial cluster level rather than at the firm level.
Industrial clusters (hereafter: clusters) have common themes such as dynamic
interactions, systems recognition, social infrastructure and geographic scope
(Kleinhardt-FGI report, 2002; Trappey et al., 2010; Zelbst et al., 2010). Humphrey and
Schmitz (2002) suggest that clusters share characteristics with value and supply chains,
in that both acknowledge the importance of competitionin global markets and the role of
governance to coordinate economic-related activities through non-market relationships.
However, supplychains and industrial clusters differin that they operate in “distinct loci”
(p. 1018), that is, different areas of focus. In supply chains multiple firms join together to
produce products whereas in industrial clusters multiple firms would produce similar
products and are located in a single region. In clusters resources are usually stemming
from within the locality and they become competitive whenthey also work with external
service providers and to im prove additional opera tional capabilities thro ugh
collaboration. Collaboration reduces inter functional and inter organizational conflict
and promotes the development of a distinctive relationaladvantage (Nicovich et al.,2007;
Allred et al., 2011).It is different than coopetition, in that in coopetition the relationship is
between competing firms, which cooperate first with each other to jointly create value
and establish themselves in a bigger market, and then they individually compete to gain
market share and value in the market they have created (Brandenburger and Nalebuff,
1996; Ritala and Hurmelinna-Laukkanen, 2013). Gnyawali and Park (2011) define
coopetition as the simultaneous pursuit of collaboration and competition. However, the
importance of linking clusters with the external context has been weakly theorized,
although frequently acknowledged (Humphrey and Schmitz, 2002).
4th party logistics (4PL) service providers are useful integrators in developed countries
to improve the competency as well as to scale up the clusters’collaborative operational
capabilities, defined as inter-firm sets of skills, processes, and routines used to create
synergy to jointly overcome challenges (Kleinhardt-FGI report, 2002). Scholars analyzed
how different logistics resources such as physical resources, h uman resources,
information resources, knowledge resources and relational resources can be bundled
together to assist in achieving sustainable competitive advantage (Wong and Karia, 2010;
Somsuk et al., 2012; Phusavat et al., 2013). However, they argued that empirical evidence
on how resources and their bundling for collaboration enable the competitiveness of
clusters is needed. There is limited research that investigates the process on how clusters
transform firm and supply chain resources into distinctive capabilities (Allred et al., 2011).
Additionally, there are differences between developing and developed countries, as
integration does not take place at the same rate (Humphrey and Schmitz, 2002). Therefore,
it is necessary to shed light upon how sets of firms within clusters in developing countries
collaboratively align with 4PL to leverage capabilities and attain competitive advantage.
To address these research gaps, this paper proposes a collaborative operational
capabilities framework drawing on the resource-based view (RBV) of the firm (Barney,
1996, 2001, 2012; Wu et al., 2006; Chae et al., 2014). Interviews are carried out in two
prominent industrial clusters (tha t is, electronic home appliances and textile
manufacturing) in Ningbo, which is one of the major industrial cities in China.
Dominant factors are identified using importance-performance matrix analysis.
Following Wu et al. (2010), we propose a framework that extrapolates major
collaborative operational capabilities, that is, “synergy of logistics,”“expansion of
industry chain,”“cooperation of companies,”“flexibility of supply chain,”“financial
ability”and “creativity and innovation.”
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