Development of the conceptual business model of a third-party logistics provider for Indonesian small contractors

Abstract

Third-party logistics (TPL) providers have shown positive impacts on supporting large construction projects. Nevertheless, their role in smaller construction still requires further clarification. Small contractors, facing logistics challenges in material supply, are frequently underrepresented in research. We propose a TPL model designed as an intermediary between suppliers and small contractors for consolidating materials. In the initial phase, TPL's business model should be developed for its business foundation. Therefore, this study aims to develop TPLS's conceptual business model that addresses Indonesian small contractors. Three interview themes were employed in this research, involving three distinct groups of small contractors to explore their capacities within construction work, their assessments of specific materials, and their logistical practices. Based on the nine blocks of the Business Model Canvas (BMC), this study found that TPL can ensure material supplies for small construction projects by coordinating sourcing, providing temporary storage, and delivering materials through building strategic partnerships with material suppliers, transportation service providers, and warehousing facility providers. Furthermore, TPL's conceptual business model allows small contractors to gain better access to material supply while providing suppliers with certainty of material purchasing demand. Nonetheless, achieving successful TPL implementation requires dedication from every stakeholder in their assigned roles.