Organizing construction logistics outsourcing: a logistics strategy perspective

Abstract

PurposeThe construction industry shows an increased interest in how to manage logistics within construction projects. Often construction logistics is outsourced to a logistics service provider (LSP). However, construction logistics is normally approached either as a strategic decision or as an operational issue and rarely as a tactical concern. The purpose of this study is to explore how to organize the logistics outsourcing decision at strategic, tactical and operational levels.Design/methodology/approachThis study is performed as a single-case study within a construction corporation, containing (amongst others) a building contractor (BC) and a construction equipment rental company (CERC) offering logistics services.FindingsThe study shows that to procure construction logistics service successfully, BCs need logistics capabilities at strategic and tactical levels to maintain an alignment between the use of logistics services and operational characteristics. Simultaneously, CERC’s need to design their service offerings to correspond to the needs of the BC.Research limitations/implicationsThis study builds on a single-case study of a Swedish construction corporation. Further research is needed to better understand current logistics outsourcing and development practices and how these can be improved to foster better logistics management at the project level.Practical implicationsBCs find suggestions of different logistics organization structures and suitable outsourcing arrangements. CERCs and LSPs can use the findings to understand their customers’ needs and adapt service offerings.Originality/valueTo the best of the authors’ knowledge, this study is one of the first studies of how two companies within a corporation can work together to develop construction logistics service offerings.