The International Journal of Logistics Management

Integration, supply chain resilience, and service performance in third-party

logistics providers
Chiung-Lin Liu, Ming-Yu Lee,
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Third-party
Integration, supply chain logistics
resilience, and service providers

performance in third-party
logistics providers 5

Chiung-Lin Liu and Ming-Yu Lee Received 29 November 2016

Revised 22 May 2017
Department of Shipping and Transportation Management, 1 July 2017
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Accepted 27 July 2017

College of Maritime Science and Management,
National Taiwan Ocean University, Keelung, Taiwan

Abstract
Purpose – Supply chain resilience (SCR) is essential to the success of firms. However, very few studies have
focused on the relationships between different types of integration, SCR and service performance from the
perspective of third-party logistics providers (3PLs). The purpose of this paper is to develop and assesses a
conceptual model for these relationships.
Design/methodology/approach – A total of 161 3PLs in Taiwan were surveyed and their responses were
analyzed using partial least squares structural equation modeling (PLS-SEM/PLS).
Findings – The responses of respondents demonstrated that, of the three types of integration (internal
integration, customer integration and logistics collaborator integration) used by 3PLs, internal integration
had the greatest effect on SCR. Customer integration was found to have three fully mediating effects on the
relationships between internal integration and service performance, between logistics collaborator integration
and SCR, and between logistics collaborator integration and service performance.
Originality/value – This study provides useful information on how different types of integration manifest
in the SCR and service performance of 3PLs.
Keywords Asia, Structural equation modelling, Supply chain resilience, Integration,
Third-party logistics providers
Paper type Research paper

1. Introduction
Owing to increasing specialization and globalization, companies’ supply networks have not
only become more complex but are also facing more frequent and diverse unpredicted
events (Moslemi et al., 2016). Recurrent natural and human-instigated disasters pose serious
challenges to supply chain management. For instance, the earthquake that struck
Kumamoto, Japan, in April 2016 led to a risk of disruption of the global automotive supply
chain (CNN, 2016). Therefore, in recent years, supply chain resilience (SCR) has become an
issue of great industrial and academic interest (Christopher and Peck, 2004; Hohenstein
et al., 2015; Petti et al., 2013).
Integration is one of the most important aspects of supply chain management (Huo, 2012).
Supply chain integration has been identified as a critical determinant of whether a company
can collaborate well with its supply chain partners, who typically favor service performance
(Zhang and Huo, 2013). Numerous studies have demonstrated the importance of integration
for a company’s performance (Huo, 2012; Zhao et al., 2013; Zsidisin et al., 2015). Additionally,
many recent studies have noted that integration can enhance a company’s resilience
(Christopher and Peck, 2004; Jüttner and Maklan, 2011; Petti et al., 2013; Wieland and
The International Journal of
Wallenburg, 2013). However, there has been relatively little attention given to empirical Logistics Management
studies of the power of integration to explain SCR. Even less research has focused on the issue Vol. 29 No. 1, 2018
pp. 5-21
from the perspective of third-party logistics providers (3PLs). 3PLs provide outsourced © Emerald Publishing Limited
0957-4093
logistics services that support some or all of the logistics functions required by customers DOI 10.1108/IJLM-11-2016-0283
 IJLM (Mentzer et al., 2001). A 3PL is “external to the customer company and is compensated for its
29,1 services” (Virum, 1993). 3PLs have no commonly accepted sub-dimensions of integration.
A limited number of studies have elucidated the influences of integration on the performance
of a 3PL when integration is treated as a single dimension (Shang, 2009). Very little empirical
evidence bears on the question of whether different types of integration can simultaneously
affect the SCR and performance of a 3PL.
6 This study develops and evaluates a conceptual model of the relationships between
different types of integration, SCR and service performance from the perspective of a 3PL.
The following key question is addressed:
• How do internal integration, customer integration, and logistics collaborator
integration influence SCR and service performance in the 3PL sector?
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This study makes various contributions to the relevant literature and practice. First, it
provides a theoretical framework to link internal integration, customer integration,
logistics collaborator integration, SCR and service performance for 3PLs. Second, it
investigates the effects of internal integration, customer integration, and logistic
collaborator integration on SCR and service performance. Third, this paper provides
evidence of the different effects of internal integration, customer integration and logistics
collaborator integration on SCR and service performance, improving our understanding of
the relationships between integration, SCR and service performance for 3PLs. Finally, this
study further elucidates several principles that can help managers of 3PLs allocate effort
and resources in different types of integration. These principles explain how each type of
integration should be managed to enhance SCR and service performance for 3PLs.

2. Literature review and research hypotheses

2.1 Resource-based view (RBV )
The RBV is taken to elucidate why companies perform differently and how they utilize
resources to maintain competitiveness and competitive advantages (Barney, 2001).
The RBV has been extensively utilized in logistics-related research to evaluate the
contributions of various resources to a company’s performance; these resources may include
information-based capabilities (Shang and Marlow, 2005), service capabilities (Liu and
Lyons, 2011), strategic environmental sourcing (Schoenherr et al., 2014) and reverse logistics
capabilities (Liu and Lyons, 2011; Vlachos, 2016). Previous studies have indicated that
integration can be treated as a resource that helps firms adapt to environmental changes
and rapidly respond to disruptions (Hohenstein et al., 2015; Ponomarov and Holcomb, 2009),
potentially improving firms’ abilities to solve customers’ problems and, thereby, improving
service satisfaction. The RBV can be used to determine the contribution of various types of
integration to firm performance. Various types of integration fall under the RBV’s definition
of resources, including internal integration (Huo, 2012; Liu et al., 2015), customer integration
(Huo et al., 2014; Zhao et al., 2013) and logistics collaborator integration (Shang, 2009).
This study takes the RBV perspective to evaluate the effects of different types of integration
(internal integration, customer integration and logistics collaborator integration) on both
SCR and service performance in the 3PL industry.

2.2 Integration
Zhao et al. (2013) indicated that integration can improve the operational performance of a
company by enhancing service efficiency, information flow, and cash flow through internal
and cross-organizational process management. Mellat-Parast and Spillan (2014) perceived
integration as a series of practical processes that involve internal and external
collaborations, the objective of which is to create operational and strategic effectiveness.
Previous studies examined integration from two perspectives – depth and width
 (Wiengarten and Longoni, 2015). In this sense, depth, which ranges from shallow to deep, is Third-party
used to classify integration into “coordinative” and “collaborative” forms (Świerczek, 2014; logistics
Wiengarten and Longoni, 2015). Previous studies have mostly divided integration into providers
internal or external integration based on the role of integration width (Kim, 2013). Internal
integration refers to integration between departments within a company (Kim, 2013;
Yu, 2015; Zsidisin et al., 2015), whereas external integration involves integration with
external partners. For example, external integration is seen in joint planning or information 7
sharing to achieve the shared objectives of supply chain partners (Yu, 2015; Zhao et al., 2015;
Zsidisin et al., 2015). To 3PLs, external integration can be further divided into customer
integration and logistics collaborator integration. The “customer” in this context refers to
the service user, while the “logistics collaborator” is the firm that provides logistics services
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for 3PLs. Customer integration involves complete logistics service planning to satisfy
customer needs, effective information system integration with major customers, and the
establishment of a fast order system for major customers. Logistics collaborator integration
refers to integration between 3PLs and other logistics service providers, such as agents,
transport companies, and other 3PLs. This integration involves the combination of these
collaborators’ logistics operations and information systems, effective feedback exchange,
and the assignment of costs to logistics services to support the expansion of the 3PLs’
service network and reduce the effects of inter-organizational differences on service
performance (Stank et al., 2009).

2.3 SCR
No firm definition of SCR exists (Hohenstein et al., 2015). Some academics consider SCR to be
the ability of a firm to respond rapidly to disruptions and to restore its operations after risk
events (Brandon-Jones et al., 2014; Sheffi and Rice, 2005; Williams et al., 2009), while others
view it as the ability to improve operational status after disruptions (Gölgeci and
Ponomarov, 2015). This study adopts the concept of Ambulkar et al. (2015), who considered
SCR to be the ability of a firm to alert and respond to environmental changes and to adapt
rapidly to disruptions.
Previous studies have offered many opinions concerning the composition of SCR
(Hohenstein et al., 2015). Some studies regard SCR as having a single dimension (Ambulkar
et al., 2015; Brandon-Jones et al., 2014; Gölgeci and Ponomarov, 2015), while others regard SCR
as having two dimensions, such as robustness and agility (Wieland and Wallenburg, 2013) or
redundancy and flexibility (Zsidisin and Wagner, 2010). A few researchers believe that SCR
comprises multiple components (Christopher and Peck, 2004; Petti et al., 2013; Scholten et al.,
2014; Soni et al., 2014). For example, Christopher and Peck (2004) indicated that SCR has four
elements: supply chain (re)-engineering, supply chain collaboration, agility and supply chain
risk management culture. Jüttner and Maklan (2011) suggested that SCR involves flexibility,
velocity, visibility and collaboration. Flexibility represents a company’s ability to adjust
following a disruption. Velocity refers to the speed with which an enterprise can execute
coping strategies. Visibility reflects a company’s knowledge of supply chain conditions.
Finally, collaboration describes the relationship between the organization and its supply chain
partners. In summary, all of the above dimensions of SCR are important and sometimes
overlapping. This study investigates factors that influence SCR and the relationship between
SCR and service performance. SCR is regarded as having a single dimension, as recommended
by many researchers (Ambulkar et al., 2015; Brandon-Jones et al., 2014; Gölgeci and
Ponomarov, 2015). It includes items such as an enterprise’s adaptability and velocity in
response to supply chain disruptions, as well as its awareness of the external environment.
For 3PLs, SCR is “an adaptive capability to prepare for unexpected events, respond to
disruptions, and recover from them by maintaining continuity of operations” (Gölgeci and
Ponomarov, 2013, p. 604). This capability involves coping with, adapting to and reacting to
 IJLM supply chain disruptions. Given the complexity of their supply chain network and market
29,1 uncertainty, 3PLs must address operational challenges that arise from bad weather,
disrupted or congested transportation networks, equipment malfunctions or incompetent
service from logistics collaborators, and others. They must consider when a disruption
might occur and how long its effects may last before normal operations can be resumed.

8 2.4 Service performance

The main objective of a 3PL is to increase value for its customers with their logistics
activities. The literature on firms and organizational performance has already provided
ample information on companies’ service performance. According to Huo et al. (2008), the
manufacturing industry regards service performance as including all performance
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indicators that are related to customer service (including the quality of deliveries, customer
satisfaction and service flexibility). Service performance, or customer value, refers to a
company’s current service outcomes relative to its industry average (Wieland and
Wallenburg, 2012). In supply chain management, service performance includes timeliness of
delivery, customer satisfaction, and the effectiveness of problem-solving for customers
(Wieland and Wallenburg, 2013).

2.5 Internal integration and external integration

Previous studies have shown that internal integration drives external integration
(Braunscheidel et al., 2010; Zsidisin et al., 2015). When collaboration between the internal
departments of a firm is lacking, conflicts can arise from divergent management goals that
frequently inhibit external integration. If coordination among departments in a 3PL is
lacking, then 3PLs cannot easily share required information, such as timely storage
information, with customers in a rapidly changing business environment. Similarly, internal
integration can improve information exchange and partnerships between 3PLs and their
logistics collaborators, helping the latter provide efficient resources and assistance when
needed. Therefore, the following hypotheses are proposed:
H1. Internal integration has a positive effect on customer integration.
H2. Internal integration has a positive effect on logistics collaborator integration.

2.6 Logistics collaborator integration and customer integration

The failure of 3PLs to engage in joint logistics activities with logistics collaborators has
disadvantages for customers in a complex logistics network (Chow et al., 2007; Shang, 2009).
For instance, limited logistics operation integration with a logistics collaborator will prevent
a 3PL from efficiently providing operational information to customers in a company’s
non-service network. Thus, the following hypothesis is proposed:
H3. Logistics collaborator integration has a positive effect on customer integration.

2.7 Integration and SCR

Previous research has found that integration significantly influences SCR (Christopher
and Peck, 2004; Jüttner and Maklan, 2011). Effective integration among departments not
only increases visibility but also reduces uncertainty; both effects are important in SCR
(Christopher and Peck, 2004). The internal integration of a 3PL enables the sufficient
circulation of risk information between its departments. In addition to reducing the
likelihood of disruptions, the effects of disruptions can also be effectively managed
through coordination between departments. The following hypothesis is proposed:
H4a. Internal integration has a positive effect on SCR.
 Hohenstein et al. (2015) showed that greater collaboration between supply chain participants Third-party
is associated with shorter response times to disruptions. External integration of 3PLs logistics
improves the circulation of risk information between supply chain partners, enabling them providers
to stay alert to environmental changes and respond rapidly to disruptions through
information sharing, preparation and planning, and coordinated operations (Christopher
and Peck, 2004). The following hypotheses are proposed:
H4b. Customer integration has a positive effect on SCR. 9
H4c. Logistics collaborator integration has a positive effect on SCR.
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2.8 Integration and service performance

Based on the RBV, integrating resources are critical to maintaining a company’s
competitiveness (Huo, 2012; Liu et al., 2015). Internal integration has also been proven to
positively affect operational performance (Alfalla-Luque et al., 2015; Huo et al., 2014;
Zhao et al., 2013). The enhancement of 3PLs’ service performance by internal integration
involves various factors. For example, internal information integration systems help 3PLs
to dynamically adjust transportation and storage plans in response to environmental
changes to ensure the dependability of delivery. Effective communications and
coordination among departments improve understanding of customer demands and
simultaneously reduce the conflicts that arise from divergent departmental management
goals thus enabling 3PLs to provide a high level of service to their customers. Thus, the
following hypothesis is proposed:
H5a. Internal integration has a positive effect on service performance.
Integration between 3PLs and customers can improve the timing and accuracy of shared
information, help 3PLs provide logistics services for customers and to preemptively adjust
their logistics activities to satisfy customer needs, thereby improving service quality.
Close collaboration between 3PLs and logistics collaborators enables 3PLs to respond
quickly to changes in market demand and satisfy customer requirements in a complex
logistics network. Previous studies have indicated that external integration has a positive
influence on service performance, including customer satisfaction and delivery quality
(Braunscheidel et al., 2010; Huo et al., 2014; Zhao et al., 2013). The following hypotheses are
proposed:
H5b. Customer integration has a positive effect on service performance.
H5c. Logistics collaborator integration has a positive effect on service performance.

2.9 SCR and service performance

In addition to reflecting a company’s adaptability to external environmental changes,
SCR also affects firm performance. Hohenstein et al. (2015) reviewed the literature
and indicated a correlation between better firm performance and shorter time
requirements for restoring operations after a disruption. A 3PL with higher SCR is
better able to detect potential risks and threats and can therefore prepare and allocate
resources in advance of disruptions. Accordingly, such 3PLs are better able to adopt
appropriate solutions when disruptions occur and meet customer requirements in a timely
fashion. Thus, the following hypothesis is proposed:
H6. SCR has a positive effect on service performance.
Figure 1 displays a conceptual model.
 IJLM Supply
Customer H4b
29,1 integration
chain
H5b
resilience
H6
H3 H1

H4a
Internal Service
10 integration H5a
performance

H2
H4c
Logistics
Figure 1.
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collaborator
The proposed model H5c
integration

3. Method
3.1 Selection of the sample
The list of members of the Taiwan Association of Logistics Management and the corporate
list of the Taiwan Logistics Intelligent Knowledge E-hub include 539 Taiwanese 3PLs.
All 3PLs provide transportation and storage services as defined by Langley et al. (1999).

3.2 Survey measures and items

The design of this study’s questionnaire survey was based on recommendations by Dillman
(2007). A preliminary survey was pre-tested in Taiwan by interviewing experts on 3PLs.
The questionnaire covered four topics: integration capabilities, SCR, service performance and
background information about the business. Table AI presents the final metrics of integration
capabilities, SCR and service performance. In all, 19 items were used to measure the integration
capabilities of 3PLs, based on the works of Liu and Lai (2016) and Stank et al. (2001). Four items
were selected as measures of the SCR, based on the relevant literature (Ambulkar et al., 2015).
Respondents rated their agreement with statements about their firms’ integration capabilities
and SCR using a seven-point Likert scale ranging from 1 for “strongly disagree” to 7 for
“strongly agree.” Agreement with statements about the four items used to measure service
performance was measured on a seven-item scale, based on the work of Wieland and Wallenburg
(2013). Respondents were asked to rate their company’s performance relative to the industry
average on a seven-point Likert scale, anchored by “1 ¼ much worse” and “7 ¼ much better.”

3.3 Analytical methods

A partial least squares structural equation modeling (PLS-SEM/PLS) method was used to test
the research hypotheses. PLS is composed of two elements: a measurement model and a
structural model (Hair et al., 2017; Vinzi et al., 2010). The former captures the relationships
between the constructs and indicator variables, while the latter represents the constructs and the
relationships between them. PLS is effective with small samples or when “the goal is to predict
key target constructs” (Hair et al., 2017, p. 23). Given the small sample size and the exploratory
nature of this study, in which the purpose is to predict and explain target constructs, PLS is an
appropriate analytical technique. All analyses were performed in SPSS version 12.0, AMOS
version 19.0 and SmartPLS version 3.2.6 (Ringle et al., 2015).

4. Results of analyses
4.1 Analysis of response rate and no-response bias test
The data collection phase of the study ran from the middle of March 2016 to the middle of
April 2016. The effective population size was reduced to 479, as 19 respondents indicated that
 their companies only provided services for internal users and 41 service providers did not Third-party
provide transportation or warehousing services. Ten of the 171 returned questionnaires logistics
were discarded because respondents gave the same responses to all Likert-scale items. providers
The total usable number of responses was 161. Therefore, the overall response rate was
33.6 percent (161/479).
In this study, a two-stage analysis was utilized to test for non-response bias in survey
samples. First, an independent-sample t test was carried out to evaluate the age of firms that 11
responded to the survey and those that did not. (Other firm characteristics were not
considered because less than 10 percent of the relevant data was available). In the second
stage, an independent-sample t test was used to examine the survey results for non-response
bias. The survey responses collected during the first 75 percent of the return period were
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compared with those collected in the final 25 percent of the period. The comparison
considered the total sales volume, number of full-time employees and level of all Likert
ratings (Armstrong and Overton, 1977). No item exceeded the 0.05 significance level, with
the exception of one integration item (ii5). Therefore, non-response bias was not an issue.

4.2 Missing data analysis and imputation

The amount of missing data associated with each variable was less than 2 percent, so
missing data did not seriously threaten validity (Hair et al., 2010, 2017). A model-based
method, known as the EM method, was used to impute missing values for all variables
except demographics.

4.3 Profile of respondents

Table I provides profiles of the responding firms. More than two-thirds of profiles of
respondents and their companies were provided by managers, vice presidents or more senior
executives, who offer an overarching and accurate view of a firm’s affairs (missing data ¼ 21).
Over 60 percent of the 3PLs had been operating in the logistics industry for more than 20 years;
26.0 percent, between 11 and 20 years; and almost 10 percent, less than 11 years. Nearly
34 percent of respondents reported that their firms’ 2015 total sales volume was less than
USD0.5 million, 32.9 percent reported a value of at least USD4 million and 32.9 percent
reported a value of between USD0.5 and USD4 million (with six 3PLs having missing data).
Only 16.0 percent of respondents reported more than 200 employees, 57.7 percent reported
fewer than 51 employees, and almost 26 percent reported between 51 and 200 employees (with
five 3PLs having missing data). Most sampled firms were local companies (83.8 percent),
followed by foreign-local ventures (9.7 percent) and foreign companies (6.5 percent) (with seven
3PLs having missing data).

4.4 Assessment of common method variance bias (CMV )

The use of a single data source and cross-sectional data collection made this study vulnerable
to CMV (Malhotra et al., 2017). To evaluate CMV, a confirmatory factor analysis (CFA) was
carried out on a single-factor model and a measurement model (Korsgaard and Roberson,
1995). The indices that were fitted to the single-factor model ( χ2 (324) ¼ 1,672.54, GFI ¼ 0.53,
AGFI ¼ 0.47, RMSEA ¼ 0.16) were significantly worse than those fitted to the measurement
model (Δdf ¼ 10, Δχ2 ¼ 794.43, po0.001). The results reveal that CMV is not an issue.

4.5 Measurement model

Tables II and III present the results of the measurement model assessment using PLS analysis.
All indicators in Table II load higher on the construct of interest than on their cross-loadings
with other constructs, verifying discriminant validity (Hair et al., 2017). All individual outer
loadings exceeded 0.700 (Hair et al., 2017). Moreover, each indicator’s outer loading on its
 IJLM Characteristics Frequency Valid % Cumulative %
29,1
Job title
Higher than manager level 72 51.4 51.4
Manager 23 16.4 67.9
Accountant 21 15.0 82.9
Other 24 17.1 100.0
12 Total 140 (Missing data ¼ 21)
Age of firm (in years)
Less than 5 14 8.7 8.7
5-10 3 1.9 10.6
11-15 7 4.3 14.9
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16-20 35 21.7 36.6

More than 20 102 63.4 100.0
Total 161
Total sales volume (million USD)
Less than 0.5 53 34.2 34.2
0.5-4 51 32.9 67.1
4-10 26 16.8 83.9
Above 10 25 16.1 100.0
Total 155 (Missing data ¼ 6)
Full-time employees
Less than 51 90 57.7 57.7
51-200 41 26.3 84.0
Above 200 25 16.0 100.0
Total 156 (Missing data ¼ 5)
Ownership pattern
Local company 129 83.8 –
Foreign company 10 6.5 –
Foreign-local venture 15 9.7 –
Table I.
Profile of Total 154 (Missing data ¼ 7)
responding firms Note: n ¼ 161

respective construct was highly significant ( po0.001), providing evidence of the constructs’
convergent validity. Table III presents the results related to reliability. The rA and composite
reliabilities of the various constructs ranged from 0.903 to 0.926 and 0.925 to 0.939,
respectively, exceeding the recommended threshold of 0.700 (Dijkstra and Henseler, 2015;
Fornell and Larcker, 1981). Table III also shows the average variance extracted (AVE) and the
correlations among constructs. The AVE for all constructs exceeded Fornell and Larcker’s
(1981) acceptable value of 0.5. These results support the convergent validity of the measures.
The correlation matrix demonstrates that the square roots of the AVEs of most
constructs exceeded the corresponding correlation values for those variables. Moreover,
the confidence interval of the HTMT statistic does not include the value 1 for all constructs,
confirming discriminant validity (Hair et al., 2017). In summary, the results in Tables II and III
support the reliability and validity of the measurement used herein.

4.6 Structural equation model

Figure 2 displays the results of a PLS analysis of the research model with significant path
coefficients at the 0.05 level. Table IV summarizes the results. Bootstrapping with 5,000
samples (Hair et al., 2017) was carried out to evaluate the significance of path coefficients.
The VIF values of all predictor constructs exceed 0.2 and are less than 5.0. The results
 Internal Customer Logistics collaborator Supply chain Service
Third-party
integration integration integration resilience performance logistics
providers
ii1 0.795 0.655 0.605 0.519 0.538
ii2 0.822 0.670 0.647 0.508 0.540
ii3 0.855 0.661 0.607 0.434 0.406
ii4 0.869 0.679 0.685 0.483 0.429
ii5 0.830 0.604 0.586 0.375 0.419 13
ii6 0.803 0.571 0.582 0.345 0.437
ii7 0.830 0.646 0.655 0.361 0.358
ci1 0.663 0.761 0.672 0.457 0.515
ci2 0.526 0.714 0.602 0.394 0.525
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ci3 0.468 0.749 0.632 0.447 0.557

ci4 0.633 0.831 0.669 0.450 0.529
ci5 0.698 0.883 0.762 0.426 0.542
ci6 0.644 0.846 0.723 0.395 0.548
ci7 0.697 0.803 0.670 0.324 0.492
li1 0.587 0.666 0.738 0.322 0.480
li2 0.658 0.758 0.877 0.497 0.601
li3 0.678 0.755 0.917 0.440 0.571
li4 0.701 0.768 0.937 0.429 0.577
li5 0.652 0.732 0.869 0.346 0.507
r1 0.434 0.492 0.437 0.886 0.457
r2 0.430 0.413 0.378 0.902 0.379
r3 0.496 0.437 0.433 0.926 0.415
r4 0.503 0.486 0.420 0.843 0.511
p1 0.493 0.568 0.500 0.501 0.890
p2 0.495 0.605 0.566 0.435 0.903
Table II.
p3 0.480 0.600 0.579 0.458 0.900
Outer loadings
p4 0.435 0.551 0.573 0.361 0.819 (italic) and
Notes: ii, internal integration; ci, customer integration; li, logistics collaborator integration; r, supply chain cross-loadings for the
resilience; p, service performance measurement model

Logistics Supply
Composite Cronbach’s Internal Customer collaborator chain Service
AVE rA reliability α integration integration integration resilience performance

Internal
integration 0.688 0.926 0.939 0.924 0.829
Customer
integration 0.640 0.907 0.925 0.905 0.775 0.800
Logistics
collaborator
integration 0.757 0.924 0.939 0.918 0.754 0.847 0.870
Supply chain Table III.
resilience 0.792 0.915 0.938 0.912 0.527 0.517 0.471 0.890 Inter-construct
Service correlations:
performance 0.772 0.903 0.931 0.901 0.542 0.662 0.631 0.501 0.879 consistency and
Note: Square roots of the AVE are shown on the diagonal reliability tests

demonstrate that collinearity among predictor constructs is not an issue (Hair et al., 2017).
The model fit index is SRMR = 0.067, revealing the model is acceptable (Henseler et al., 2016;
Hu and Bentler, 1999). The cross-validated redundancy index (Q 2 ) for each
endogenous construct exceeds zero (customer integration = 0.458; logistics collaborator
 IJLM R 2 = 0.760

29,1 Customer
Supply
0.267* chain
integration
resilience

R 2 = 0.307
0.317***
0.607*** 0.312* 0.387* 0.214**

14 Internal Service
integration performance

0.754*** R 2 = 0.488

Figure 2.
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Research model Logistics

results with collaborator
significant path integration
coefficients at R 2 = 0.569
the 0.05 level
Notes: R2 is the amount of variance explained by the model. *p<0.05; **p<0.01;

Paths Hypotheses conclusions

H1: Internal integration → Customer integration Supported

H2: Internal integration → Logistics collaborator integration Supported
H3: Logistics collaborator integration → Customer integration Supported
H4a: Internal integration → Supply chain resilience Supported
H4b: Customer integration → Supply chain resilience Supported
H4c: Logistics collaborator integration → Supply chain resilience Not supported
H5a: Internal integration → Service performance Not supported
H5b: Customer integration → Service performance Supported
Table IV. H5c: Logistics collaborator integration → Service performance Not supported
Summary of results H6: Supply chain resilience → Service performance Supported

integration = 0.409; SCR = 0.224; service performance = 0.351), showing that the model has
predictive relevance (Hair et al., 2017). The seven significant path coefficients support the
seven hypotheses. The results in Figure 2 demonstrate that internal integration exhibits a
direct and statistically significant relationship with the 3PLs’ customer integration (path
coefficient ¼ 0.317, p o0.001) and logistics collaborator integration (path coefficient
¼ 0.754, p o0.001). The results thus support H1 and H2 and show that an internal
integration critically enhances a 3PL’s customer integration and logistics collaborator
integration. The hypothesized positive relationship between logistics collaborator
integration and customer integration is supported (H3, path coefficient ¼ 0.607,
p o0.001), suggesting that logistics collaborator integration is an important factor in
determining the customer integration of 3PLs. Additionally, the hypothesized positive
relationships between internal integration and SCR (H4a, path coefficient ¼ 0.312, po0.05),
and between customer integration and SCR (H4b, path coefficient ¼ 0.267, p o0.05) are
supported, revealing that 3PLs must improve their internal integration and customer
integration to improve SCR. However, the direct impact of logistics collaborator integration
on the 3PLs’ SCR (H4c) was not supported. Furthermore, customer integration has a direct
and statistically significant relationship with the service performance of 3PLs, supporting
H5b (path coefficient ¼ 0.387, p o0.05), indicating the importance of 3PLs’ customer
integration in improving service performance. Two of the paths between the integration
and service performance – H5a (internal integration → service performance) and H5c
 (logistics collaborator integration → service performance) – are not statistically significant. Third-party
The hypothesized positive relationship between SCR and service performance is supported logistics
(H6, path coefficient ¼ 0.214, p o0.01), suggesting that SCR can help a 3PL achieve good providers
service performance. A mediation analysis with bootstrapping was performed to provide
evidence for the mediation effect suggested by Hair et al. (2017). The significance of the
indirect effect through the mediator was tested first. Then, the significance of the direct
effect of the independent variable on the dependent variable was evaluated. Customer 15
integration was found to have three full mediating effects on the relationships between
internal integration and service performance (indirect effect ¼ 0.123, t ¼ 2.244, p o0.05),
between logistics collaborator integration and SCR (indirect effect ¼ 0.458, t ¼ 6.585,
p o0.001) and between logistics collaborator integration and service performance (indirect
effect ¼ 0.162, t ¼ 2.101, p o0.05). Logistics collaborator integration was found to have a
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partial mediating effect on the relationship between internal integration and customer
integration (indirect effect ¼ 0.235, t ¼ 2.170, p o0.05). Table V summarizes the total effects
among the various variables, the implications of which will be discussed in the next section.

5. Discussion
5.1 Relationships between internal integration, customer integration, and logistics
collaborator integration
The results of this study reveal that internal integration has positive effects on both
customer integration and logistics collaborator integration for 3PLs. Therefore, 3PLs with a
higher degree of internal integration are more likely to exhibit more customer integration
and logistics collaborator integration, indicating that a 3PL’s internal integral planning
system and coordination between its departments favor information exchange between the
company and external members and facilitate the establishment of long-term partnerships.
This result is similar to findings of other studies (Alfalla-Luque et al., 2015; Braunscheidel
et al., 2010; Huo, 2012). For example, Huo (2012) found that internal integration can improve
customer integration and supplier integration for a manufacturer.
The research findings also demonstrate that internal integration can improve 3PLs’
customer integration through the partial mediating effect of logistics collaborator
integration. Hence, 3PLs can improve their informational and operational integration with
customers by collaborating with logistics collaborators. Interestingly, internal integration is
more likely to affect customer integration indirectly through logistics collaborator
integration than it is to affect it directly (0.754  0.607 ¼ 0.458 W0.317). A possible
explanation for this result is that, due to the complexity of the supply chain network and
market uncertainty, 3PLs must tackle more operational challenges than before when
providing services. An excellent logistics collaborator can improve the reliability of service
from a 3PL in a competitive environment. This improvement increases customer integration
more than the internal integration of 3PLs. Logistics collaborator integration has a
significant positive effect on 3PLs’ customer integration, implying that communication and
the combination of logistics collaborators’ operations and information systems contribute to
collaboration with customers.

Supply chain resilience Service performance

Internal integration 0.527 0.542

Table V.
Customer integration 0.267 0.445 Total effects of
Logistics collaborator integration 0.172 0.516 integration on supply
Supply chain resilience – 0.214 chain resilience and
Note: – indicates no relationship service performance
 IJLM 5.2 Integration and SCR
29,1 Although the direct effects of 3PL integration on SCR vary with the type of 3PL integration,
all types of 3PL integration directly or indirectly improve SCR. This result is similar to
previous studies (Christopher and Peck, 2004; Jüttner and Maklan, 2011; Wieland and
Wallenburg, 2013). For example, Wieland and Wallenburg (2013) found that information
sharing and operational integration between a manufacturer and external members improve
16 a company’s SCR. Of the three types of integration, internal integration has the greatest
effect on SCR, followed by customer integration and logistics collaborator integration. Both
internal integration and customer integration can directly enhance SCR, indicating that
3PLs can better cope with disruptions by adjusting interdepartmental coordination.
Collaboration with customers through various activities can also enable 3PLs to react
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rapidly to supply chain disruptions. The integration of logistics collaborators has no direct
influence on SCR. It can only indirectly increase SCR through the mediating effect of
customer integration. Accordingly, a 3PL cannot ignore customer integration if it wishes to
improve SCR through logistics collaborator integration.

5.3 Integration, SCR, and service performance

The internal integration of a 3PL has no direct impact on its service performance. However,
it can improve service performance through the full mediating effect of customer
integration. This finding is similar to results of previous studies that show a company can
improve customer value and create competitiveness through external resource integration
(Huo, 2012; Xu et al., 2014). For example, Huo (2012) pointed out that internal integration
can improve external-oriented performance through customer integration and separately
through supplier integration. As a result, customer integration can directly enhance 3PLs’
service performance, which reveals the external integrative capabilities of 3PLs to improve
operational performance in customer service. This finding is similar to those of Alam et al.
(2014) and Shang (2009). For example, Shang (2009) found that logistics integration can
improve service performance from a freight forwarder’s perspective. In contrast, logistics
collaborator integration of 3PLs has no direct impact on their service performance, but it
only indirectly improves service performance through customer integration. Hence, the two
types of 3PLs’ external integration with supply chain partners must be simultaneously
managed to optimize customer service. Of the three types of integration, internal integration
dominates service performance (total effect ¼ 0.542). This result is consistent with a
previous finding that internal departmental integration is the most important type of
integration for sustainable operations (Huo, 2012). As expected, SCR is a significant
contributor to 3PLs’ service performance, showing the adaptive capability to prepare
for unexpected events can help a 3PL improve customer service. This finding is similar
to that of Liu et al. (2017), who found that SCR improves the performance of firms in the
shipping industry.

6. Conclusion
The findings of this study have managerial implications for the 3PL industry.
They demonstrate that 3PLs should focus on internal integration before external
integration. The lack of internal information or departmental integration in a 3PL will
negatively influence information sharing or collaboration between customers or logistics
collaborators. Furthermore, a 3PL should not overlook its integration with logistics
collaborators, because this directly influences customer integration. For example, the failure
of a 3PL to establish a smooth logistics integration process with its logistics collaborators
will make the company’s provision of effective logistics information to customers more
difficult. This study also shows that internal integrative capabilities favor customer
integration in a manner that is mediated by logistics collaborators’ integrative capabilities.
 Additionally, a 3PL should develop different integration capabilities to improve SCR and Third-party
service performance. The results of this investigation reveal that a 3PL can directly improve logistics
SCR by increasing its internal integration ( for example, by using integrated logistics providers
operation systems or standardized operations); doing so helps to prevent disruptions and
helps the firm respond rapidly to any that occur, improving service performance, including
customer satisfaction and the rate of on-time delivery. In addition to directly improving a
3PL’s SCR, customer integration (in terms of customer relationship management, 17
information sharing, and communication with customers, for example) also directly
enhances its service performance. In contrast, logistics collaborator integration (involving
information sharing, risk allocation and relationship management with logistics
collaborators, for example) only indirectly enhances SCR and service performance via
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customer integration. Hence, close interaction between a 3PL and its logistics collaborators
facilitates information sharing, preparation, planning and collaboration with customers;
it, therefore, helps to prevent and respond rapidly to any disruptions and increases customer
satisfaction. Generally, a 3PL can only maximize SCR and service performance when all
three integration capabilities are fully developed. For example, in the absence of customer
integration, internal integration and logistics collaborator integration do not improve
service performance, as this effect is fully mediated by customer integration. Similarly,
customer integration fully mediates the effect of logistics collaborator integration on a 3PL’s
SCR. However, this study did not find any direct and significant effect of logistics
collaborator integration on SCR and service performance. Therefore, this study does not
recommend that a 3PL seek to improve SCR and service performance solely by improving
logistics collaborator integration. Rather, a 3PL must simultaneously develop positive
relationships among its internal departments and with its external supply chain partners to
maximize SCR and service performance.
This study has some limitations and further research in certain areas is required.
First, this study focused only on 3PLs in Taiwan. Future studies may expand the research
sample to other countries for comparison and to determine whether regional differences
affect the relationships between a 3PL’s integration, SCR and service performance.
Second, a quantitative method was used in this study. Future investigations can include
qualitative research to better understand the development of integration and SCR for a
3PL. Third, this study divided integration into internal integration, customer integration
and logistics collaborator integration based on the role of integration width. Future
research may consider the depth of integration and examine its influences on SCR and
service performance. Finally, service performance was utilized in this study as a reference
for evaluating firm performance. Future studies might consider other aspects of
performance (e.g. Chang and Lai, 2017; Shang et al., 2016), such as resource efficiency and
cost effectiveness. Doing so would enable the evaluation of the effects of different
integration capabilities and SCR on these other aspects of firm performance.

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 Appendix Third-party
logistics
Scale Previous studies providers
1. Integration capabilities Liu and Lai (2016),
In the B2B market, my company … ( from 1 “strongly disagree” to 7 “strongly agree”) Stank et al. (2001)
ii1. has highly standardized logistics operations
ii2. is dedicated to the simplification of logistics operations
21
ii3. has assigned personnel to effectively coordinate interdepartmental operations
ii4. effectively integrates departments to meet operational needs
ii5. uses a precise, timely, and consistent information system
ii6. adopts integrative transportation and warehouse planning system
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ii7. effectively integrates our logistics information with different program

applications
ci1. has comprehensive plans for future logistics services to meet shippers’ demands
ci2. communicates with shippers on issues related to new logistics services with the
goal of sharing increases in costs
ci3. can convince shippers to sign a long-term contract
ci4. effectively exchanges ideas with key shippers regularly
ci5. effectively integrates its logistics operations with the operations of shippers
ci6. properly integrates its information systems with those of crucial shippers
ci7. establishes a fast order system with key shippers
li1. cooperates with logistics collaborators on issues related to new logistics services
with the goal of sharing increases in costs
li2. logistics collaborators are willing to work with our company on a long-term basis
li3. effectively exchanges ideas with key logistics collaborators regularly
li4. effectively integrates its logistics operations with the operations of logistics
collaborators
li5. properly integrates its information systems with those of crucial logistics
collaborators

2. SCR Ambulkar et al. (2015)

When supply chains of various scales at my company are disrupted for any reason (e.g.
bad weather, disrupted/congested transportation network, equipment malfunction or
incompetent service of logistics collaborators, etc.), my company … ( from 1 “strongly
disagree” to 7 “strongly agree”)
r1. can cope with changes brought by the supply chain disruption
r2. can adapt to the supply chain disruption easily
r3. can provide a quick response to the supply chain disruption
r4. can maintain high situational awareness at all times
3. Service performance Wieland and
My company’s B2B performance relative to the industry average … ( from 1 “much Wallenburg (2013)
worse” to 7 “much better”)
p1. on-time delivery rate
p2. customer satisfaction Table AI.
p3. problem-solving capabilities for customers Measures used in
p4. low customer complaint rate the Likert scale

Corresponding author
Chiung-Lin Liu can be contacted at: [email protected]

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innovation. The International Journal of Logistics Management 29:1, 2-4. [Citation] [Full Text]
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