The role of personal relationships in supply chain risk information sharing: Perspectives from buyers and suppliers of logistics services

Marco Van Der Walt,Wesley Niemann,Arno Meyer

doi:10.4102/sajems.v24i1.3703

Abstract

Background: The frequent occurrence of supply chain disruptions highlights the importance of sharing supply chain risk information (SCRI) among buyers and suppliers in third-party logistics (3PL) services. Business relationships and long-term collaboration among supply chain partners (SCP), such as 3PLs and their clients, lead to the sharing of SCRI. Risk information sharing (RIS) cannot be effectively carried out unless these relationships are based on more than just transactional information sharing. Therefore, a better understanding is needed of how personal relationships influence RIS among these partners.Aim: The purpose of this study was to explore the role of personal relationships in supply chain RIS from the perspective of buyers and suppliers in 3PL services in South Africa.Setting: The study was conducted among buyers and suppliers in 3PL services in South Africa.Method: A generic qualitative research approach was followed to conduct 18 semi-structured interviews with senior managers, employed by buyers and suppliers of 3PL services.Findings: A personal relationship among buyers and suppliers of logistics services is the cornerstone to ensure that risk information is shared effectively. Accountability, reliability, and approachability are the main behavioural attributes required to ensure RIS among SCPs. Supply chain partners struggle to determine where the boundaries of a personal relationship lie, especially when risk information is shared. The most common mitigation strategies, when dealing with RIS, are the use of a code of conduct, a code of ethics and a standard non-disclosure agreement (NDA).Conclusion: The study provides insight into the role of personal relationships in supply chain RIS, the behavioural attributes required for RIS, and the challenges associated with RIS when a personal relationship is present. The study is, arguably, among the first empirical studies in the South African logistics services context to investigate the role of personal relationships in supply chain RIS.

Highlights

Keith Ferrazzi, a New York Times best-selling author, was quoted saying: ‘Power comes from sharing information, not withholding it’
Five main themes were identified from the data, namely the role of personal relationships in Risk information sharing (RIS), the behavioural attributes required for RIS, the challenges associated with RIS, the security risks associated with RIS and the risk mitigation of information sharing
The purpose of this study was to investigate the role of personal relationships in supply chain RIS from the perspective of buyers and suppliers in the South African 3PL context

Summary

Introduction

Keith Ferrazzi, a New York Times best-selling author, was quoted saying: ‘Power comes from sharing information, not withholding it’. Information technology (IT) innovations are shaping the modern-day supply chain and, as a result, firms and their supply chain partners (SCPs) are becoming progressively more dependent on information sharing among one another (Colicchia et al 2018:5; Kache & Seuring 2017:11). Third-party logistics partners can provide timely feedback, outsource processes and track service activities by sharing information (Zacharia, Sanders & Nix 2011:43–44). The frequent occurrence of supply chain disruptions highlights the importance of sharing supply chain risk information (SCRI) among buyers and suppliers in third-party logistics (3PL) services. Business relationships and long-term collaboration among supply chain partners (SCP), such as 3PLs and their clients, lead to the sharing of SCRI. A better understanding is needed of how personal relationships influence RIS among these partners

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Conclusion