Erik Hofmann

In times of crisis, cash and liquidity play an essential role. This paper analyzes the working capital measures over the course of a business cycle. We examine (1) how companies behave in economic downturns regarding their working capital components and (2) whether firms with higher financial constraints behave differently in economic downturns regarding their working capital components. The analyses were conducted with descriptive statistics and generalized linear mixed-effects modeling. Our dataset consists of 2111 stock-listed firms and 10,555 observations spread over the period of five years during the financial crisis era. The findings indicate that days sales outstanding and shorter days inventory held are related to better financial performance while days payable outstanding had no observable effect. Furthermore, financially constrained firms have shorter days sales outstanding than average firms. In economic downturns, firms seem to reduce both working capital and fixed investments to asset ratios. The financially constrained firms pushed down their fixed investments ratio more aggressively than average firms while, in contrast, the financially strongest firms pushed down the working capital to asset ratio in comparison to average firms. Interestingly, neither the cash conversion cycle, days payable outstanding, nor company performance or fixed investments to asset ratios fully returned to the pre-shock level. The behavior of non-financially constrained firms, which also perform better, indicates a stronger supply chain orientation than that of average firms. This might indicate that the supply chain-oriented view of working capital management could provide a more favorable and resilient alternative to the prevailing self-orientation. Keywords: supply chain financing; financial constraints; economic downturn; trade credit; insolvency risk; generalized linear mixed-effects model

Shippers and logistics service providers (LSPs) implement information communication technology (ICT) in outsourced logistics to increase efficiency and remedy information asymmetry. However, the nature of outsourced logistics operations can create technology management challenges due to the organizational distances between the technology initiator and the technology users. Here, we apply the lens of positivist agency theory (PAT) to study four cases of technology management and agency in multi-tier outsourced logistics services. Our findings suggest that while ICT remedies some information asymmetry, it also creates new information asymmetry—and gives rise to user privacy concerns. Furthermore, the setting of multi-tier subcontracted logistics services appears to be a critical factor in designing governance mechanisms for effective technology management (e.g., performance-based contracts, rotating staff). In addition to our theoretical contributions to technology management in multi-tier outsourcing, we offer an empirical account of agency, proposals for future research, and practical suggestions to help managers tackle agency issues that arise from information asymmetry. KEYWORDS: agency theory, information asymmetry, information and communication technology, logistics service providers, subcontracting, service triads, case study research

The COVID-19 crisis has interrupted firms and their value networks. The lockdown measures taken by governments around the globe have triggered a massive supply and demand shock. The ensuing crisis has created economic chaos that resulted in massive business disruptions for companies, their customers, their suppliers and their affiliated service providers (banks and logistics providers). Firms are turning to supply chain financing solutions to stabilize liquidity and their net working capital to maintain solvency and ensure continuity of supply through their supply chains. This paper discloses several different types of supply chain financing solutions and how these can impact firms and their value creation partners struggling through the uncertain business environment caused by a global pandemic.

This paper provides a systematic literature review and a future research agenda on the topic of purchasing of business services (BuSe). BuSe purchasing has increasingly gained in importance during the past years. It has established itself as a relevant sub-discipline in purchasing and supply management. This “state of research” paper identifies the main authors, relevant topics and practical implications as well as upcoming developments. For this purpose, 118 publications were collected and analyzed. While early research on BuSe purchasing was strongly influenced by the American marketing literature, more recent papers are also published by European authors and institutions coming from the core of the purchasing and supply management discipline. In general, the literature lacks in theoretical foundation and longitudinal methods while assuming high generalizability. Based on the analyses and additional discussions within the research team, directions for future research are identified at a political, economic, social and technological (PEST) level. The following trends for service purchasing were elaborated: (i) «Glocalisation» and near-shoring, (2) sustainability and corporate social responsibility (CSR), (iii) internal and external collaboration, (iv) value-driven contract and payment systems, (v) hybrid products and servitization, and (vi) big data analytics, artificial intelligence and process automation.

Studies have shown that leading supply chain companies are associated with significantly higher company financial ratios than competitors. In contrast, little research has focused on the financial performance of the affiliated suppliers and customers of such supply chain leader (SCL) companies. Thus, the central purpose of this paper is to determine, from a financial perspective, whether suppliers and customers benefit or lose by participating in a SCL network (so called “financial spillover effects”). Companies that were ranked in the Gartner Supply Chain Top 25 were selected as SCLs. For each selected firm, the five largest suppliers and customers were identified and compared with a control sample from the same industry. In order to elaborate on existing insights into the (financial) outcome of supply chain relationships, we applied an explorative approach with abductive reasoning, while comparing the secondary data for 224 SCL supplier (56 firms) and 168 SCL customer (42 firms) firm-years with 1940 (485 firms) and 1544 (386 firms) control firm-years, respectively. The following insights are made: First, the superior financial performance of SCLs was confirmed. Second, the financial performance of suppliers and customers showed superior liquidity and activity ratios but inferior profitability ratios. Third, suppliers showed much more significant results than customers.

With the emergence of distributed ledger technology (DLT), numerous practitioners and researchers have proclaimed its beneficial impact on supply chain transactions in the future. However, the vast majority of DLT initiatives are discontinued after a short period. With the full potential of DLT laying far down the road, especially managers in supply chain management (SCM) seek for short-term cost-saving effects of DLT in order to achieve long-term benefits of DLT in the future. However, the extant research has bypassed grounding long-term as well as short-term effects of DLT on supply chain transaction with empirical data. We address this shortcoming, following an abductive research approach and combining empirical data from a multiple case study design with the corresponding literature. Our study reveals that the effects of DLT on supply chain transactions are two-sided. We found six effects of DLT solutions that have a cost-reducing or cost avoidance impact on supply chain transactions. In addition, we found two effects that change the power distribution between buyers and suppliers in transactions and a single effect that reduces the dependency of supply chain transactions on third parties. While cost-reducing and avoidance as well as dependency-reducing effects are positive effects, the change in power distribution might come with disadvantages. With these findings, the paper provides the first empirical evidence of the impact of DLT on supply chain transactions, which will enable managers to improve their assessment of DLT usage in supply chains.

Purpose – The purpose of this paper is to examine the impacts of the ongoing freight market deregulation in the European Union (EU). Specifically, this case study focuses on cabotage penetration rates in Germany, the largest logistics market in Europe. In light of the upcoming trade barriers, we intend to move this topic forward by emphasising its interdisciplinary nature. Design/methodology/approach – Based on the analysis of Eurostat data, expert interviews and a review of related literature, we elaborate and discuss four propositions related to the factors affecting cabotage penetration, future cabotage levels and the effects on modal split and empty runs. Findings – We found that cabotage in Germany plays a more important role than officially reported and has increased drastically since 2008. Given our analysis, increased cabotage penetration seems to thwart efforts within the EU to promote a modal shift from road to rail and increased national empty runs are the future outcome of current regulations. In Germany, the cabotage share is likely to reach 16% in the next five years. Research limitations/implications – This paper highlights the need for incorporating a more contextual understanding in freight carrier selection theory development in general as well as country-specific investigations in particular. Practical implications – Logistics managers and policymakers looking at future strategies are advised to take the ongoing deregulation trend into consideration. European freight movement using cabotage operators may represent significant cost savings; however, these cost savings come at an environmental and social sustainability price as the modal shift to rail and fill rates suffer. Originality/value – This paper represents an empirical and unbiased point of view, in contrast to the reports of the European Commission (pro-deregulation) or the reports of the haulage associations and labour unions (anti-deregulation). Keywords Cabotage, European freight market deregulation, Flagging out, Freight transport sustainability

Logistics service providers (LSPs) can add value to their clients by providing financial value-added services (FVAS). However, LSPs might encounter challenges when offering such FVAS, as the latter demand a different set of competencies that affect sales teams’ qualifications and motivation. Against this background, we explore how LSPs’ sales teams can be incentivised to support service portfolio extensions in the form of FVAS. The research methodology applied in this study follows a qualitative approach and includes 34 expert interviews. We find that most LSPs address incentive problems by adjusting sales teams’ qualifications. Expert support, training and tools are common methods to incentivise sales teams that lack specific expertise. For stimulating motivation, awareness creation through data or personal engagement and monetary incentives are most relevant. LSPs can use the insights from this paper to identify the impact of portfolio extensions on the motivation and qualification of their sales personnel and implement adequate incentive systems.

The aim of this research was to identify quality discrepancies in the existing service offerings of logistics service providers (LSPs). A multi-sided model of service quality (SERVQUAL) highlighting existing gaps in service provision was developed. A qualitative case study approach was employed, and the data were analyzed via a pattern-matching technique. The contribution to the literature is twofold. First, the study transferred the original service quality model developed in the 1980s from a business-to-consumer context to a business-to-business context that is specific to LSPs. Second, the results provide a means of closing the identified service quality gaps arising in an LSP context.