Third-party logistics providers offering form postponement services: value propositions and organisational approaches

In today's global supply chains, third-party logistics providers (3PLs) can play an important role in implementing the principle of form postponement (FP). This proposes that activities creating product variety and the associated production mix decisions are deferred along a product family manufacturing and distribution process as long as possible. While both FP and third-party logistics have increasingly drawn the attention of the academic community over the last few years, less research has been carried out on FP supported by 3PLs. The present paper empirically investigates how 3PLs can deliver value to companies offering product variety by providing FP services, defined as the carrying out of variety-creating activities on behalf of these companies close to the target markets. Our findings indicate that, through an FP service, a 3PL can give its customers two different kinds of benefits: either improved performance in serving the customer's existing markets or entry into new geographical markets. Further, our results show that through the choice of the organisational solution for FP service provision, the 3PL can increase FP value by mitigating a number of disadvantages that the customer might incur in the case of in-house implementation of FP. Challenges that the 3PL needs to overcome to actually provide these potential benefits are also identified. The paper concludes by discussing the implications of our findings for both practice and research on FP.