The Grants Register

Abstract

The purpose of this paper is to present a framework for purchasing transport services to enable small and medium size enterprises (SMEs) to improve relationships with logistics service providers (LSPs) and enhance their own competitive advantage and profitability. Many SMEs lack competence in purchasing transport services and a subsequent lack of "purchasing power" may cause SMEs to be treated as "order takers" rather than "order makers" by LSPs, who have more leverage in the purchasing process. This research stemmed from a knowledge transfer research project between the focal company and a university comprising a longitudinal single case study using action research for developing and implementing the framework. A framework using several tools for purchasing transport services and improving transport performance has emerged from this research. Benefits from using this framework were enjoyed by both the focal company and its LSPs and the focal company improved the relationship power balance. The research and resulting framework are based on a single case study and have not been tested in other firms or markets. However, the proposed framework may be applied in other contexts, entirely or in parts. The research offers practical insights to a frequently-encountered logistics issue for SMEs through developing and applying specific processes for practical transport purchasing. The paper contributes by synthesising the literature relating to the transport purchasing process generally and in SMEs. It also provides a framework for SMEs to improve their transport purchasing efforts, thereby enhancing economic and operational efficiency. [PUBLICATION ABSTRACT]