Logistics outsourcing by Taiwanese and Dutch food processing industries

Abstract

Purpose

This paper aims to investigate outsourcing of different types of logistics activities in Taiwanese food industry, and benchmark with practices in The Netherlands.

Design/methodology/approach

The outsourcing of four levels of logistics activities is investigated: transportation (level 1), packaging (level 2), transportation management (level 3), and distribution network management (level 4). A structured questionnaire was designed and sent to logistics managers in The Netherlands and Taiwan to evaluate the most commonly outsourced activities and identify specific outsourcing firm's characteristics.

Findings

About 69 per cent of the companies, in both countries outsource level 1 activities, 16 per cent level 2, and 37 per cent level 3 activities. Only few companies (about 10 per cent) outsource the highest level of activities. In particular, The Netherlands has higher percentages for levels 1 and 3. This might be caused by the fact that most Taiwanese companies emphasise low cost whereas the Dutch companies focus on flexibility in order to deal with higher complexities. When intentions for the future are included, Taiwan is planning to outsource level 2 (40 per cent) and level 4 activities (36 per cent) much more than The Netherlands (respectively 13 and 17 per cent). When zooming in, it was found that outsourcing strategies of companies in the subsectors differ. For instance, the dairy sector outsources more frequently than the meat sector on the first three levels. This might be caused by the fact that meat companies emphasise food quality, whereas dairy companies emphasise flexibility and reliability.

Research limitations/implications

This study investigated only food processors. The paper suggests further research should include other types of food organisations.

Originality/value

The paper provides valuable insights in outsourcing strategies of food processing companies in Taiwan and The Netherlands for advanced logistics service providers who are looking at the market potential of Taiwan.

Citation

Hsiao, H., Kemp, R.G.M., van der Vorst, J.G.A.J. and Omta, S.W.F.(O). (2011), "Logistics outsourcing by Taiwanese and Dutch food processing industries", British Food Journal, Vol. 113 No. 4, pp. 550-576. https://doi.org/10.1108/00070701111124014