Supply chain finance is not for everyone

Abstract

PurposeLogistics service providers (LSPs) have unique resources and capabilities that position them to deliver supply chain finance (SCF) solutions. The study aims to discuss and illustrate the necessary resources and process of value creation and capture of LSPs, potentially offering SCF solutions.Design/methodology/approachRelying on a theoretical framework, combining a resource-based view (RBV) with the literature on SCF, the authors apply an abductive case study methodology, including 11 interviews with representatives from four LSPs.FindingsThe main findings are as follow: (1) although an LSP has sufficient resources for value-added SCF solutions, it may not capture enough value to motivate realising them; (2) an LSP considering offering SCF should account for the interaction between its resources and cargo transit times, risk and regulatory restrictions and (3) future studies should distinguish between financing the logistics services and the moved products.Research limitations/implicationsThe authors contribute to the growing field of SCF research by analysing motives and barriers for LSPs to offer SCF service to their customers. Because none of our case companies decided to move beyond experimentation further research is needed on the resources and capabilities needed for LSPs to successfully venture into SCF.Practical implicationsThe study provides LSPs with clear indications of the difficulties involved when contemplating a move into SCF solutions and discusses the potential value of offering such services.Originality/valueDespite evidence of LSPs engaging in SCF in various industries, academic contributions do not go beyond operational conditions or quantification of benefits. The authors add evidence on how LSPs are currently evaluating the prominence of adding SCF to their value offerings, including a new perspective on resources, value generation and capture mechanisms.