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Determining Factors For Supply
Determining Factors For Supply
Article
Determining Factors for Supply Chain Services Provider
Selection and Long-Term Relationship Maintenance: Evidence
from Greece
Damianos P. Sakas 1 , Nikolaos T. Giannakopoulos 1, * , Nikos Kanellos 1 , Christos Christopoulos 2
and Kanellos S. Toudas 1
Abstract: Background: Due to increased globalization and its subsequent rise in competitiveness, the
role of supply chain services (3PL) in managing logistics, reducing operational and non-operational
costs, and managing customer and supplier relationships, have become of utmost importance.
Customer-centric production has led to the development of a close relationship between production
processes. Amidst all this, the demand for logistic services has dramatically increased, thus putting
more pressure on firms for enhanced operational results, and leading to the outsourcing of their
internal and external logistic activities. On the other hand, supply chain firms that provide 3PL
services seek to enhance their sustainability and predict their customers’ demand. Methods: The
authors collected quantitative data from 81 firms that operate in various industrial sectors in Greece.
A questionnaire was sent for completion, in which firms could rate and evaluate various aspects that
were discerned as important for deciding to cooperate with a 3PL service provider and maintain this
cooperation in the long run. To extract the required outcomes, statistical analyses like categorical
Citation: Sakas, D.P.; regression (CATREG) and MANOVA were utilized. Results: The demand for 3PL services was affected
Giannakopoulos, N.T.; Kanellos, N.; by 3PL service providers’ operational performance based on accuracy, reputation, and IT capabilities,
Christopoulos, C.; Toudas, K.S. while the customer firms’ intention for maintaining cooperation with 3PL service providers was
Determining Factors for Supply affected by their reliability level, improved service efficiency, and trustworthiness. Conclusions: 3PL
Chain Services Provider Selection service providers should seek to improve the reputation, IT infrastructure, and accuracy of their firm’s
and Long-Term Relationship
operations to have a continuous demand for their services. Apart from that, 3PL service providers to
Maintenance: Evidence from Greece.
maintain the cooperation with their customers, need to enhance the levels of their services reliability
Logistics 2023, 7, 73. https://doi.org/
and efficiency, while also creating a bond of trust with their existing customers.
10.3390/logistics7040073
Academic Editor: Hao Yu Keywords: logistics; supply chain; sustainability; sustainable supply chain management; sustainable
logistics practices; 3PL services; CATREG; MANOVA
Received: 7 August 2023
Revised: 22 September 2023
Accepted: 28 September 2023
Published: 9 October 2023
1. Introduction
1.1. Logistics and Sustainable Supply Chain Management
Logistics describes the component of SCM that organizes, executes, and oversees
Copyright: © 2023 by the authors.
the successful and efficient movement of supplies, goods, and data across the whole
Licensee MDPI, Basel, Switzerland.
This article is an open access article
supply chain [1]. As a result, logistics management is operational in definition, whereas
distributed under the terms and
supply chain management is conceptual. To effectively satisfy the consumer, supply chain
conditions of the Creative Commons
management is primarily concerned with customer service enhancement as well as cost
Attribution (CC BY) license (https:// minimization [2]. In the past few years, supply chain firms have attempted to behave
creativecommons.org/licenses/by/ greener and provide customers with environmentally friendly commodities and services.
4.0/).
This situation has resulted in the birth of the green supply chain, which tries to emphasize
methods that cause a supply chain to operate in an environmentally friendly manner.
In the setting of supply chains, one can apply the concept of all three growth founda-
tions, including the ecosystem, economics, and society, all of which are critical factors in
establishing global sustainability [3]. Sustainability involves guaranteeing the long-term vi-
ability and continuation of company operations whilst improving the foreseeable wellness
of the entire system. Sustainability encompasses many more challenges than environmental
degradation, which is sometimes conflated with it, like contamination, the conservation of
resources, and elements of human existence including welfare, health, etc. [4].
The figurative recognition of the environment and business as interrelated struc-
tures that, when possible, preserve and recycle supplies and, as required, resist difficult
conditions [5], is critical. Fiscal variables have an impact on the probability of finding natu-
ral resources and the pace of utilization of their novel supplies, and higher costs stimulate
the development of mining and reclamation work [5]. Because of the rising scarcity of assets,
supply chain firms have emerged that are involved with components for reuse, returned
items for health or safety concerns, recycling, and goods for restoration [6]. Therefore, it
can be noted that many factors related to the internal and external environment of supply
chain firms tend to impact the demand for their services, affecting their sustainability.
The purpose of this paper is to analyze and discern the factors that lead firms to the
decision to outsource their logistics, thus using 3PL services, as well as those that support
firms’ decisions to maintain their cooperation with 3PL service providers. In short, this
research will examine, from the demand side, the factors that lead firms in the Greek
economy to use 3PL services, and the factors that affect their decision to maintain them.
The selected firms operate in sectors where the usage of 3PL services is a common practice.
Hence, it has been discovered that the main factors that affect the decision of customer
firms to outsource their logistics activities to a 3PL service provider are based on reputation,
the accuracy of the 3PL service provider’s operational performance, and their level of IT
capabilities. The demand of the customer firms for 3PL services is expressed by the years of
presence in their industry sector and the period of use of such services. Moreover, the factors
that affect the decision of firms to maintain their cooperation with 3PL service providers
are their reliability level, their improved service efficiency, and their trustworthiness.
The novelty of this research lies in the fact that the authors adopted the same study
and sample both for the analysis of the factors affecting the demand for 3PL services and
for those that affect the decision to maintain them. Furthermore, the demand for 3PL
services has been studied from the spectrum of the customer firms’ years of presence in
their industry sector and the period of use of such services. The total of the 26 determinant
factors underwent extensive statistical analysis, and from the MANOVA, it was discerned
that less traditional and common ones emerged. As seen in the related literature presented
below, the reputation, accuracy of operations, and the 3PL service providers’ capabilities
for IT were key. The authors separated the factors that determine the demand for 3PL
services and those that affect their decision to maintain their cooperation with 3PL service
providers. The above action serves as a distinctive factor for the novelty of the present
research, since, for the 3PL service providers cooperation maintenance, only firms that
currently use these firms were contacted. Given the above, and based on the wide usage
of quantitative research methods in the logistics sector, we established of the following
research questions:
Research Question 1 (RQ1): “Which factors of 3PL services affect the industry sector and the
number of employees of customer firms?”.
Research Question 2 (RQ2): “Which factors of 3PL services affect the usage and the type of 3PL
services used by customer firms?”.
Research Question 3 (RQ3): “Which factors contribute more to the demand of customer firms
for 3PL services?”.
Logistics 2023, 7, 73 3 of 21
Research Question 4 (RQ4): “Which factors contribute more to customer firms’ intention to
maintain the usage of 3PL services?”.
Following the reference of the paper’s contribution, the authors present recent liter-
ature and research related to the demand for 3PL services, as well as the maintenance of
collaboration with 3PL service providers (Table 1). The referred literature served as a basis
for the deployment of the present study, fulfilling the need to extend existing knowledge in
the field.
The present research paper is organized to extract valuable insights from the per-
formed analysis regarding supply chain services and firms’ sustainability as follows: in
the Introduction section, the presentation and analysis of the related theoretical framework
Logistics 2023, 7, 73 4 of 21
that concerns the present study is given, followed by the Materials and Methods section,
where the authors provide an extensive elaboration of the study’s direction, the gathered
sample, and the research questions to be answered. Then, in the Results section, through
extensive statistical analysis (categorical regression, MANOVA), the main outcomes of the
study are presented, while in the Discussion and Conclusions sections, the authors give a
clear depiction of the practical and theoretical implications that arose from the sample’s
examination and applied analysis.
Table 2. Cont.
The above factors for determining demand for supply chain services will be validated
using similar questionnaires in the following chapter of this paper, like the seven factors
for maintaining cooperation with providers of these services, i.e., in companies of various
industries related to the use of 3PL services.
Participating firms were asked to answer 11 questions about the factors influencing
their need for 3PL services, including their rating of each factor’s importance on a four-
point
Figure Likert
2. 3PL scale (very
services usage.important, probably important, probably unimportant, totally
Figure 2. 3PL services
unimportant), usage. these firms, some are new and others have operated for a long
etc. Among
Participating firms were asked to answer 11 questions about the factors influencing
their need for 3PL services, including their rating of each factor’s importance on a four-
point Likert scale (very important, probably important, probably unimportant, totally
unimportant), etc. Among these firms, some are new and others have operated for a long
Logistics 2023, 7, x FOR PEER REVIEW 9 of 22
period in their sectors, ranging from 1 to 120 months. Their size also varies as follows: 16%
Logistics 2023, 7, 73 of the firms employ less than 10 employees, 24.7% employ more than 10 and less than 50,
9 of 21
50.37% employ more than 50 and less than 250, and the remaining 22.3% employ more
than 250 employees (Figure 3).
3. Results 3. Results
3.1. Descriptive Statistics
3.1. Descriptive Statistics
Based on
Based on the results of the
the results
survey,ofthe the most
survey, the most
widely usedwidely
typeused typeservices
of 3PL of 3PL services
is the is the
provision of transport facilities at 66.7%, followed by warehousing facilities at 42%, and
provision of transport facilities at 66.7%, followed by warehousing facilities at 42%, and
thirdly, warehousing and inventory control services at 33.3%. In the next stage, after all
thirdly, warehousing and inventory control services at 33.3%. In the next stage, after all the
the firms rated the 26 factors, they also selected the most important one. Notably, only 16
firms rated the 26werefactors, they
selected byalso selected
at least the most
one firm as theimportant one. Notably,
most determinant for 3PLonly 16 were
services demand,
selected by at least one firm as the most determinant for 3PL services demand,
characterizing the remaining 10 as less important. The most important 3PL service characterizing
the remaining 10 as lessdrivers
demand important. The mostinimportant
are presented Figures 4 3PL and service demand drivers
5. The satisfaction of 3PLare services
presented in Figures
customers4 and 5. The
is ranked satisfaction
first with 27.2%,of 3PL was
second services customers
the price is ranked
of 3PL services first and
with 14.8%,
with 27.2%, secondthirdwaswasthe
theprice
operational
of 3PLefficiency based14.8%,
services with on theanddelivery
thirdtime
waswith 9.9%. In the same
the operational
efficiency basedframework, the selection
on the delivery time with of the main
9.9%. Infactor for maintaining
the same framework, cooperation
the selectionwithof3PL
theservice
providers was reliability at 54.3%, followed by trust and improved
main factor for maintaining cooperation with 3PL service providers was reliability at 54.3%, efficiency/effectiveness
followed by trust at and
13.6% (Figure 6).efficiency/effectiveness at 13.6% (Figure 6).
improved
Therefore, we see that in terms of the general categories of demand factors for 3PL
Therefore, we see that in terms of the general categories of demand factors for 3PL
services, the most decisive is that of quality of service with a percentage of 55.6%, followed
services, the most decisive is that of quality of service with a percentage of 55.6%, followed
by the category of cost of service with 20.9%, competitiveness (9.8%), relational factors
by the category(6.2%),
of cost ofthe
and service
generalwith 20.9%, competitiveness
characteristics of the 3PL service(9.8%),
provider relational
(6.2%). factors
(6.2%), and the general characteristics
Table 3 shows theofdescriptors
the 3PL service
of theprovider
3PL service(6.2%).
demand and cooperation
Table 3 shows the descriptors
maintenance factors,ofwhere
the 3PL theservice demand and
most frequently cooperation
occurring factorsmaintenance
receive the lowest
factors, where the mostinfrequently
values occurring
terms of their range, factors
mean, andreceive the lowest
standard values
deviation, in terms
verifying theof their of the
results
range, mean, andquestionnaire and underlining
standard deviation, verifyingthe thepreference
results of shown by the respondents
the questionnaire (e.g., customer
and underlining
satisfaction,
the preference shown by theservice price, reliability,
respondents etc.). satisfaction, service price, reliability,
(e.g., customer
etc.).
Table 3. Descriptors of demand and retention subfactors for 3PL services.
Table
3PL Services 3. Descriptors of demand and retention
Demand Std. subfactors for 3PL
3PL Services services.
Maintaining Std.
Range Mean Range Mean
Subfactors Deviation Subfactors Deviation
3PL Services Demand Std. 3PL Services Std.
Range Mean Range Mean
Subfactors Deviation Maintaining Subfactors Deviation
Subfactor 14: Sufficient
Subfactor 1: Service price 2.0 3.568 0.5687 3.0 3.346 0.8391
capacity
Subfactor 2: Continuous cost
3.0 3.247 0.7337 Subfactor 15: Flexibility 2.0 3.580 0.5887
reduction efforts
Subfactor 16: Information
Subfactor 3: Payment
3.0 2.926 0.9589 Technologies, Information 3.0 3.309 0.7849
flexibility
Technology capabilities
Subfactor 4: Customer
1.0 3.864 0.3447 Subfactor 17: Location 3.0 2.914 0.8396
satisfaction
Logistics 2023, 7, 73 10 of 21
Table 3. Cont.
F
Subfactors Coefficient B Std. Error Sig.
Statistic
Factor 14: Adequate capacity 1.004 0.416 5.834 0.003
Factor 16: Information
Technology, Information −0.560 0.306 3.352 0.023
Technology capabilities
F
Subfactors Coefficient B Std. Error Sig.
Statistic
Factor 18: Standardization (ISO etc.) 0.568 0.320 3.143 0.030
Factor 24: Culture Compatibility 0.642 0.360 3.178 0.039
In Table 8, we observe that the use or non-use of 3PL services is negatively related to
culture compatibility (significance level < a = 0.05).
Logistics 2023, 7, 73 13 of 21
Std. F
Subfactors Coefficient B Sig.
Error Statistic
Factor 24: Culture Compatibility −0.567 0.335 2.861 0.038
Therefore, in Table 9, we observe that the type of 3PL services used is negatively related
to standardization (significance level < a = 0.01), and positively related to the ownership of
assets for operations (significance level < a = 0.05).
3.2.2. MANOVA
MANOVA assumes multivariate normality of variables at each factor level and a
common covariance matrix [47]. In Table 10, the process of comparing the multivariable
means of the years of presence in a specific branch, of the time interval of using 3PL services,
and their quotient with the 26 factors is observed, from which it emerged that the four
tests, except for Roy’s largest root, reject the null hypothesis of MANOVA; therefore, the
variable means (mean vector) of populations are not the same (significance level < a = 0.05).
Pillai’s trace is statistically positive, meaning that increasing values of the statistic indicate
outcomes that contribute more to the model. There is evidence that Pillai’s trace is more
robust than other statistics to violations of model assumptions [48].
In the second phase of the MANOVA, we compare the means of the 26 factors affecting
the demand for 3PL services, as expressed by the combination of the years of presence in a
specific industry and the period of using 3PL services (Table 11). From the results obtained,
we can see that the factors of operational performance based on accuracy and reputation
significantly impact the years of presence in a sector and period of use of 3PL services
(significance level < a = 0.05).
The last table of the MANOVA results, Table 12, presents the effect and importance
of each of the 26 factors individually in the years of presence in a specific industry and
the period of use of 3PL services. Here, we see that operational performance based on the
accuracy (significance level < a = 0.05) and 3PL service usage span have a significant effect
on years of presence in a specific sector, IT capabilities (significance level < a = 0.05), and
reputation (significance level < a = 0.01).
Logistics 2023, 7, 73 14 of 21
4. Discussion
The companies of the sample chose customer satisfaction as the most important
determinant at 27.2%, followed by the price of 3PL services at 14.8%, and the operational
efficiency based on the delivery time at 9.9%. As we understand from the statistical analysis
that followed, additional factors surfaced, highlighting the impact of these factors on
the demand for 3PL services and the decision to maintain cooperation with 3PL service
providers. The variables of the years of presence in a particular industry and the period of
use of 3PL services were used as dependent variables for 3PL services demand, and the
industry sector, the number of employees, the usage of 3PL services, and the type of 3PL
services used were deployed as dependent variables of the customer firms’ profile.
From the results of the statistical analysis, it can be concluded that the factors that
influence the demand of firms for supply chain services, as expressed by their years of
presence in a given industry and the period of 3PL services usage, are the reputation, the
operational performance based on accuracy, and the capabilities for IT of the provider
of 3PL services. The selection of the main factor for maintaining cooperation with 3PL
service providers and promoting firms’ sustainability, showed that the reliability of the 3PL
service provider is of greater importance, with trust and improved efficiency/effectiveness
coming second. Last in order came alignment to strategic objectives, communication, and
business integration.
Summing up, regarding the research questions of the paper, it is worth referring that
the answer to research questions 1 and 2 is:
(a) The factors of adequate capacity and IT capabilities of 3PL service providers affect the
industry sector of firms that tend to use such services, while the factors of standard-
ization and culture compatibility of 3PL service providers affect those firms’ number
of employees.
(b) The factor of 3PL service providers’ culture compatibility affects the choice of firms
for utilizing 3PL services, while the factors of standardization and ownership of assets
for operations affect the type of 3PL services used by customer firms.
Furthermore, concerning research questions 3 and 4, the following outcomes have
been provided throughout this paper:
(a) The factors that have emerged as important for accurately explaining the demand of
firms for 3PL services are 3PL service providers’ reputation, accuracy of operational
performance, and their IT capabilities.
(b) The factors that contribute more to customer firms’ intention to maintain cooperation
with 3PL service providers are their reliability level, improved service efficiency,
and trustworthiness.
Logistics 2023, 7, 73 15 of 21
The specific firms in our sample did not select adherence as a factor in maintaining
their partnership with supply chain service providers at all, which means that they do
not consider it to be a sufficiently important factor compared to the other six. Of these,
therefore, we distinguish the reliability of 3PL service providers as the most dominant
sustainability factor, followed jointly by trust and improved efficiency.
5. Conclusions
The main purpose of this study was to analyze and discern the factors that influence
companies’ demand for 3PL services and their decision to maintain their cooperation with
them. The factors that affect the demand for 3PL services are the operational performance
based on the accuracy, the reputation, and the IT capabilities of the 3PL service providers.
On the other hand, the reliability, improved service efficiency, and trustworthiness of the
3PL service providers were discerned as determinant factors in customer firms’ decision to
maintain cooperation with them. With the increasing expansion of businesses on a global
scale, companies around the world need to have a highly flexible and efficient supply chain
to improve the levels of corporate sustainability. Collaboration across the supply chain is
crucial in this quest [49].
As the results of the present study demonstrate, 3PL service providers that wish
to enhance their firms’ sustainability should prioritize any activities that might enhance
the reputation of their business, as well as the accuracy of their operations and their
capability of utilizing IT tools. The results of this research are in line with the results of
Meng et al. [50], Soh [31], and Bulgurcu and Nakiboglu [32] regarding the importance
of specific determinants of demand for 3PL services, but also with the results of Huo
et al. [51], Bagchi and Virum [52], and Karmazin [53] regarding the results of maintaining
cooperation with existing 3PL service providers. Concerning the sustainability of supply
chain firms, as expressed by the decision of customer firms to maintain the usage of 3PL
services, our findings are aligned with the studies of Ji et al. [54] and Nila and Roy [55],
which refer to logistic services provider selection based on sustainability characteristics.
Moreover, our research comes in terms of the increasing need for supply chain firms to
predict their customers’ demand for their services [56], as well as the prioritization and
promotion of their sustainability through long-term relationships with their customers [57]
and operational efficiency [58].
For their part, 3PL service providers should formulate an appropriate strategy to
improve the level of their services by promoting sustainability factors such as the rep-
utation of their business, their capitalization of IT tools, and the improved accuracy of
their operations. Finally, in their need for a long-lasting collaboration with their current
customers, they should evaluate and emphasize factors that will contribute to maintaining
this cooperation. Such factors consist of a high reliability level of their services, as well as
the trust that customers have in the provider and improved efficiency in their activities
and relationships.
The present research has some weaknesses in terms of the questionnaire and the
size of the sample. In particular, the study’s sample does not include equal portions of
the business sectors, while also it does not include all the industry sectors where logistic
activities are developed and 3PL services take place. This fact affects the generalizability of
the survey results, as the sample is not representative, since the response rate [59] of the
surveyed firms is low, close to 30%. Furthermore, the representativity of the survey could
be undermined by the fact that not all of the studied firms use a supply chain management
(SCM) tool, with some using only some modules of it.
Logistics 2023, 7, 73 16 of 21
Author Contributions: Conceptualization, N.T.G. and N.K.; methodology, D.P.S., N.T.G. and C.C.;
software, N.T.G. and N.K.; validation, C.C. and K.S.T.; formal analysis, N.T.G., N.K. and C.C.; investi-
gation, N.T.G. and N.K.; resources, N.T.G. and N.K.; data curation, C.C. and K.S.T.;
writing—original draft preparation, N.T.G. and N.K.; writing—review and editing, N.T.G., N.K.,
C.C. and K.S.T.; visualization, D.P.S., N.T.G. and N.K.; supervision, D.P.S., C.C. and K.S.T.; project
administration, D.P.S., C.C. and K.S.T.; funding acquisition, N.K. and C.C. All authors have read and
agreed to the published version of the manuscript.
Funding: This research received no external funding.
Data Availability Statement: Not applicable.
Conflicts of Interest: The authors declare no conflict of interest.
Degrees of Degrees of
Factors F Statistic Sig.
Freedom 1 Freedom 2
Years of presence in the industry 156.017 79 1 0.064
Period of use of 3PL services 128.114 79 1 0.052
5. Which of the above factors do you consider most important for your business?
(Mandatory, choose only one):
6. Indicate, in your opinion, the importance of the following factors in maintaining
cooperation with 3PL service providers. Please indicate how important each factor
is (Mandatory):
7. Which of the following factors do you consider most important for maintaining your
cooperation with 3PL service providers? (Mandatory, select only one):
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