Value co-creation in an outsourcing arrangement between manufacturers and third party logistics providers: resource commitment, innovation and collaboration

Abstract

Purpose

This paper aims to explore value co-creation between manufacturing firms and third-party logistics providers (3PLs). The specific focus is on resources and value co-creation with the aim to examine a set of relationships among the 3PL’s resource commitment, collaboration and innovation, and their performance outcomes. Design/methodology/approach

Survey data consisting of 142 UK manufacturing firms are used to study the 3PL and manufacturing customer value co-creation. The confirmatory factor model (CFA) and subsequent structural equation model were tested using EQS 6.1. Findings

The findings show that collaboration between the manufacturers and the 3PLs mediates the relationship between resource commitment and innovation, and performance. 3PLs are becoming much more of a collaborative partner which support the idea of value co-creation strategy. Research limitations/implications

The study is cross-sectional; temporal evolution of value co-creation should be studied in the future. Practical implications

When manufacturers and 3PLs collaborate to target efforts strategically, the 3PL’s resource commitment can be directed towards the development of new innovative approaches. Originality/value

The study contributes to the discussion of forms of co-creation, and theoretical frameworks which would enable us to understand how customers and other actors engage with the companies in collaborative value creation activities.