Alignment, management controls and alliance portfolio management in third-party logistics supply chains

Over the last two decades, considerable growth in outsourcing of logistics services to thirdparties has been witnessed in both the public and private sectors. However, evidence from practice reveals problems in the management of these outsourced relationships, indicating insufficient attention to the achievement of alignment between supply chain (SC) partners and poor design and/or use of management control systems (MCS). Research to date has not addressed issues of how alignment in SC is pursued and the challenges faced. Also, further work is required on how MCS is used to mitigate control problems that arise in SC and the knowledge sharing effects of MCS choices. Finally, despite nascent literature on the importance of adopting an alliance portfolio strategy and approach to managing SC, there is little empirical work on how firms implement such strategies and approaches and the role of MCS in supporting these. -- This thesis explores (a) how alignment is pursued in SC and the effects of doing so (b) the role of MCS in managing control problems and the knowledge sharing performance effects of particular MCS choices and (c) the role of alliance portfolio management in the management of individual alliances and how this influences the use of MCS. It investigates these questions through a case study of a large multi-national organisation and its relationships with three third-party logistic services providers. -- The thesis finds that systems integration, processes, communications, reward and compensation programs, standardisation, and decision-making are critical structural characteristics for the attainment of strategic, structural and operational alignment of SC partners. It also provides evidence on how particular formal and informal controls are used to address control problems and enhance service performance and knowledge sharing. Furthermore, the research finds that the problem-oriented application of MCS results in their mobilisation in packages rather than individually in resolving one or several control problems concurrently. Finally the thesis indicates that alliance portfolio management provided the buyer firm the strategy to determine the right mix of competencies and capabilities needed in the appropriate configuration of selected service providers and shifted MCS to manage the alliances individually as well as collectively to promote knowledge exchange and collaboration across third-party logistic vendors.