LOGISTICS - DEFINITION We follow the approach of Krauth et al.

(2004) to describe and classify different forms of logistics service providers. Third party logistics providers (3PL) are typically addressed in the context of long term outsourcing of logistics activities by a manufacturer (Sink et al., 1996; Razzaque, 1998). Carriers and shippers are labels for providers and buyers of transportation (Gibson et al., 2002). Freight forwarders are referred to as international trade specialists, offering a variety of services to facilitate the movement of international shipments (Murphy et al., 1992; Murphy and Daley, 2001). Shipping lines and shipping companies are conducting activities of transport and can be further distinguished into e.g. ocean freight shipping liners or ocean liner shipping (Durvusula et al., 2002; Fusillo, 2003). We define logistics service providers as companies, which perform logistics activities of a customer either completely or only in part (Delfmann et al., 2003; Lai, 2004). These functions can include traditional activities such as transporting, warehousing, packaging, etc. but also less conventional activities as those related to custom clearance, billing as well as tracking and tracing. Regarding warehousing activities one can distinguish dedicated and public warehouses. Dedicated warehouses are typically based on a long term contract and are built in cooperation with the shipper. This allows organizing processes and designing information systems, such that they smoothly integrate with the shipper. The level of automation is very high, allowing an efficient handling of goods (e.g. bus systems). The logistics service provider might even act as a call center for the shipper. Public warehouses on the other hand, serve on average around five customers. The warehouse is developed independently from the customers of the logistics service provider. The relationship can often be characterized as short term, level of process integration and automation are significantly lower than in dedicated warehousing. The relationship of a logistics service provider with his client can also be distinguished according to whether an open book or closed book approach is taken. In closed book arrangements the price is negotiated on a yearly basis and typically does not change during that time. In an open book environment on the other hand, the logistics service provider and his customer examine every month the cost situation. If it turns out that e.g. late shipper notifications led to an increase in costs, the price can be adapted accordingly.

PERFORMANCE MEASUREMENT FOR LOGISTICS SERVICE PROVIDER Logistics service providers offer services in a wide variety of areas (Sink et al. 1996) transportation, warehousing, inventory management, order processing and value added services. Lieb and Kendrick (2003) report that third party logistics service providers also offer services such as contract manufacturing, assisting customers with purchasing and offering financial services (e.g. insurances, real estate, et cetera). Engaging in e-commerce was perceived as the single most important business opportunity for the surveyed companies. Logistics service providers are further trying to expand their activities outside their home country (Lemoine and Dagnaes, 2003). PERFORMANCE MEASUREMENT OF WAREHOUSE MANAGEMENT Faber et al. (2002) examine information systems for warehouse management. In their exploratory study they examine complexity of warehouses and control structure. Complexity of warehouse management is indicated among others by amount and heterogenity of handled products, the extent of overlap between them, amount and type of technology as well as characteristics of associated processes. Their findings suggest that warehouses with a high daily amount of processed order lines and amount of stock keeping units will be best supported by customized software. Moberg and Speh (2004) study the process of selecting logistics service providers in order to outsource warehousing. Their empirical evidence is based on a survey in the US to customers of logistics service providers that offer warehousing activities. According to their findings, the most important indicators for choosing a particular logistics service provider are related to responding to service requests, general management and ethical issues. Criteria that seem to be less important are the risk affinity of logistics service providers, information technology, company size and coverage. Colson and Dorigo (2004) present a software tool which allows selecting public warehouses. Their extensive list of decision criteria includes: storage surface and volume, dangerous items, possibility for temperature control, separation of storage areas, control for temperature humidity, ventilation, offices on site, geographical distance to highway connection, train, waterways, certification (ISO 9001/9002, SQAS, HACCP), opening hours, assistance with customs, use of technology such as RFID/Bar coding, modem connection, handling equipment (electric, gas and diesel/petrol forklifts) number and characteristics of docks.

Personnel of warehousing departments have been addressed in literature (Autry and Daugherty, 2003). They studied the fit between the warehouse and its employees, worker satisfaction and how warehousing employees cope with stress. Rogers et al. (1996) examined whether the use of information technology affects performance of warehouses. They conducted a survey including both public and dedicated warehouses. Their findings suggest that the use of information technology is related to several positive outcomes, such as improvement of quality, cycle times might be reduced as well as an increase in productivity. The Fraunhofer Institut for Materialfluss und Logistik examined a wide range of warehouse management systems (Fraunhofer Institut fr Materialfluss und Logistik, 2005). They use more than 2500 criteria to examine whether a warehouse management system fits to the respective company. They assess among others indicators such as: product range, user environment and system characteristics, basic functions such as order processing, inventory management, means of transport and typology of storage. THIRD-PARTY LOGISTICS In the recent past, third-party logistics (TPL) also referred to as logistics outsourcing (e.g. or part of their logistics operations (e.g. Lieb and Bentz, 2004, 2005a; Lieb and Miller, 2002; Lieb and Randall, 1999a).Despite the growing body of literature on this topic, efforts to synthesize the overall state of art of research on TPL have so far been rather limited. Razzaque and Sheng (1998) provided a comprehensive review of the logistics outsourcing literature, highlighting key research ndings from journals and other publications. An overview of TPL research is also offered by Skjoett-Larsen et al. (2003); being aimed at identifying the distinctive characteristics of the Nordic School of TPL in terms of research methodology, theoretical approaches or empirical ndings, their study reviewed only the contribution of Nordic TPL researchers to the international research agenda. More recently, Maloni and Carter (2006) provided a review of the survey-based portion of the TPL academic literature to assess its progress. Their work is only based on 45 publications, i.e. it does not cover all extant articles concerning TPL.As an attempt to ll this gap, this paper presents a review of the major literature and key ndings on TPL. An extensive literature search of academic journals from 1989 to 2006 was conducted, yielding a total of 152 articles. A framework is developed for identifying the key

content of the literature on TPL and used to classify the articles. The existing literature is also examined from a methodological. One of the challenges in trying to evaluate the growing body of literature on TPL is the lack of a single consistent denition of the concept. Indeed, many denitions and interpretations of TPL can be found in the literature (Skjoett-Larsen, 2000; Halldorsson and Skjoett-Larsen, 2004). Van Laarhoven et al. (2000) highlight that the terminology inthis eld is not always consistent; in some cases TPL is used as a label for traditional arms length sourcing of transportation and/or warehousing, whereas in other instances the term is used to describe an outsourcing of a more complex character that can encompass the entire logistics process.Likewise, Ojala (2003) as well as Knemeyer and Murphy (2005a, b) point out that a number of broad and narrow approaches to dening /interpreting TPL have been used by researchers. Some examples may help illustrate the varying scope of existing interpretations of the term TPL .According to Lieb (1992, p. 29). TPL involves the use of external companies to perform logistics functions that have traditionally been performed within an organization. The functions performed by the third party can encompass the entire logistics process or selected activities within that process. In a similar vein, Coyle et al. (2003, p. 425) suggest that TPL involves an external organization that performs all or part of a companys logistics functions. These broad denitions appear to suggest that TPL includes any form of outsourcing of logistics activities previously performed in-house. Alternative, narrower denitions link the TPL concept to some distinctive functional and/or inter organizational features of the logistics outsourcing relationship. Among them, Berglund et al. (1999, p. 59) emphasise the supply of management support in addition to operational activities by providers and the duration of the relationship as follows: Third-party logistics are activities carried out by a logistics service provider on behalf of a shipper and consisting of at least management and execution of transportation and warehousing. In addition, other activities can be included, for example inventory management, information related activities, such as tracking and tracing, value added activities, such as secondary assembly and installation of products, or even supply chain management. Also, the contract is required to contain some management, analytical or design activities, and the length of the co-operation between shipper and provider to be at least one year, to distinguish third party logistics from

traditional arms length sourcing of transportation and/or warehousing. Murphy and Poist (1998, p. 26) stress the duration and winwin nature of the relationship along with the customization and broader range of logistics services in the arrangement. According to their denition, TPL involves a relationship between a shipper and third party, which, compared with basic services, has more customized offerings, encompasses a broader number of service functions and is characterized by a longer term, more mutually benecial relationship.By these narrower denitions, TPL appears to be distinguished from the traditional outsourcing of logistics functions on a transaction-by-transaction basis presupposing that several features are fullled before the relationship between buyer and provider of logistics services can be characterized as TPL. These features include the provision of a broad range of services, a long-term duration, joint efforts to develop cooperation, the customization of the logistics solution, and a fair sharing of benets and risks, and suggest that TPL incorporates strategic and not just tactical dimensions (Skjoett- arsen, 2000).A sort of conciliation between the alternative broader and narrower views of TPL can be found in the denition offered by Bask (2001, p. 474), which describes TPL as relationships between interfaces in the supply chains and third-party logistics providers, where logistics services are offered, from basic to customized ones, in a shorter or longerterm relationship, with the aim of effectiveness and efciency. This denition is applied in the present article, because it clearly points out the essence of the TPL concept as involving business-to-business relationships where third parties full the logistics ARTICLE IN PRESS A. Marasco / Int. J. Production Economics 113 (2008) 127147needs of their clients in the supply chain they are operating in (Berglund, 2000), while recognizing the potentially wide range of these relationships in terms of scope, content and duration. It is to be noted that Bask (2001) conceives TPL as a set of three dyadic relationships linking seller, buyer and logistics service provider in a supply chain. However, as the author himself and Berglund (2000) observe, this triadic form of relationship cannot be considered as the normal case in that most TPL relationships are limited either to the dyadic relationship between seller (of the goods) and logistics service provider or buyer (of the goods) and logistics service provider and, accordingly, most research addresses the two-way linkage between the logistics service provider and either

the buyer or supplier (of the goods). In this study, this conceptualization of TPL as a dyadic relationship between shippers (buyers or sellers of the goods) and logistics service providers in a supply chain is adopted. META-THEORY OF SCM In terms of a theory for SCM, the evidence from this study shows that researchers have used a multitude of existing heories from other elds to explain aspects of the SCM eld. As a consequence, the theoretical foundations of the eld could best be described through a metatheory, i.e. a theory of theories (Tsoukas, 1993). Meta-theories aresuited to areas where single theories are not feasible, and where there is high level of diversity in ontological and epistemological bases. According to Tsoukas, a meta-theory articulates a set of ontological and epistemological principles that claries the nature of the eld and possible knowledge in it. It also helps bring together, in a logically consistent manner, a number of perspectives on a eld by specifying their individual domains of application. In this way, the relationships between various perspectives are claried and, ideally, the scope of application of these perspectives is specied. Researchers have drawn meta-theories in a number of areas, for example, Tsoukass meta-theory of management, and Poole and Van de Vens (1989) meta-theory of innovation. For the eld of SCM, no such attempts at drawing meta-theory have yet been made.