Taxonomies of trust in supply chain risk management in the South African third party logistics industry

Abstract

ORIENTATION : Many organisations find it difficult to implement supply chain risk management (SCRM) processes successfully without the existence of trust in buyer-supplier relationships. RESEARCH PURPOSE : The purpose of this study was to explore the taxonomies of trust in SCRM in a buyer-supplier relationship within the South African third party logistics (3PL) industry. MOTIVATION FOR THE STUDY : The advantages and disadvantages of trust in buyer-supplier relationships have been researched extensively. However, within the context of South Africa, there is a dearth of research on the main components of trust in buyer-supplier relationships when implementing SCRM processes. RESEARCH DESIGN, APPROACH AND METHOD : A generic qualitative research method was used to gather data. A total of 21 purposively selected senior managers were interviewed from buyer and supplier organisations in South Africa with headquarters located in Gauteng province participated in semi-structured interviews. Within this sample, 10 buyer and 10 supplier organisations were interviewed. MAIN FINDINGS : The findings of this study indicate that value similarity improves SCRM processes by relationship building, transparency, information sharing and similar supply chain objectives. Past performance improves SCRM processes by increasing the business knowledge of supply chain partners, confidence in ability and goal congruity. Risk perceptions improve SCRM processes by supply chain partner alignment and similar intentions. Social trust improves SCRM processes by increasing the responsiveness, agility and communication of supply chain partners PRACTICAL/MANAGERIAL IMPLICATIONS : This study provides practitioners in the 3PL industry with insights into the role of having trust in their buyer-supplier relationships, as trust acts as a catalyst and enabler when implementing effective SCRM processes. CONTRIBUTION/VALUE-ADD : The theoretical contribution of this study is the use and adoption of the Trust Confidence and Cooperation Model by Earle, Siegrist and Gutscher (2010), to create a taxonomy of trust within a SCRM and South African 3PL context.