A Model to Enhance SMEs’ Strategic Outsourcing for the Supply Chain Industry in Malaysia

Strategic outsourcing is a common approach that is adopted by many organizations to achieve the business goals and adhere to the sustainable business strategy. Nevertheless, it is supported by several researches that organizations tend to outsource the supply chain management to a third-party logistics (3PL) vendor in order to lower the enterprise logistics risks, provides a leaner supply chain practice and reduces the operating costs. Malaysia is one of the leading countries that is growing rapidly in the supply chain industry and acting as a strategic hub for supply chain efficiency to provide better competitive advantages in the transport and logistics sector. There is a lack of comprehensive framework that review the existing 3PL models and how it affects the decision-making process. Therefore, this research aims to investigate the existing 3PL outsourcing models and develop an enhanced model to determine the 3PL critical success factors in Malaysian SMEs. Interviews are conducted with the 3PL vendors and end-user organizations to understand the latest trend in the 3PL applications and to test the relevancy of the initial proposed model. Interpretivism research philosophy is followed to ensure there is proper reasoning on the collected interview data. Overall, this paper will provide a clear understanding on the existing 3PL outsourcing models and how the proposed 3PL outsourcing model should be closely connected to the critical success factors.