Using fourth-party logistics management to improve horizontal collaboration among grocery retailers

Hingley, Martin, Lindgreen, Adam, Grant, David and Kane, Charles (2011) Using fourth-party logistics management to improve horizontal collaboration among grocery retailers. Supply Chain Management: An International Journal, 16 (5). pp. 316-327. ISSN 1359-8546

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Purpose: There is a paucity of literature considering horizontal collaboration, despite ongoing discussions about vertical integration among grocery retailers, suppliers, and third-party logistics (3PL) providers. This article investigates benefits of, and barriers to, the use of fourth-party logistics (4PL) management as a catalyst for horizontal collaboration.
Design/methodology/approach: Three suppliers, three logistics service providers (LSPs), and one grocery retailer participated in semi-structured interviews for this exploratory qualitative study.
Findings: Large logistics service providers can establish 4PL management, but the significant investment required to do so is a deterrent. Interviewees believed 4PL would negatively influence the grocery retailer–supplier dynamic but simultaneously would provide key potential benefits. Retaining supply chain control means more to grocery retailers than cost efficiencies realized through horizontal collaboration.
Research limitations: Fierce competition among major grocery chains means that most are unwilling to participate in studies of their systems, which restricts the research scope.
Practical implications: Some stakeholders want deeper integration into grocery supply networks, and the 4PL model could apply to diverse sectors and circumstances. This study shows that barriers to such integration are created by power plays among lead stakeholders in grocery retailing, which prevent horizontal collaboration, regardless of cost or other benefits.
Originality/value: The study investigates an under-researched aspect of horizontal supply chain collaboration in the highly relevant retail grocery sector: a high volume, mass market industry that requires an enormous logistics infrastructure and highly embedded networks of relationships.

Keywords:Fourth-party logistics (4PL) management, retailers, suppliers, horizontal collaboration, grocery supply chains
Subjects:N Business and Administrative studies > N850 Transport Studies
N Business and Administrative studies > N100 Business studies
N Business and Administrative studies > N240 Retail Management
Divisions:Lincoln International Business School
ID Code:4396
Deposited On:12 Apr 2011 21:06

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