Re‐engineering global supply chains: Alliances between manufacturing firms and global logistics services providers

During the 1990s, globalization and time‐based competition have emerged as important business strategies leading to renewed emphasis on the logistics function. This has opened up opportunities for strategic alliances between manufacturing firms and specialized logistics services providers, with each partner focusing on its core area of competence. Although such alliances are common in North America and Europe, the determinants of success of such partnerships in the global context are not well researched and understood. Moreover this concept is relatively new in Asia. This paper presents an overview of the issues that impact the success of a strategic partnership between manufacturing firms and global logistics services providers (GLSPs). A case study featuring Motorola’s Semiconductor Products Sector and United Parcel Service (UPS) is described, for bringing out the important tradeoffs in such an alliance.