Graduation thesis international business economics factors influencing choices of using third party logistics service providers of manufacturing companies in ho chi minh city

FOREIGN TRADE UNIVERSITY HO CHI MINH CITY CAMPUS -*** - GRADUATION THESIS Major: International Business Economics FACTORS INFLUENCING CHOICES OF USING THIRD-PARTY LOGISTICS SERVICE PROVIDERS OF MANUFACTURING COMPANIES IN HO CHI MINH CITY Author: Nguyễn Việt Hưng Student ID: 1501015192 Class: K54CLC3 Supervisor: Nguyễn Thị Thu Hà (Assoc Prof.) Ho Chi Minh City, May 2019 TABLE OF CONTENTS LIST OF ABBREVIATIONS LIST OF FIGURES LIST OF TABLES PREFACE CHAPTER 1: INTRODUCTION TO FACTORS INFLUENCING CHOICES OF USING THIRD-PARTY LOGISTICS SERVICE PROVIDERS OF MANUFACTURING COMPANIES IN HO CHI MINH 1.1 The necessity of the research 1.2 Literature review 1.2.1 International research 1.2.2 Domestic research 1.3 Research objectives 1.4 Subject and scopes of the research 1.5 Research methodology 1.6 New contribution of the research 1.7 Research structure 10 CHAPTER 2: THEORETICAL BASIS AND RESEARCH MODELS OF FACTORS INFLUENCING CHOICES OF USING THIRD-PARTY LOGISTICS SERVICE PROVIDERS OF MANUFACTURING COMPANIES IN HO CHI MINH CITY 11 2.1 Overview of third-party logistics service provider 11 2.1.1 Definition of third-party logistics 11 2.1.2 The role of third-party logistics in supply chain of manufacturing companies 12 2.1.3 Types of services offered by third-party logistics service provider 14 2.2 Theoretical basis for factors influencing choices of using third-party logistics services of manufacturing companies in Ho Chi Minh city 17 2.2.1 Transaction-cost economics by Oliver E Williamson (1979) 17 2.2.2 A model for strategic supplier selection by Joseph Sarkis and Srinivas Talluri (2002) 18 2.2.3 The five-stage model of third-party logistics buying process by Harry Sink and John Langley Jr (1997) 19 2.3 Previous empirical researches on factors influencing choices of using third-party logistics of manufacturing companies 22 2.3.1 Selection of Third-Party Logistics (3PL): A hybrid approach using interpretive structural modeling (ISM) and analytic network process (ANP) by Jitesh Thakkar and associates (2005) 22 2.3.2 A framework for evaluating third-party logistics by Ganesh Vaidyanathan (2005) 25 2.3.3 Applying analytic network process (ANP) in logistics service provider selection – a case study of the industry investing in Southeast Asia by Kai-Ying Chen and Wan-Ting Wu (2011) 29 2.3.4 3PL selection criteria in integrated circuit manufacturing industry in Taiwan by Bang-Ning Hwang, Tsai-Ti Chen, and James T Lin (2016) 2.3.5 Summary of factors in related empirical research 31 33 CHAPTER 3: RESEARCH MODELS ON FACTORS INFLUENCING CHOICES OF USING THIRD-PARTY LOGISTICS SERVICE PROVIDERS OF MANUFACTURING COMPANIES IN HO CHI MINH CITY 35 3.1 Research process 35 3.2 Preliminary research methodology 36 3.2.1 Proposed research model and research hypotheses 36 3.3 Official research methodology 40 3.3.1 Method of collecting information and determining sample size 40 3.3.2 Method of data analysis 41 3.4 Scale of measurement for each variable 44 3.4.1 The measurement scale for performance factor 44 3.4.2 The measurement scale for service factor 45 3.4.3 The measurement scale for cost factor 45 3.4.4 The measurement scale for quality assurance factor 45 3.4.5 The measurement scale for IT factor 46 3.4.6 The measurement scale for intangibles factor 46 3.4.7 The measurement scale for dependent variables 47 CHAPTER 4: RESEARCH OUTCOMES AND DISCUSSION ON FACTORS INFLUENCING CHOICES OF USING THIRD-PARTY LOGISTICS SERVICE PROVIDERS OF MANUFACTURING COMPANIES IN HO CHI MINH CITY 48 4.1 Research outcomes description 48 4.1.1 Official sample description 48 4.1.2 Cronbach’s Alpha coefficient of reliability analysis 50 4.1.3 Exploratory factor analysis 54 4.1.4 Adjusted model after factor analysis 56 4.1.5 Multiple linear regression analysis 56 4.1.6 Detecting violations of regression assumptions 60 4.1.7 Testing model hypotheses 62 4.1.8 ANOVA result analysis 63 4.2 Research outcomes discussion 64 4.2.1 Performance factor 64 4.2.2 Service factor 64 4.2.3 Cost factor 65 4.2.4 Quality assurance factor 65 4.2.5 IT factor 66 CHAPTER 5: RECOMMENDATIONS FOR THIRD PARY LOGISTICS SERVICE PROVIDERS OPERATING IN HO CHI MINH CITY 68 5.1 Potentials of the market for third-party logistics in Ho Chi Minh city 68 5.1.1 Opportunities 68 5.1.2 Challenges 69 5.2 Recommendations for third-party logistics operating in Ho Chi Minh City 71 5.2.1 Control cost and offer competitive price 71 5.2.2 Improve performance capability 74 5.2.3 Expand IT capability 76 5.3 Limitations of the research and directions for future research 78 CONCLUSION 80 LIST OF REFERENCES 81 APPENDIX 89 LIST OF ABBREVIATIONS Abbreviation Meaning 3PL Third-party logistics 4PL Fourth-party logistics 5PL Fifth-party logistics AHP Analytical Hierarchy Process ANP Analytical network process ANOVA Analysis of variance ASEAN Association of Southeast Asian Nations CAGR Compound annual growth rate CMR Customer relationship management DEMATEL Decision making trial and evaluation laboratory DTT Delivery turnaround time EBPS Electronic bill payment solution EDI Electronic data interchange EFA Exploratory factor analysis FAA Federal aviation administration FAHP Fuzzy analytical hierarchy process FDA Food and drug administration FTP File transfer protocol GDP Gross domestic products IC Integrated circuit ISM Interpretive structural modeling ISO International organization for standardization KMO Kaiser-Meyer-Olkin KPI Key performance indicator IT Information technology LPI Logistics performance index MNCs Multinational corporations SCM Supply chain management TEU Twenty-foot equivalent unit TOPSIS Technique for Order of Preference by Similarity to Ideal Solution USD United States dollar VND Vietnam dong VIF Variance inflation factor VPN Virtual private network XML Extensible markup language LIST OF FIGURES Figure 1.1: LPI overperformers and underperformers Figure 2.1: Relationship of 3PL provider in the supply chain of manufacturer 12 Figure 2.2: Summary of logistics activities in the supply chain 13 Figure 2.3: Detailed graphical representation for strategic supplier selection 18 Figure 2.4: The five stages of third-party logistics buying process 20 Figure 2.5: 3PL evaluation process 25 Figure 3.1: Research procedure 35 Figure 3.2: Proposed research model for the thesis 37 Figure 4.1: Scatterplot of standardized residuals 61 Figure 4.2: Histogram of residual frequency 61 123 Descriptive statistics for “Performance” variables 124 Descriptive statistics for “Service” variables 125 Descriptive statistics for “Cost” variables 126 Descriptive statistics for “Quality assurance” variables 127 Descriptive statistics for “IT” variables 128 Descriptive statistics for “Intangibles” variables 129 130 Appendix No Company ABB Vietnam An Binh Export - Import Manufacturing Trading Co., Ltd Address Ree Tower, floor 12 and 12B, 9, Doan Van Bo street, ward 12, district 4, HCM city No 663, Truong Chinh St., Tay Thanh Ward, Tan Phu Dist., HCM city An Thinh Materials No.20A, 24A Street, Binh Hung Hoa Ward, Company Limited Binh Tan District, HCM city Akzo Nobel Vietnam Alpha Co Ltd Amanotes AVC Hemera Co., Ltd Avery Dennison Vietnam B.A Boutique-Art Co., Ltd Blue Ocean Trading 10 9: List of respondents Import Export Co.,Ltd 11 Bosch Vietnam 12 CJ Vietnam 92 Nguyen Trong Tuyen, ward 15, Phu Nhuan, HCM city 184/1/23 Le Thuc Hoach , Tan Quy ward, Tan Phu district, HCM city 17-19-21 Nguyen Van Troi street, ward 12, Phu Nhuan district, HCM city 31 Dan Toc Street, Tan Thanh Ward, Tan Phu District, HCM city Lot 7-2, Road M7,Tan Industry Park, Binh Tan district, HCM city 97 Xuan Thuy, Thao Dien Ward, District 2, HCM city No 24 / 4B Nguyen Thi Thu St., Hamlet 5, Xuan Thoi Thuong Ward, Hoc Mon Dist, HCM city 20 Vo Van Tan, Ben Nghe, District 1, HCM city 2bis,4,6 Le Thanh Ton, Ben Nghe, district 1, HCM city 131 Cuu Long 13 Communications Design JSC 14 15 16 485 Ha Noi Highway, Linh Trung ward, Thu Vietnam Duc distric, HCM city Creative Porcelain 21 Cong Hoa, ward 4, Tan Binh district, HCM Vietnam JSC city Dai Can Phat Production 322/12B Minh Phung St., Ward 2, Dist 11, Trading Service Co., Ltd HCM city Dai The Gioi Co., Ltd 18 Dai Dong Tien Corp Dat Thanh Production Trading Services Construction Co., Ltd 20 Decathlon Vietnam 21 Dotea Co., Ltd 22 HCM city Coca-Cola Beverages 17 19 No 339/39, Le Van Sy St., Ward 13, Dist 3, 10 Lot C, street no 1, Phu Nhuan ward, district 7, HCM city 216, Tan Thanh., ward 15, district 5, HCM city 329 Duong Thi Muoi, Block 9, Tan Chanh Hiep Ward, District 12, HCM city Pearl Plaza, 561A Dien Bien Phu, ward 25, Binh Thanh, HCM city Floor 1, 158/14 Tran Huy Lieu, ward 15, Phu Nhuan district, HCM city Duc Loc Electric Wire and 17/15 Phan Van Hon, Tan Thoi Nhat Ward, Cable Company Limited Dist 12, HCM city Le Trong Tan, Tay Thanh ward, Tan Phu 23 Duc Phat Ice-cream 24 Duy My Co., Ltd 25 Duy Tan Plastics 98 Ho Hoc Lam, An Lac, Binh Tan, HCM city 26 Frieslandcampina Vietnam Hai Trieu, Ben Nghe, district 1, HCM city district, HCM city 91/1B, KP 6, Tan Thoi Nhat ward, district 12, HCM city 132 27 Gia Huy Import Export No 304/20, Tan Ky Tan Quy St., Tan Phu Co., Ltd Dist., HCM city 28 Givral JSC 29 Glandore System Vietnam 30 Globelink Vietnam 31 Golden Cow Co., Ltd Lot II-1B Le Trong Tan, KCN Tan Binh, Tan Phu district, HCM city TMA tower, Tan Chanh Hiep, district 12, HCM city 25th Floor, Pearl Plaza - 561A Dien Bien Phu Str., Binh Thanh Dist., HCM City Duong Ba Trac 79, Ward 1, District 8, HCM city Floor 18-19 Vietcombank tower, 05 Cong 32 Heineken Vietnam Truong Me Linh, Ben Nghe, district 1, HCM city Hiep Cuong Service 33 Trading Production Co., Ltd 34 35 36 HOME24H CO., Ltd 729 Do Xuan Hop St., Phu Huu Ward, District 9, HCM city 62/17K, Hamlet 3, Xuan Thoi Thuong Commune, Hoc Mon district, HCM city Hoang Bao Minh Trading 69 Dong Hung Thuan 19, Dong Hung Thuan Production Co.,Ltd Ward, Dist 12, HCM city Hoang Phuc Flooring 1149 Phan Van Tri, Ward 10, Go Vap district, Production., Jsc HCM city Hoang Phuc Thinh Import 37 Export Service Trading 28/328 Thong Nhat, Ward 15, Go Vap District, Investment One Member HCM city Co., Ltd 38 Hop Phat Manufacturing 132/12 Song Hanh, Square 5, Dong Hung Trading Co., Ltd Thuan Ward, District 12, HCM city 133 39 40 41 Huynh Kim Insulation and D13/19P Pham Van Sang, Binh Chanh district, Air Duct Co., Ltd HCM city Hoang Trung Tin Co., Ltd No 69/8/24 Tan Son, ward 12, Go Vap district, HCM city Hong Ky Machining Co., 38 Tay Lan St., Quarter 7, Binh Tri Dong A Ltd Ward, Binh Tan Dist., HCM city Lot A10 Tan Thoi Hiep Industrial Park, 42 Industrial Creation JSC Nguyen Anh Thu St., Hiep Thanh Ward, Dist 12, HCM city 43 44 45 46 Intel Vietnam High-tech area, Tan Phu, district 9, HCM city Japan Paper Technology U33b-35, Road 20, Tan Thuan EPZ, Tan (Vietnam) Co., Ltd Thuan Dong ward, district 7, HCM city Kim Dong Phat Inox Co., E11/14A Thoi Hoa St., Hamlet 5, Vinh Loc A Ltd Commune, Binh Chanh Dist., HCM city Kim Ta Co Kiem Huy Import - Export 47 Service Trade Manufacturing Co., Ltd 48 Lam Soon Vietnam Le Gia Commercial 49 Investment International Trading Co., Ltd 50 51 132/4 HT45 Road, Block 1, Hiep Thanh Ward, District 12, HCM city No 10 Quach Vu St., Hiep Tan ward, Tan Phu district, HCM city 45 Vo Thi Sau, district 1, HCM city 72/ 1B Phan Huy Ich, Ward 15, Tan Binh Dist., HCM city Long Cuong Industrial 364 Nguyen Thi Kieu St., Block 6, Hiep Co., Ltd Thanh Ward, Dist 12, HCM city L'Oreal Vietnam 72 Le Thanh Ton, Ben Nghe, district 1, HCM city 134 52 Lotus food JSC Manufacturing Company 53 Limited - Trading Services Advertising Pico Lot 29-31, Tan Tao, Tan Tao A, Binh Tan district, HCM city 759/10/9 Huong Lo 2, Binh Tri Dong A Ward, Binh Tan District, HCM city Manufacturing 54 Engineering and Trade in 349/5 Provincial Road 10, Block 6, An Lac A Services FUJITANKNK Ward, Binh Tan District, HCM city Co., Ltd 55 Mondelez Kinh Do 56 Moc Viet Co., Ltd 57 58 59 city 109/1164/A10 Le Duc Tho, ward 13, Go Vap district, HCM city Midan Garment Company 106/15B Lac Long Quan, Ward 3, Dist 11, Limited HCM city Minh Anh RSX Company 718/34A Hiep Binh Phuoc, Thu Duc, HCM Limited city Minh Hung Long Import 246/50 March 26th, Quarter 9, Binh Hung Hoa Export Co., Ltd Ward, Binh Tan Dist., HCM City, MIIN Export and Import 60 140 Hai Ba Trung, Da Kao, district 1, HCM One Member Company Limited 61 Nam Viet Fumigation JSC 62 Nestlé Vietnam 63 New Edge Co., Ltd 155 Ben Van Don, River Gate Building, Block A, Ward 6, District 4, HCM city 69 Nguyen Gia Tri, ward 25, Binh Thanh, HCM city 138-142 Hai Ba Trung, Da Kao, district 1, HCM city 63 Lo Lu, Truong Thanh Ward, District 9, HCM city 135 Ngoc Tin Trading 64 Construction Manufacturing Co., Ltd Number One Investment 65 Import Export Service Trading Co., Ltd 66 67 HCM City No 34, Road S7, Tay Thanh Ward, Tan Phu Services Co., Ltd Dist, HCM city 69 PT Nam Binh Co., Ltd 70 Saigon Palm Co., Ltd 71 Sai Gon Plastic Co., Ltd 72 Samsung 75 No 109 Tan Trang, Ward 9, Tan Binh Dist., Phuc Hao Trading & 68 74 Ward, Binh Tan District, HCM city Perfetti Van Melle Vietnam 72 Le Thanh Ton, District 1, HCM city Procter & Gamble Vietnam 73 No 23, Truong Phuoc Phan, Binh Tri Dong A 11 Floor, MPlaza, 39 Le Duan, district 1, HCM city Lane 80B, Hamlet 5, Dong Thanh, Hoc Mon, HCM city 432/22 Xo Viet Nghe Tinh, ward 25, Binh Thanh., HCM city B8/3 Vo Van Van, Bnh Chanh district, HCM city Bitexco Financial Tower, Hai Trieu, district 1, HCM city Phuc Son Viet 46 DS 48, KDC Nam Long, Phuoc Long B International Co., Ltd ward, district 9, HCM city Sen Ngoc International 8th Floor, Bitexco Building, 19-25 Nguyen Import Export Co., Ltd Hue St., District 1, HCM city Showa Rubber Vietnam 1st Floor, Room 1.3, No.3 Phan Van Dat, Ben Co., Ltd Nghe Ward, Dist 1, HCM city 76 Suntory Pepsi.co Vietnam 77 Tanaka Co., Ltd Bluesky Tower, 5f office 01, Bach Dang, ward 2, Tan Binh district, HCM city Square BI.03b-05, St 6, Tan Thuan Dong Ward, Dist 7, HCM city 136 Tan Phat Thanh Plastic 78 Co., Ltd No 879/20/10/98/1, Huong Lo 2, Block 8, Binh Tri Dong A Ward, Binh Tan District, HCM city Tan Hiep Hung Plastic 79 Service Trading Production 909 St 3/2, Ward 7, Dist 11, HCM city Co., Ltd 80 Thai Hoa Co., Ltd 81 Thoai Phat Thread 82 83 84 85 88 Binh Tan Dist., HCM city Trading., JSC HCM city Thavimex Global Trading C8/15, Nu Dan Cong, Hamlet 3A, Vinh Loc A Co., Ltd Commune, Binh Chanh Dist., HCM city Thanh Cong Paper Pipe 410/26 Le Van Quoi, Binh Hung Hoa A Ward, Co Binh Tan District, HCM city Thien An Gadgets Co., 67/51/17A, 38 street, Hiep Binh Chanh ward, Ltd Thu Duc district, HCM city Trading Production Co., 29/ 8C Thoi Tay Hamlet 1, Tan Hiep Ward, Hoc Mon Dist., HCM city TNK Advertising Trading 14/51B Nguyen Thien Thuat St., Ward 24, Manufacturing Co., Ltd Binh Thanh Dist., HCM city Tri Viet Machine 781, QL13, KP3, P Hiep Binh Phuoc, Q Thu Technology JSC Duc, HCM city Trung Tin Production 89 No 11, Truyen Thong Beer St., Tan Tao Ward, 38 Road B, Phu Thanh ward, Tan Phu district, Ltd 87 HCM city Toan Phat International Thuy Duong Packaging 86 343/5C To Hien Thanh St., Ward 12, Dist 10, Trading & Import - Export Co., Ltd No 177/3, Hamlet 6, TCH 36 Street, Tan Chanh Hiep Ward, District 12, HCM city 137 Truong Vinh Import 90 Export Service Trading Production Co Ltd 91 Tuan Hien Co., Ltd 92 Unilever Vietnam 93 Vilaconic Group 94 Vina Plastic Mousse JSC 95 Vi Nam Viet., Jsc A5/II - A6/II, Str 2B, Vinh Loc Industrial Park, Binh Tan District, HCM city 92 Truong Dang Que, ward 3, Go Vap district, HCM city 156 Nguyen Luong Bang, Tan Phu, district 7, HCM city G1-02.09, Galaxy Building, No Nguyen Khoai St., ward 1, district HCM city 95/16, Tan Binh ward, Di An, HCM city 397 An Duong Vuong St., Ward 10, Dist 6, HCM city Vietnam Boiler Joint Stock B13-B/1 Road 2A, Vinh Loc Industrial Zone, 96 97 98 99 100 Company - Southern Binh Hung Hoa B Ward, Binh Tan District, Branch HCM city Vinh Thinh Paper Co., Ltd District 4, HCM city Vinh Tan Private 87 Tran Thien Chanh St., Ward 12, Dist 10, Enterprise HCM city Wipro Unza Vietnam Unit 506, Floor 5, Saigon Trade Center, 37 Ton Duc Thang, District 1, HCM city Yellow Eyes Printing 127/37 Ba Van Street, Ward 14, Tan Binh Disign Co., Ltd District, HCM city ZALATEX Joint Stock 101 Van Do Building, 348 Ben Van Don Street, Company 46th Floor, Bitexco Financial Tower, No.2, Hai Trieu St., Ben Nghe ward, district 1, HCM city