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Data collection and analysis

Ellram (1996) noted that an in-depth analysis of a single
case is suitable when that case represents a critical example
that permits exploration of a well-formulated theory just
like a single experiment. In this instance, we use a singlecase
study design to help understand and explain the role of
a 3PL as a supply chain orchestrator. The data collection
technique used in this study was in-depth interviews, which
were recorded and subsequently transcribed and analyzed
(Yin 2002). Using purposive sampling guidelines and the
literature review developed in the first section of the
article led us to focus on the executives of a large and
well-recognized 3PL firm (Firm Z) with a wide range ofcustomers
that offered transportation management services
in the United States. Interview participants included seven
executives from Firm Z and one executive from a large customer
firm of Firm Z. This approach enabled in-depth analysis
of the firm itself and external validation from the
perception of the customer firm.

The focus of the interviews was to understand the value
provided by the 3PL to its customers, and the role they play
to deliver that value. To accomplish this objective, our interview
protocol borrowed heavily from well-established customer
value determination methodologies (Woodruff and
Gardial 1996). Open-ended interview questions were
designed to gain an in-depth understanding of the 3PL operations
and services, the benefits accrued to customers, and
the value delivered through the relationship (see Appendix).
Each in-depth interview lasted between 60 and 90 min and
was tape recorded and subsequently transcribed for analysis.
External validity is assured through replication of findings;
in this study, using a single case, external validity was
assessed based on the use of relevant literature as data
sources, standard protocol, common location for data analysis,
and review of findings from external reviewers (Esper
et al. 2007).

Firm Z is a non–asset-based 3PL that is well known in the
industry and handles about $1.3 billion in freight costs per
year. They have been ranked as a Top 10 3PL for five consecutive
years by Inbound Logistics (2007). As noted earlier,
the purpose of this case study was not to develop new theory,
but to provide empirical support for the concepts found
in the literature. McCracken (1988) noted eight interviews
are sufficient for many research questions. Therefore, the
emphasis was to interview enough respondents to get an
understanding of the changing role of this 3PL (Firm Z) and
to stop collecting data when the information became redundant
(Flint et al. 2002).

Interviews were conducted with seven of the firm Z senior
executives and one customer, whose titles and areas of focus
can be seen in Table 2. Each of these executives has a different
set of responsibilities and as such provided a different
perspective on the role of the 3PL and the value provided to
customers.

Our research primarily focused on the value a 3PL company
offers its customers and firm Z prides itself on their
relentless focus on the customer. Using customer value
determination research protocol (Woodruff and Gardial
1996), the participants were asked to describe significant
attributes, consequences, goals, or value associated with the
services provided by the company to their customers. This
prevented any unwanted biasing of the respondents, as they
were not asked directly about the changing role of a 3PL,
but instead about the value they themselves provide to the
customer.

An analysis of the interview transcripts pointed to a customer
value proposition beyond the traditional 3PL offering.
Specifically, this 3PL had evolved from focusing on the bottom
line of reducing costs and improving efficiency to adding
to the top line and providing strategic benefits. The term
used by one of the executives interviewed that best seems to
capture this evolving and additive role of a transportation3PL
company is identical to what we found in the literature
an ‘‘orchestrator.’’

We gain a very strong foothold, and at that point, I
really feel like we’re the orchestrator of their supply
chain, not just a supplier, not just a vendor, but they’re
really coming to us to orchestrate that supply chain.
That takes time. I think that there’s a lot of value in
that.

Through our research interviews, we gathered support for
our model, the constructs used to define an orchestrator, and
our set propositions. The constructs of standardization, visibility,
neutral arbitrator, and collaborator repeatedly came
up in the interviews and are discussed below.

Standardization

Standardization was identified as a requirement to 3PL functioning.
The interviewees stated that with multiple carriers
they simply could not conduct their business without standardization.
One executive noted the benefit of having standardized
processes so that information can be shared:
It becomes a process standardization; it’s a tool for our
distribution center so that they can plan their inbound
and outbound work; it’s a tool for our buyer, so that
they have transactional information as a shipment moves
within the supply chain. It’s a conduit for our vendors,
so that they have updated information on routing instructions
on a P.O. level.

In the highly competitive 3PL industry, margins are small
such that companies need to focus on efficiency and standardized
processes. By specializing in very specific niches in
the transportation industry, 3PL companies exploit economies
of scope and economies of scale across multiple firms,
thereby broadening opportunities to optimize and reduce
costs. As 3PL firms deal with a wide range of shippers and
carriers from multiple industries that have their own specific
rules and processes, being able to standardize data, technology,
and processes is essential to capitalize on these opportunities.
Without data and technology standardization, there is
also no sense of the opportunities for collaboration or ability
to recognize an exception that needs extra attention.
Standardization also reduces costs by improving planning,
thereby reducing reactive behavior such as expediting. 3PLs
are more successful when they can focus on efficiency, where
products are shipped and handled under standard procedures
in a predictable manner. If the 3PL company had to make
adjustments to the freight constantly, their costs would automatically
increase. One of the largest costs in shipping products
occurs when freight must be expedited. One of the
executives interviewed stated the following:
Spur-of-the-moment shipments cost everybody the most
money. That’s why the consumer prices are higher,
because somebody decides, Well, I’ll just send this out
LTL or FedEx or whatever, and what we have found is,
we can go in, and the biggest savings that we have provided
our companies are LTL consolidation.

Standardization is enabled by 3PL technology investment.
A 3PL company, whose core competency might be logistics,
can invest in technology infrastructure and capability that
can be shared across multiple customers. This enables the
3PL to provide a common technology platform that helps to
standardize data and processes, and enables greater visibility
and integration across supply chain entities. As one executive
noted:

Another benefit of our technology is to bring some commonality
across various legacy systems within a shipper
order system, a manufacturing system, or whatever you
want to call the accounting system. Some of the many
internal legacy systems that companies have, and they
cannot afford to integrate those, even though there have
been many years of push for enterprise resource planning
systems.

Visibility

The interviews underscored the importance of visibility.
Standard data and processes enable visibility to opportunities
for load consolidation, improved asset utilization, and
exceptions with the potential for disrupting the supply chain.
As noted by another executive:
It gives them visibility to their product, which is probably
the quickest thing, the thing that most of the customers I
have dealt with say, I don’t know where my shipment is.
So, those are things that we can bring to the table immediately,
and using just our website: Being able to track a
shipment or a P.O. number, whatever level that we set up
with them that they want to see; having availability on
one screen; all of their shipments with all of their carriers,
pieces and origin and destinations.
Visibility enables better planning for both carriers and
shippers in that, carriers can see what other freight is available
in need of transport and shippers can benefit by seeing
what carrier capacity is available:
We have improved freight visibility and improved carrier
visibility to where carrier capacity is how we can mix
and match and coordinate shipments and carriers to create
efficiency and improved service. A shipper has their
own environment. But, what they don’t know is what
other freight is around them that they can link up with,
because they’re concerned about themselves. We bring
the ability for them to have visibility to other freight networks
through (our) platform.
Visibility is a tool that enables 3PL companies to coordinate
or orchestrate the supply chain by providing information
they can act on to identify opportunities for
consolidation or collaboration that are beneficial to carriers,
shippers, and their customers. This leads to greater efficiency
for both the carrier and shipper as pointed out by another
executive:

We can bring visibility to that network more efficiently
and quicker than shippers can do themselves. Because we
can do that, because we can tell a carrier that they’re
going to go from a location A to a location B, and that
they are going to get a load out of location B that gets
them back home or gets them back to location A or
another destination. That improves the carrier’s
efficiency.

Table 2: Characteristics of interviewees

Title Company Area of focus
Senior Vice
President
3PL Overall strategy and
vision
Vice President 3PL Logistics services
Vice President 3PL Logistics services
Senior Vice
President
3PL Operations, which is
basically the fulfillment
of our responsibilities to
our customers and the
ongoing client
management of a
customer
Vice President 3PL Technology development
Vice President 3PL Business development for
our logistics technology
tools and software
improvements
Vice President 3PL Operations—manage
contract side of our
business. These are the
long-term relationships
with our clients, typically
very heavy system
integrated a typically
three to five year
long-term contract
Director Customer Director of inbound
transportation; I work
with the Senior Vice
President of logistics on
inbound distribution and
transportation into our
D.C. network

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