Knowledge Integrated Business Process Management for Third Party Logistics Companies

Abstract

The growing importance of logistics as well as the increasing dynamic complexity of markets, technologies, and customer needs has brought great challenges to logistics. In order to focus on their core competency in such a competitive environment, more and more companies have outsourced a part or the entirety of the logistics process to third party logistics (3PL) service providers. 3PL has played a crucial role in managing logistics processes within supply chain management. Logistics processes require and supply various types of knowledge for planning, developing, operating, controlling and improving business processes. Therefore, in the current knowledge era, knowledge integrated business process management (KIBPM) is of significant importance for 3PL. This work applies KIBPM in 3PL from both a theoretical and practical perspective. The methodology for this study is a combination of literature and primary source research. From the theoretical perspective, it reviews the related literature on knowledge, KM, KIBPM and 3PL. It next analyzes application potentials as well as basic theories of KIBPM in 3PL, and proposes a framework for application. Furthermore, it studies the issues, knowledge sources and content, as well as KM approaches from the strategic and operational perspectives. In particular, it discusses the dynamics, logistics networks, business process networks and tacit knowledge sharing in 3PL. From the practical perspective, a case study of a leading 3PL provider demonstrates the drivers, practices and approaches of KIBPM application. The case study is based on in-depth interviews and extensive access to the secondary data of the firm. It analyzes the core business processes, the process knowledge and key activities of KM in the formulation of business strategy and the operation of business processes in contract logistics. In addition, it applies the proposed framework in this case. Furthermore, it discusses the findings from the literature and case study that relate to the research questions, compares the differences and similarities of KM in 3PL between theory and practice, and puts forward some research and managerial implications. This study has come to the conclusion that it is more effective and efficient to integrate KM in business processes. Knowledge of market, customer requirements, partners, and competitors and collaborative KM in the logistics networks are essential when choosing competitive strategies, process designs and development strategies for business. 3PL needs dynamic capabilities to sustain competitive advantage through KM. In operation, knowledge related business procedures and domains, as well as the results in project management of warehousing, intermodal transport and cooperation between geographic networks, have considerable value for business process execution, evaluation and improvement. 3PL motivates tacit knowledge sharing and effective knowledge acquisition, production, warehousing, distribution and application with a trusting organizational culture, process oriented structure, appropriate technology, and incentive measures. However, while KM is a tool for improving the competency and performance for the organization, learning capability is more important to keeping sustainable competitive advantage in the long term for 3PL. The application of KIBPM in 3PL supports business process management at both the strategic and operational levels. It especially contributes to business development, collaborative projects, intermodal transport, and logistics service improvement.