THE INFORMATION TECHNOLOGY CAPABILITY OF THIRD‐PARTY LOGISTICS PROVIDERS: A RESOURCE‐BASED VIEW AND EMPIRICAL EVIDENCE FROM CHINA

Abstract

Third‐party logistics (3PL) providers have become important players in global supply chain management as increasing numbers of firms are outsourcing their logistics activities. However, the role of the information technology (IT) capability of these 3PL providers has not drawn much research attention. The way in which 3PL providers develop IT capability and how IT capability affects their competitive advantage deserve further investigation. This study has developed and tested a research model to address these issues. By integrating the concept of technology orientation from the strategic orientation literature into the resource‐based theory, we investigate both the antecedents and the consequences of IT capability among 3PL providers. The model was tested using survey data collected from 105 3PL firms in China. The results show that technology orientation has a significant impact on resource commitment to IT and managerial involvement in developing IT capability of 3PL firms. It also indicates that IT capability significantly affects three important dimensions of the competitive advantage of these firms, namely, reducing costs, providing innovative and customized services, and improving service quality. This study is one of the first to adopt the resource‐based perspective to investigate IT capability issues in the 3PL industry. It provides valuable insights for 3PL managers, and emphasizes the importance of technology orientation in the development of strong IT capability among 3PL firms.